File No. 33-
CIK #896317
Securities and Exchange Commission
Washington, D.C. 20549-1004
Form S-6
For Registration under the Securities Act of 1933 of Securities of Unit
Investment Trusts Registered on Form N-8B-2.
A. Exact name of Trust: Insured Municipals Income Trust,
182nd Insured Multi-Series
B. Name of Depositor: Van Kampen American Capital
Distributors,Inc.
C. Complete address of One Parkview Plaza
Depositor's principal Oakbrook Terrace, Illinois 60181
executive offices:
D. Name and complete address of agents for service:
Chapman and Cutler Van Kampen American Capital
Distributors, Inc.
Attention: Mark J. Kneedy Attention: Don G. Powell, Chairman
111 West Monroe Street One Parkview Plaza
Chicago, Illinois 60603 Oakbrook Terrace, Illinois 60181
E. Title and amount of securities being registered: 1,000* Units
F. Proposed maximum offering price to the public of the securities
being registered: ($1020 per Unit**): $1,020,000
G. Amount of filing fee, computed at one twenty-nineth of 1 percent of
the proposed maximum aggregate offering price to the public: $351.72
H. Approximate date of proposed sale to the public:
As soon as practicable after the effective date of the Registration
Statement
_________________________________________________________________________
* 500 Units registered for primary distribution.
500 Units registered for resale by Depositor of Units previously
sold in primary distribution.
** Estimated solely for the purpose of calculating the registration
fee.
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the
Registration Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a) may determine.
Insured Municipals Income Trust,
182nd Insured Multi-Series
Cross Reference Sheet
Pursuant to Rule 404(c) of Regulation C
under the Securities Act of 1933
(Form N-8B-2 Items Required by Instruction
1 as to Prospectus on Form S-6)
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
I. Organization and General Information
1. (a) Name of trust) )
(b) Title of securities issued ) Prospectus Front Cover Page
2. Name and address of Depositor ) Introduction
) Summary of Essential Financial
) Information
) Trust Administration
3. Name and address of Trustee ) Introduction
) Summary of Essential Financial
) Information
) Trust Administration
4. Name and address of principal ) Underwriting
underwriter )
5. Organization of trust ) Introduction
6. Execution and termination of ) Introduction
Trust Indenture and Agreement ) Trust Administration
7. Changes of Name ) *
8. Fiscal year ) *
9. Material Litigation ) *
II. General Description of the Trust and Securities of the Trust
10. General information regarding ) Introduction
trust's securities and rights ) Unitholder Explanations
of security holders ) Trust Information
) Trust Administration
11. Type of securities comprising ) Introduction
units ) Trust Information
) Trust Portfolios
12. Certain information regarding ) *
periodic payment certificates )
13. (a) Load, fees, charges and expenses ) Introduction
) Summary of Essential Financial
) Information
) Unitholder Explanations
Trust Information
Trust Administration
(b) Certain information regarding )
periodic payment plan ) *
certificates )
(c) Certain percentages ) Introduction
) Summary of Essential Financial
) Information
) Unitholder Explanations
(d) Certain other fees, expenses or ) Unitholder Explanations
charges payable by holders ) Trust Administration
(e) Certain profits to be received ) Unitholder Explanations
by depositor, principal ) Underwriting
underwriter, trustee or ) Notes to Portfolios
affiliated persons )
(f) Ratio of annual charges to income) *
)
14. Issuance of trust's securities ) Unitholder Explanations
15. Receipt and handling of payments ) *
from purchasers )
16. Acquisition and disposition of ) Introduction
underlying securities ) Unitholder Explanations
) Trust Administration
17. Withdrawal or redemption ) Unitholder Explanations
) Trust Administration
18. (a) Receipt and disposition ) Introduction
of income ) Unitholder Explanations
(b) Reinvestment of distributions ) *
(c) Reserves or special funds ) Unitholder Explanations
) Trust Administration
(d) Schedule of distributions ) *
19. Records, accounts and reports ) Unitholder Explanations
Trust Administration )
20. Certain miscellaneous provisions ) Trust Administration
of Trust Agreement )
21. Loans to security holders ) *
22. Limitations on liability ) Trust Portfolios
) Trust Administration
23. Bonding arrangements ) *
24. Other material provisions of ) *
trust indenture or agreement )
III. Organization, Personnel and Affiliated Persons of Depositor
25. Organization of Depositor ) Trust Administration
26. Fees received by Depositor ) Trust Administration
27. Business of Depositor ) Trust Administration
28. Certain information as to )
officials and affiliated ) *
persons of Depositor )
29. Companies owning securities of ) *
Depositor )
30. Controlling persons of Depositor ) *
31. Compensation of Directors ) *
32. Compensation of Directors ) *
33. Compensation of Employees ) *
34. Compensation to other persons ) Unitholder Explanations
IV. Distribution and Redemption of Securities
35. Distribution of trust's securities Introduction
by states Settlement of Bonds in the Trusts
36. Suspension of sales of trust's ) *
securities )
37. Revocation of authority to distribute ) *
38. (a) Method of distribution )
(b) Underwriting agreements ) Unitholder Explanations
(c) Selling agreements )
39. (a) Organization of principal )
underwriter )
) Trust Administration
(b) N.A.S.D. membership by )
principal underwriter )
40. Certain fees received by ) *
principal underwriter )
41. (a) Business of principal underwriter) Trust Administration
)
(b) Branch offices of principal ) *
underwriter )
(c) Salesmen of principal underwriter) *
)
42. Ownership of securities of the trust ) *
)
43. Certain brokerage commissions ) *
received by principal underwriter )
44. (a) Method of valuation ) Introduction
) Summary of Essential Financial
) Information
) Unitholder Explanations
) Trust Administration
(b) Schedule as to offering price ) *
(c) Variation in offering price ) Unitholder Explanations
to certain persons )
45. Suspension of redemption rights ) *
46. (a) Redemption valuation ) Unitholder Explanations
) Trust Administration
(b) Schedule as to redemption price ) *
)
47. Purchase and sale of interests ) Unitholder Explanations
in underlying securities ) Trust Administration
V. Information Concerning the Trustee or Custodian
48. Organization and regulation of trustee) Trust Administration
)
49. Fees and expenses of trustee ) Summary of Essential Financial
) Information
) Trust Administration
50. Trustee's lien ) Trust Administration
VI. Information Concerning Insurance of Holders of Securities
51. Insurance of holders of trust's )
securities ) *
VII. Policy of Registrant
52. (a) Provisions of trust agreement ) Trust Administration
with respect to replacement or )
elimination of portfolio securities)
(b) Transactions involving elimination)
of underlying securities ) *
(c) Policy regarding substitution or ) Trust Administration
elimination of underlying securities)
(d) Fundamental policy not ) *
otherwise covered )
53. Tax Status of trust ) Trust Information
) Other Matters
VIII. Financial and Statistical Information
54. Trust's securities during last ten years ) *
55. )
56. Certain information regarding ) *
57. periodic payment certificates )
58. )
59. Financial statements (Instructions ) Other Matters
1(c) to Form S-6) )
_________________________________
* Inapplicable, omitted, answer negative or not required
Preliminary Prospectus Dated July 21, 1995
Insured Municipals Income Trust
1,000 Units 182nd Insured Multi-Series
(A Unit Investment Trust)
The attached final Prospectus for a prior Series of the Fund is
hereby used as a preliminary Prospectus for the above stated Series. The
narrative information and structure of the attached final Prospectus will
be substantially the same as that of the final Prospectus for this
Series. Information with respect to pricing, the number of Units, dates
and summary information regarding the characteristics of securities to be
deposited in this Series is not now available and will be different since
each Series has a unique Portfolio. Accordingly the information
contained herein with regard to the previous Series should be considered
as being included for informational purposes only. Ratings of the
securities in this Series are expected to be comparable to those of the
securities deposited in the previous Series. However, the Estimated
Current Return for this Series will depend on the interest rates and
offering prices of the securities in this Series and may vary materially
from that of the previous Series.
A registration statement relating to the units of this Series will
be filed with the Securities and Exchange Commission but has not yet
become effective. Information contained herein is subject to completion
or amendment. Such Units may not be sold nor may offer to buy be
accepted prior to the time the registration statement becomes effective.
This Prospectus shall not constitute an offer to sell or the solicitation
of an offer to buy nor shall there be any sale of the Units in any state
in which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
state.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any State.
Preliminary Prospectus Dated July 20, 1995
Subject To Completion
July 20, 1995
Van Kampen American Capital
Insured Municipals Income Trust, 181st Insured Multi-Series
IM-IT 353 Missouri IM-IT 91 Tennessee IM-IT 32
Colorado IM-IT 75 New Mexico IM-IT 18
In the opinion of counsel, interest to the Fund and to Unitholders, with
certain exceptions, is excludable under existing law from gross income for
Federal income taxes. In addition, the interest income of each State Trust is,
in the opinion of counsel, exempt to the extent indicated from state and local
taxes, when held by residents of the state where the issuers of Bonds in such
Trust are located. Capital gains, if any, are subject to Federal tax.
The Fund. The objectives of the Fund are Federal and, in the case of a State
Trust, state tax-exempt income and conservation of capital through an
investment in a diversified portfolio of tax-exempt bonds. The Fund consists
of five underlying separate unit investment trusts designated as Insured
Municipals Income Trust, Series 353 (the "IM-IT"), Colorado Insured Municipals
Income Trust, Series 75 (the "Colorado IM-IT Trust"), Missouri Insured
Municipals Income Trust, Series 91 (the "Missouri IM-IT Trust"), New Mexico
Insured Municipals Income Trust, Series 18 (the "New Mexico IM-IT Trust") and
Tennessee Insured Municipals Income Trust, Series 32 (the "Tennessee IM-IT
Trust"). The various trusts are collectively referred to herein as the
"Trusts". The Colorado IM-IT, Missouri IM-IT, New Mexico IM-IT and Tennessee
IM-IT Trusts are sometimes collectively referred to herein as the "State
Trusts", while the IM-IT, Colorado IM-IT, Missouri IM-IT, New Mexico IM-IT and
Tennessee IM-IT Trusts are sometimes collectively referred to herein as the
"Insured Trusts". Each Trust initially consists of delivery statements
relating to contracts to purchase securities and, thereafter, will consist of
such securities as may continue to be held (the "Bonds"or "Securities"). Such
Securities are interest-bearing obligations issued by or on behalf of
municipalities and other governmental authorities, the interest on which is,
in the opinion of recognized bond counsel to the issuing governmental
authority, exempt from all Federal income taxes under the existing law. In
addition, the interest income of each State Trust is, in the opinion of
counsel, exempt to the extent indicated from state and local taxes, when held
by residents of the state where the issuers of Bonds in such Trust are located.
"AAA" Rating for the Insured Trusts. Insurance guaranteeing the payments of
principal and interest, when due, on the Securities in the portfolio of each
Insured Trust has been obtained from a municipal bond insurance company either
by such Trust or by the issuer of the Bonds involved, by a prior owner of the
Bonds or by the Sponsor prior to the deposit of such Bonds in an Insured
Trust. See "Unitholder Explanations--Insurance on the Bonds in the Insured
Trusts"on page 23. Insurance obtained by an Insured Trust applies only while
Bonds are retained in such Trust while insurance obtained on Preinsured Bonds
is effective so long as such Bonds are outstanding. The Trustee, upon the sale
of a Bond insured under an insurance policy obtained by an Insured Trust, has
a right to obtain from the insurer involved permanent insurance for such Bond
upon the payment of a single predetermined insurance premium and any expenses
related thereto from the proceeds of the sale of such Bond. Insurance relates
only to the Bonds in a Trust and not to the Units offered hereby or to the
market value thereof. As a result of such insurance, the Units of each Insured
Trust have received a rating of "AAA"by Standard & Poor's, A Division of the
McGraw-Hill Companies ("Standard & Poor's"). Standard & Poor's has indicated
that this rating is not a recommendation to buy, hold or sell Units nor does
it take into account the extent to which expenses of each Insured Trust or
sales by each Insured Trust of Bonds for less than the purchase price paid by
such Trust will reduce payments to Unitholders of the interest and principal
required to be paid on such Bonds. See "Unitholder Explanations--Insurance on
the Bonds in the Insured Trusts". No representation is made as to any
insurer's ability to meet its commitments.
Public Offering Price. The Public Offering Price of the Units of each Trust
during the initial offering period is equal to the aggregate offering price of
the Securities in such Trust's portfolio and cash, if any, in the Principal
Account held or owned by such Trust Fund plus the applicable sales charge plus
accrued interest, if any. After the initial public offering period, the
secondary market Public Offering Price of each Trust will be equal to the
aggregate bid price of the Securities in such Trust and cash, if any, in the
Principal Account held or owned by such Trust Fund plus the applicable sales
charge plus accrued interest, if any. Sales charges for the Trusts in the
initial market, expressed both as a percentage of the Public Offering Price
and as a percentage of the aggregate offering price of the Securities, are set
forth in footnote (2) under "Summary of Essential Financial Information". For
sales charges in the secondary market, see "Unitholder Explanations--Public
Offering". If the Securities in each Trust were available for direct purchase
by investors, the purchase price of the Securities would not include the sales
charge included in the Public Offering Price of the Units. During the initial
offering period, the sales charge is reduced on a graduated scale for sales
involving at least 100 Units. If Units were available for purchase at the
close of business on the day before the Date of Deposit (except for the IM-IT
as of 8:00 A.M. Central Time on the Date of Deposit), the Public Offering
Price per Unit would have been that amount set forth in the "Summary of
Essential Financial Information"for each Trust. See "Unitholder
Explanations--Public Offering".
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
Estimated Current Return and Estimated Long-Term Return. The annual Estimated
Current Returns and Estimated Long-Term Returns to Unitholders as of the close
of business on the day before the Date of Deposit (except for the IM-IT as of
8:00 A.M. Central Time on the Date of Deposit) under the monthly and
semi-annual distribution plans were as set forth under "Per Unit
Information"for each Trust. The methods of calculating Estimated Current
Return and Estimated Long-Term Return are set forth in the footnotes to the
"Per Unit Information"for each Trust.
Objectives of The Fund. The objectives of the Fund are income exempt from
Federal income tax and, in the case of a State Trust, Federal and state income
tax (if any) and conservation of capital through an investment in diversified
portfolios of Federal and state tax-exempt obligations. There is, of course,
no guarantee that the Fund will achieve its objectives. The Fund may be an
appropriate investment vehicle for investors who desire to participate in a
portfolio of tax-exempt fixed income securities with greater diversification
than they might be able to acquire individually. In addition, securities of
the type deposited in the Fund are often not available in small amounts. Units
of the Trust are not deposits or obligations of, or guaranteed or endorsed by,
any bank and are not federally insured or otherwise protected by the Federal
Deposit Insurance Corporation, the Federal Reserve Board or any other agency
and involve investment risk, including the possible loss of principal.
Distribution Options. Purchasers of Units who desire to receive distributions
on a monthly or semi-annual basis may elect to do so at the time of settlement
during the initial public offering period. See "Unitholder
Explanations--Settlement of Bonds in the Trusts--Change of Distribution
Option". The plan of distribution selected by such purchasers will remain in
effect until changed. Those indicating no choice will be deemed to have chosen
the monthly distribution plan. Record dates for monthly distributions will be
the first day of each month and record dates for semi-annual distributions
will be the first day of the months indicated under "Per Unit Information"for
the applicable Trust. Distributions will be made on the fifteenth day of the
month subsequent to the respective record dates.
Market for Units. Although not obligated to do so, the Sponsor, Van Kampen
American Capital Distributors, Inc., intends to, and certain of the other
Underwriters may, maintain a secondary market for the Units at prices based
upon the aggregate bid prices of the Securities in the respective Trusts plus
interest accrued to the date of settlement; however, during the initial
offering period such prices will be based upon the aggregate offering prices
of the Securities plus interest accrued to the date of settlement. If such a
market is not maintained and no other over-the-counter market is available, a
Unitholder will be able to dispose of his Units only through redemption at
prices based upon the bid prices of the underlying Securities plus interest
accrued to the date of settlement (see "Unitholder Explanations--Public
Offering--Redemption of Units"and "Unitholder Explanations--Public
Offering--Market for Units").
Reinvestment Option. Unitholders have the opportunity to have their
distributions reinvested into an open-end, management investment company as
described herein. See "Unitholder Explanations--Public Offering--Reinvestment
Option".
Risk Factors. An investment in the Trusts should be made with an understanding
of the risks associated therewith, including, among other factors, the
inability of the issuer or an insurer to pay the principal of or interest on a
bond when due, volatile interest rates, early call provisions, and changes to
the tax status of the Bonds. See "Unitholder Explanations--Settlement of Bonds
in the Trusts--Risk Factors".
<TABLE>
INSURED MUNICIPALS INCOME TRUST
181st Insured Multi-Series
Summary of Essential Financial Information
At the Close of Business on the day before the Date of Deposit: July 19, 1995
(except for the IM-IT as of 8:00 A.M. Central Time
on the Date of Deposit: July 20, 1995)
Sponsor: Van Kampen American Capital Distributors, Inc.
Evaluator: American Portfolio Evaluation Services
(A division of a subsidiary of the Sponsor)
Trustee: The Bank of New York
<CAPTION>
Colorado Missouri
GENERAL INFORMATION IM-IT IM-IT Trust IM-IT Trust
<S> <C> <C> <C>
Principal Amount (Par Value) of Securities in Trust <F1>............................... $ 9,075,000 $ 3,000,000 $ 3,900,000
Number of Units........................................................................ 9,030 3,025 3,997
Fractional Undivided Interest in the Trust per Unit ................................... 1/9,030 1/3,025 1/3,997
Principal Amount (Par Value) of Securities per Unit <F2>............................... $ 1,004.98 $ 991.74 $ 975.73
Public Offering Price: ................................................................
Aggregate Offering Price of Securities in Portfolio................................... $ 8,587,573 $ 2,876,787 $ 3,801,165
Aggregate Offering Price of Securities per Unit....................................... $ 951.00 $ 951.00 $ 951.00
Sales Charge <F3>..................................................................... $ 49.00 $ 49.00 $ 49.00
Public Offering Price per Unit <F4>................................................... $ 1,000.00 $ 1,000.00 $ 1,000.00
Redemption Price per Unit <F4>......................................................... $ 943.47 $ 943.43 $ 943.52
Secondary Market Repurchase Price per Unit <F4>........................................ $ 951.00 $ 951.00 $ 951.00
Excess of Public Offering Price per Unit Over Redemption Price per Unit................ $ 56.53 $ 56.57 $ 56.48
Excess of Sponsor's Initial Repurchase Price per Unit Over Redemption Price per Unit... $ 7.53 $ 7.57 $ 7.48
Minimum Value of the Trust under which Trust Agreement may be terminated............... $ 1,815,000 $ 600,000 $ 780,000
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Minimum Principal Distribution........... $1.00 per Unit
First Settlement Date.................... July 25, 1995
Evaluator's Annual Supervisory Fee....... Maximum of $0.25 per Unit
Evaluator's Annual Evaluation Fee <F5>.... $0.30 per $1,000 principal amount of Bonds
Evaluations for purpose of sale, purchase or redemption of Units are made as
of 4:00 P.M. Eastern time on days of trading on the New York Stock Exchange
next following receipt of an order for a sale or purchase of Units or receipt
by The Bank of New York of Units tendered for redemption.
<FN>
<F1>Because certain of the Securities in certain Trusts may from time to time
under certain circumstances be sold or redeemed or will be called or mature in
accordance with their terms (including the call or sale of zero coupon bonds
at prices less than par value), there is no guarantee that the value of each
Unit at the respective Trusts' termination will be equal to the Principal
Amount (Par Value) of Securities per Unit stated above.
<F2>Many unit investment trusts comprised of municipal securities issue a number
of units such that each unit represents approximately $1,000 principal amount
of underlying securities. The Sponsor, on the other hand, in determining the
number of Units for each Trust, other than IM-IT Limited Maturity, IM-IT
Intermediate and IM-IT Short Intermediate Trusts, has elected not to follow
this format but rather to provide that number of Units which will establish as
close as possible as of the Date of Deposit a Public Offering Price per Unit
of $1,000. For IM-IT Limited Maturity, IM-IT Intermediate and IM-IT Short
Intermediate Trusts, on the other hand, each unit represents $1,000 principal
amount of underlying securities in such Trust on the Date of Deposit.
<F3>Sales charges for the Trusts, expressed as a percentage of the Public Offering
Price per Unit and in parenthesis as a percentage of the aggregate offering
price of the Securities, are as follows: an IM-IT or a State Trust- 4.9%
(5.152%); an IM-IT Limited Maturity Trust - 4.3% (4.493%); an IM-IT
Intermediate Trust - 3.9% (4.058%); an IM-IT Short Intermediate Trust- 3.0%
(3.093%).
<F4>Anyone ordering Units for settlement after the First Settlement Date will pay
accrued interest from such date to the date of settlement (normally three
business days after order) less distributions from the Interest Account
subsequent to the First Settlement Date. For purchases settling on the First
Settlement Date, no accrued interest will be added to the Public Offering
Price. After the initial offering period, the Sponsor's Repurchase Price per
Unit will be determined as described under the caption "Public
Offering--Market for Units."
<F5>Such fee is based on the outstanding principal amount of Securities in each
Trust on the Date of Deposit for the first year and as of the close of
business on January 1 for each year thereafter.
</TABLE>
<TABLE>
INSURED MUNICIPALS INCOME TRUST
181st Insured Multi-Series
Summary of Essential Financial Information (continued)
At the Close of Business on the day before the Date of Deposit: July 19, 1995
(except for the IM-IT as of 8:00 A.M. Central Time
on the Date of Deposit: July 20, 1995)
Sponsor: Van Kampen American Capital Distributors, Inc.
Evaluator: American Portfolio Evaluation Services
(A division of a subsidiary of the Sponsor)
Trustee: The Bank of New York
<CAPTION>
New Mexico Tennessee
GENERAL INFORMATION IM-IT Trust IM-IT Trust
<S> <C> <C>
Principal Amount (Par Value) of Securities in Trust <F1>............................... $ 2,995,000 $ 2,950,000
Number of Units........................................................................ 3,072 3,013
Fractional Undivided Interest in the Trust per Unit.................................... 1/3,072 1/3,013
Principal Amount (Par Value) of Securities per Unit <F2>............................... $ 974.93 $ 979.09
Public Offering Price: ................................................................
Aggregate Offering Price of Securities in Portfolio................................... $ 2,921,484 $ 2,865,376
Aggregate Offering Price of Securities per Unit....................................... $ 951.00 $ 951.00
Sales Charge <F3>..................................................................... $ 49.00 $ 49.00
Public Offering Price per Unit <F4>................................................... $ 1,000.00 $ 1,000.00
Redemption Price per Unit <F4>......................................................... $ 943.59 $ 943.66
Secondary Market Repurchase Price per Unit <F4>........................................ $ 951.00 $ 951.00
Excess of Public Offering Price per Unit Over Redemption Price per Unit................ $ 56.41 $ 56.34
Excess of Sponsor's Initial Repurchase Price per Unit Over Redemption Price per Unit... $ 7.41 $ 7.34
Minimum Value of the Trust under which Trust Agreement may be terminated............... $ 599,000 $ 590,000
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Minimum Principal Distribution......... ..$1.00 per Unit
First Settlement Date.................... July 25, 1995
Evaluator's Annual Supervisory Fee....... Maximum of $0.25 per Unit
Evaluator's Annual Evaluation Fee <F5>... $0.30 per $1,000 principal amount of Bonds
Evaluations for purpose of sale, purchase or redemption of Units are made as
of 4:00 P.M. Eastern time on days of trading on the New York Stock Exchange
next following receipt of an order for a sale or purchase of Units or receipt
by The Bank of New York of Units tendered for redemption.
<FN>
<F1>Because certain of the Securities in certain Trusts may from time to time
under certain circumstances be sold or redeemed or will be called or mature in
accordance with their terms (including the call or sale of zero coupon bonds
at prices less than par value), there is no guarantee that the value of each
Unit at the respective Trusts' termination will be equal to the Principal
Amount (Par Value) of Securities per Unit stated above.
<F2>Many unit investment trusts comprised of municipal securities issue a number
of units such that each unit represents approximately $1,000 principal amount
of underlying securities. The Sponsor, on the other hand, in determining the
number of Units for each Trust, other than IM-IT Limited Maturity, IM-IT
Intermediate and IM-IT Short Intermediate Trusts, has elected not to follow
this format but rather to provide that number of Units which will establish as
close as possible as of the Date of Deposit a Public Offering Price per Unit
of $1,000. For IM-IT Limited Maturity, IM-IT Intermediate and IM-IT Short
Intermediate Trusts, on the other hand, each unit represents $1,000 principal
amount of underlying securities in such Trust on the Date of Deposit.
<F3>Sales charges for the Trusts, expressed as a percentage of the Public Offering
Price per Unit and in parenthesis as a percentage of the aggregate offering
price of the Securities, are as follows: an IM-IT or a State Trust- 4.9%
(5.152%); an IM-IT Limited Maturity Trust - 4.3% (4.493%); an IM-IT
Intermediate Trust - 3.9% (4.058%); an IM-IT Short Intermediate Trust- 3.0%
(3.093%).
<F4>Anyone ordering Units for settlement after the First Settlement Date will pay
accrued interest from such date to the date of settlement (normally three
business days after order) less distributions from the Interest Account
subsequent to the First Settlement Date. For purchases settling on the First
Settlement Date, no accrued interest will be added to the Public Offering
Price. After the initial offering period, the Sponsor's Repurchase Price per
Unit will be determined as described under the caption "Public
Offering--Market for Units."
<F5>Such fee is based on the outstanding principal amount of Securities in each
Trust on the Date of Deposit for the first year and as of the close of
business on January 1 for each year thereafter.
</TABLE>
SETTLEMENT OF BONDS IN THE TRUSTS
The Fund. Insured Municipals Income Trust, 181st Insured Multi-Series (the
"Fund"), was created under the laws of the State of New York pursuant to a
Trust Indenture and Agreement (the "Trust Agreement"), dated the Date of
Deposit, among Van Kampen American Capital Distributors, Inc., as Sponsor,
American Portfolio Evaluation Services, a division of Van Kampen American
Capital Investment Advisory Corp., as Evaluator, and The Bank of New York, as
Trustee.
The Fund consists of five separate portfolios of delivery statements relating
to contracts to purchase interest-bearing obligations issued by or on behalf
of states and territories of the United States, and political subdivisions and
authorities thereof, the interest on which is, in the opinion of recognized
bond counsel to the issuing authorities, excludable from gross income for
Federal income tax under existing law. All issuers of Securities in a State
Trust are located in the State for which such Trust is named or in United
States territories or possessions and their public authorities; consequently,
in the opinion of recognized bond counsel to such State issuers, the related
interest earned on such Securities is exempt to the extent indicated from
state and local taxes of such State. With the exception of the New York and
Pennsylvania Trusts, Units of such Trusts may be purchased only by residents
of the State for which such Trust is named. Units of a New York Trust may be
purchased by residents of New York, Connecticut, Florida and Massachusetts.
Units of a Pennsylvania Trust may be purchased by residents of Pennsylvania,
Connecticut, Florida, Maryland, New York, Ohio and West Virginia. Offerees in
the States of Illinois, Indiana, Virginia and Washington may purchase Units of
the IM-IT Trust only. On the Date of Deposit, the Sponsor deposited with the
Trustee the aggregate principal amount of Securities in each Trust as
indicated under "General Information--Principal Amount (Par Value) of
Securities in Trust"in the "Summary of Essential Financial Information". Such
Securities consist of delivery statements relating to contracts for the
purchase of certain interest-bearing obligations and cash, cash equivalents
and/or irrevocable letters of credit issued by a financial institution in the
amount required for such purchases. Thereafter, the Trustee, in exchange for
the Securities so deposited, delivered to the Sponsor the certificates
evidencing the ownership of the number of Units in each Trust as indicated
under "Summary of Essential Financial Information."Unless otherwise terminated
as provided herein, the Trust Agreement for any IM-IT or State Trust will
terminate at the end of the calendar year prior to the fiftieth anniversary of
its execution, and the Trust Agreement for any IM-IT Limited Maturity Trust,
IM-IT Intermediate Trust or IM-IT Short Intermediate Trust will terminate at
the end of the calendar year prior to the twentieth anniversary of its
execution.
The portfolio of any IM-IT or State Trust consists of Bonds maturing
approximately 15 to 40 years from the Date of Deposit. The approximate range
of maturities from the Date of Deposit for Bonds in any IM-IT Limited Maturity
Trust, IM-IT Intermediate Trust and IM-IT Short Intermediate Trust is 12 to 15
years, 5 to 15 years and 3 to 7 years, respectively. The dollar-weighted
average maturity of the Bonds in any IM-IT Intermediate Trust and IM-IT Short
Intermediate Trust is less than or equal to 10 years and 5 years, respectively.
The portfolios of the Trusts may consist of bonds that were acquired at a
market discount from par value at maturity. The coupon interest rates on the
discount bonds at the time they were purchased and deposited in such Trust
were lower than the current market interest rates for newly issued bonds of
comparable rating and type. If such interest rates for newly issued comparable
bonds increase, the market discount of previously issued bonds will become
greater, and if such interest rates for newly issued comparable bonds decline,
the market discount of previously issued bonds will be reduced, other things
being equal. Investors should also note that the value of bonds purchased at a
market discount will increase in value faster than bonds purchased at a market
premium if interest rates decrease. Conversely, if interest rates increase,
the value of bonds purchased at a market discount will decrease faster than
bonds purchased at a market premium. In addition, if interest rates rise, the
prepayment risk of higher yielding, premium bonds and the prepayment benefit
for lower yielding, discount bonds will be reduced. A bond purchased at a
market discount and held to maturity will have a larger portion of its total
return in the form of taxable income and capital gain and less in the form of
tax-exempt interest income than a comparable bond newly issued at current
market rates. See "Other Matters--Federal Tax Status."Market discount
attributable to interest changes does not indicate a lack of market confidence
in the issue. Neither the Sponsor nor the Trustee shall be liable in any way
for any default, failure or defect in any of the Bonds.
Certain of the Bonds in certain of the Trusts may be "zero coupon"bonds. See
footnote (6) in "Notes to Portfolios". Zero coupon bonds are purchased at a
deep discount because the buyer receives only the right to receive a final
payment at the maturity of the bond and does not receive any periodic interest
payments. The effect of owning deep discount bonds which do not make current
interest payments (such as the zero coupon bonds) is that a fixed yield is
earned not only on the original investment but also, in effect, on all
discount earned during the life of such obligation. This implicit reinvestment
of earnings at the same rate eliminates the risk of being unable to reinvest
the income on such obligation at a rate as high as the implicit yield on the
discount obligation, but at the same time eliminates the holder's ability to
reinvest at higher rates in the future. For this reason, zero coupon bonds are
subject to substantially greater price fluctuations during periods of changing
market interest rates than are securities of comparable quality which pay
interest.
Certain of the Bonds in certain of the Trusts may have been purchased on a
"when, as and if issued" or "delayed delivery" basis. See footnote (5) in
"Notes to Portfolios". The delivery of any such Securities may be delayed or
may not occur. Interest on these Securities begins accruing to the benefit of
Unitholders on their respective dates of delivery. To the extent any
Securities are actually delivered to the Fund after their respective expected
dates of delivery, Unitholders who purchase their Units prior to the date such
Securities are actually delivered to the Trustee would be required to adjust
their tax basis in their Units for a portion of the interest accruing on such
Securities during the interval between their purchase of Units and the actual
delivery of such Securities. As a result of any such adjustment, the Estimated
Current Returns during the first year would be slightly lower than those
stated herein which would be the returns after the first year, assuming the
portfolio of a Trust and estimated annual expenses other than that of the
Trustee (which may be reduced in the first year only) do not vary from that
set forth under "Per Unit Information"for the applicable Trust. Holders of the
Units will be "at risk"with respect to all Securities in the portfolios
including "when, as and if issued"and "delayed delivery"Securities (i.e., may
derive either gain or loss from fluctuations in the evaluation of such
Securities) from the date they commit for Units. For a discussion of the
Sponsor's obligations in the event of the failure of any contract for the
purchase of any of the Securities and limited right to substitute other
tax-exempt bonds to replace any failed contract, see "Replacement Bonds"
below.
Each Unit initially offered represents the fractional undivided interest in
the principal and net income of a Trust indicated under "Summary of Essential
Financial Information". To the extent that any Units are redeemed by the
Trustee, the fractional undivided interest in a Trust represented by each
unredeemed Unit will increase, although the actual interest in such Trust
represented by such fraction will remain unchanged. Units will remain
outstanding until redeemed upon tender to the Trustee by Unitholders, which
may include the Sponsor or the Underwriters, or until the termination of the
Trust Agreement.
Objectives and Securities Selection. The objectives of the Fund are income
exempt from Federal income taxation and, in the case of a State Trust, Federal
and state income taxation and conservation of capital through an investment in
diversified portfolios of Federal and state tax-exempt obligations. There is,
of course, no guarantee that the Trusts will achieve their respective
objectives. The Fund may be an appropriate investment vehicle for investors
who desire to participate in a portfolio of tax-exempt fixed income securities
with greater diversification than they might be able to acquire individually.
In addition, securities of the type deposited in the Fund are often not
available in small amounts.
Insurance guaranteeing the timely payment, when due, of all principal and
interest on the Bonds in each Insured Trust has been obtained by such Trust
from either AMBAC Indemnity Corporation ("AMBAC Indemnity"), Financial
Guaranty Insurance Company ("Financial Guaranty"or "FGIC") or a combination
thereof (collectively, the "Portfolio Insurers"), or by the issuer of such
Bonds, by a prior owner of such Bonds, or by the Sponsor prior to the deposit
of such Bonds in such Trust from (1) AMBAC Indemnity or one of its
subsidiaries, American Municipal Bond Assurance Corporation ("AMBAC") or MGIC
Indemnity Corporation ("MGIC Indemnity"), (2) Financial Guaranty, (3) MBIA
Insurance Corporation ("MBIA"), (4) Bond Investors Guaranty Insurance Company
("BIG"), (5) National Union Fire Insurance Company of Pittsburgh, PA.
("National Union"), (6) Capital Guaranty Insurance Company ("Capital
Guaranty"), (7) Capital Markets Assurance Corporation ("CapMAC") and/or (8)
Financial Security Assurance Inc. ("Financial Security"or "FSA")
(collectively, the "Preinsured Bond Insurers") (see "Unitholder
Explanations--Insurance on the Bonds in the Insured Trusts"). Insurance
obtained by an Insured Trust is effective only while the Bonds thus insured
are held in such Trust. The Trustee has the right to acquire permanent
insurance from a Portfolio Insurer with respect to each Bond insured by the
respective Portfolio Insurer under a Trust portfolio insurance policy.
Insurance relating to Bonds insured by the issuer, by a prior owner of such
Bonds or by the Sponsor is effective so long as such Bonds are outstanding.
Bonds insured under a policy of insurance obtained by the issuer, by a prior
owner of such Bonds or by the Sponsor from one of the Preinsured Bond Insurers
(the "Preinsured Bonds") are not additionally insured by an Insured Trust. No
representation is made as to any insurer's ability to meet its commitments.
Neither the Public Offering Price nor any evaluation of Units for purposes of
repurchases or redemptions reflects any element of value for the insurance
obtained by an Insured Trust, if any, unless Bonds are in default in payment
of principal or interest or in significant risk of such default. See
"Unitholder Explanations--Public Offering--Offering Price". On the other hand,
the value, if any, of Preinsured Bond insurance is reflected and included in
the market value of such Bonds.
In order for bonds to be eligible for insurance, they must have credit
characteristics which would qualify them for at least the Standard & Poor's
rating of "BBB-"or at least the Moody's Investors Service, Inc. rating of
"Baa", which in brief represent the lowest ratings for securities of
investment grade (see "Other Matters--Description of Securities Ratings").
Insurance is not a substitute for the basic credit of an issuer, but
supplements the existing credit and provides additional security therefor. If
an issue is accepted for insurance, a non-cancellable policy for the prompt
payment of interest and principal on the bonds, when due, is issued by the
insurer. Any premium or premiums relating to Preinsured Bond insurance is paid
by the issuer, by a prior owner of such Bonds or by the Sponsor and a monthly
premium is paid by an Insured Trust for the portfolio insurance, if any,
obtained by such Trust. The Trustee has the right to obtain permanent
insurance from a Portfolio Insurer in connection with the sale of a Bond
insured under the insurance policy obtained from the respective Portfolio
Insurer by an Insured Trust upon the payment of a single predetermined
insurance premium from the proceeds of the sale of such Bond. Accordingly, any
Bond in an Insured Trust is eligible to be sold on an insured basis. All Bonds
insured by the Portfolio Insurers and the Preinsured Bond Insurers receive a
"AAA" rating by Standard & Poor's. See "Unitholder Explanations--Insurance on
the Bonds in the Insured Trusts".
In selecting Securities for the Trusts the following facts, among others, were
considered by the Sponsor: (a) either the Standard & Poor's rating of the
Securities was in no case less than "BBB-"in the case of the Insured Trusts,
or the Moody's Investors Service, Inc. rating of the Securities was in no case
less than "Baa"in the case of the Insured Trusts, including provisional or
conditional ratings, respectively, or, if not rated, the Securities had, in
the opinion of the Sponsor, credit characteristics sufficiently similar to the
credit characteristics of interest-bearing tax-exempt obligations that were so
rated as to be acceptable for acquisition by the Fund (see "Other
Matters--Description of Securities Ratings"), (b) the prices of the Securities
relative to other bonds of comparable quality and maturity, (c) the
diversification of Securities as to purpose of issue and location of issuer
and (d) with respect to the Insured Trusts, the availability and cost of
insurance for the prompt payment of principal and interest, when due, on the
Securities. Subsequent to the Date of Deposit, a Security may cease to be
rated or its rating may be reduced below the minimum required as of the Date
of Deposit. Neither event requires elimination of such Security from the
portfolio of a Trust but may be considered in the Sponsor's determination as
to whether or not to direct the Trustee to dispose of the Security (see "Trust
Administration--Fund Administration and Expenses--Portfolio Administration").
To the best knowledge of the Sponsor, there is no litigation pending as of the
Date of Deposit in respect of any Securities which might reasonably be
expected to have a material adverse effect upon the Fund or any of the Trusts.
At any time after the Date of Deposit, litigation may be initiated on a
variety of grounds with respect to Securities in the Fund. Such litigation,
as, for example, suits challenging the issuance of pollution control revenue
bonds under environmental protection statutes, may affect the validity of such
Securities or the tax-free nature of the interest thereon. While the outcome
of litigation of such nature can never be entirely predicted, the Fund has
received or will receive opinions of bond counsel to the issuing authorities
of each Security on the date of issuance to the effect that such Securities
have been validly issued and that the interest thereon is exempt from Federal
income tax. In addition, other factors may arise from time to time which
potentially may impair the ability of issuers to meet obligations undertaken
with respect to the Securities.
Risk Factors. Certain of the Bonds in certain of the Trusts may be general
obligations of a governmental entity that are backed by the taxing power of
such entity. In view of this an investment in such a Trust should be made with
an understanding of the characteristics of such issuers and the risks which
such an investment may entail. All other Bonds in the Trusts are revenue bonds
payable from the income of a specific project or authority and are not
supported by the issuer's power to levy taxes. General obligation bonds are
secured by the issuer's pledge of its faith, credit and taxing power for the
payment of principal and interest. Revenue bonds, on the other hand, are
payable only from the revenues derived from a particular facility or class of
facilities or, in some cases, from the proceeds of a special excise tax or
other specific revenue source. There are, of course, variations in the
security of the different Bonds in the Fund, both within a particular
classification and between classifications, depending on numerous factors. See
"General"for each Trust.
Certain of the Bonds in certain of the Trusts may be obligations which derive
their payments from mortgage loans. Certain of such housing bonds may be FHA
insured or may be single family mortgage revenue bonds issued for the purpose
of acquiring from originating financial institutions notes secured by
mortgages on residences located within the issuer's boundaries and owned by
persons of low or moderate income. In view of this an investment in such a
Trust should be made with an understanding of the characteristics of such
issuers and the risks which such an investment may entail. Mortgage loans are
generally partially or completely prepaid prior to their final maturities as a
result of events such as sale of the mortgaged premises, default, condemnation
or casualty loss. Because these bonds are subject to extraordinary mandatory
redemption in whole or in part from such prepayments of mortgage loans, a
substantial portion of such bonds will probably be redeemed prior to their
scheduled maturities or even prior to their ordinary call dates. Extraordinary
mandatory redemption without premium could also result from the failure of the
originating financial institutions to make mortgage loans in sufficient
amounts within a specified time period. Additionally, unusually high rates of
default on the underlying mortgage loans may reduce revenues available for the
payment of principal of or interest on such mortgage revenue bonds. These
bonds were issued under Section 103A of the Internal Revenue Code, which
Section contains certain requirements relating to the use of the proceeds of
such bonds in order for the interest on such bonds to retain its tax-exempt
status. In each case the issuer of the bonds has covenanted to comply with
applicable requirements and bond counsel to such issuer has issued an opinion
that the interest on the bonds is exempt from Federal income tax under
existing laws and regulations. Certain issuers of housing bonds have
considered various ways to redeem bonds they have issued prior to the stated
first redemption dates for such bonds. In connection with the housing bonds
held by the Fund, the Sponsor at the Date of Deposit is not aware that any of
the respective issuers of such Bonds are actively considering the redemption
of such Bonds prior to their respective stated initial call dates. See
"General"for each Trust.
Certain of the Bonds in certain of the Trusts may be health care revenue
bonds. In view of this an investment in such a Trust should be made with an
understanding of the characteristics of such issuers and the risks which such
an investment may entail. Ratings of bonds issued for health care facilities
are often based on feasibility studies that contain projections of occupancy
levels, revenues and expenses. A facility's gross receipts and net income
available for debt service may be affected by future events and conditions
including, among other things, demand for services and the ability of the
facility to provide the services required, physicians' confidence in the
facility, management capabilities, competition with other health care
facilities, efforts by insurers and governmental agencies to limit rates,
legislation establishing state rate-setting agencies, expenses, the cost and
possible unavailability of malpractice insurance, the funding of Medicare,
Medicaid and other similar third party payor programs, government regulation
and the termination or restriction of governmental financial assistance,
including that associated with Medicare, Medicaid and other similar third
party payor programs. Pursuant to recent Federal legislation, Medicare
reimbursements are currently calculated on a prospective basis utilizing a
single nationwide schedule of rates. Prior to such legislation Medicare
reimbursements were based on the actual costs incurred by the health facility.
The current legislation may adversely affect reimbursements to hospitals and
other facilities for services provided under the Medicare program. Such
adverse changes also may adversely affect the ratings of Securities held in
the portfolios of the Fund; however, because of the insurance obtained by each
of the Insured Trusts, the "AAA"rating of the Units of each of the Insured
Trusts would not be affected. See "General"for each Trust.
Certain of the Bonds in certain of the Trusts may be obligations of public
utility issuers, including those selling wholesale and retail electric power
and gas. In view of this an investment in such a Trust should be made with an
understanding of the characteristics of such issuers and the risks which such
an investment may entail. General problems of such issuers would include the
difficulty in financing large construction programs in an inflationary period,
the limitations on operations and increased costs and delays attributable to
environmental considerations, the difficulty of the capital market in
absorbing utility debt, the difficulty in obtaining fuel at reasonable prices
and the effect of energy conservation. All of such issuers have been
experiencing certain of these problems in varying degrees. In addition,
Federal, state and municipal governmental authorities may from time to time
review existing, and impose additional, regulations governing the licensing,
construction and operation of nuclear power plants, which may adversely affect
the ability of the issuers of certain of the Bonds in the portfolio to make
payments of principal and/or interest on such Bonds. See "General"for each
Trust.
Certain of the Bonds in certain of the Trusts may be obligations of issuers
whose revenues are derived from the sale of water and/or sewerage services. In
view of this an investment in such a Trust should be made with an
understanding of the characteristics of such issuers and the risks which such
an investment may entail. Such Bonds are generally payable from user fees. The
problems of such issuers include the ability to obtain timely and adequate
rate increases, population decline resulting in decreased user fees, the
difficulty of financing large construction programs, the limitations on
operations and increased costs and delays attributable to environmental
considerations, the increasing difficulty of obtaining or discovering new
supplies of fresh water, the effect of conservation programs and the impact of
"no-growth"zoning ordinances. All of such issuers have been experiencing
certain of these problems in varying degrees. See "General"for each Trust.
Certain of the Bonds in certain of the Trusts may be industrial revenue bonds
("IRBs"). In view of this an investment in such a Trust should be made with an
understanding of the characteristics of such issuers and the risks which such
an investment may entail. IRBs have generally been issued under bond
resolutions pursuant to which the revenues and receipts payable under the
arrangements with the operator of a particular project have been assigned and
pledged to purchasers. In some cases, a mortgage on the underlying project may
have been granted as security for the IRBs. Regardless of the structure,
payment of IRBs is solely dependent upon the creditworthiness of the corporate
operator of the project or corporate guarantor. Corporate operators or
guarantors may be affected by many factors which may have an adverse impact on
the credit quality of the particular company or industry. These include
cyclicality of revenues and earnings, regulatory and environmental
restrictions, litigation resulting from accidents or environmentally-caused
illnesses, extensive competition and financial deterioration resulting from a
corporate restructuring pursuant to a leveraged buy-out, takeover or
otherwise. Such a restructuring may result in the operator of a project
becoming highly leveraged which may impact on such operator's creditworthiness
which in turn would have an adverse impact on the rating and/or market value
of such Bonds. Further, the possibility of such a restructuring may have an
adverse impact on the market for and consequently the value of such Bonds,
even though no actual takeover or other action is ever contemplated or
effected. See "General"for each Trust.
Certain of the Bonds in certain of the Trusts may be obligations that are
secured by lease payments of a governmental entity (hereinafter called "lease
obligations"). Lease obligations are often in the form of certificates of
participation. In view of this an investment in such a Trust should be made
with an understanding of the characteristics of such issuers and the risks
which such an investment may entail. Although the lease obligations do not
constitute general obligations of the municipality for which the
municipality's taxing power is pledged, a lease obligation is ordinarily
backed by the municipality's covenant to appropriate for and make the payments
due under the lease obligation. However, certain lease obligations contain
"non-appropriation"clauses which provide that the municipality has no
obligation to make lease payments in future years unless money is appropriated
for such purpose on a yearly basis. A governmental entity that enters into
such a lease agreement cannot obligate future governments to appropriate for
and make lease payments but covenants to take such action as is necessary to
include any lease payments due in its budgets and to make the appropriations
therefor. A governmental entity's failure to appropriate for and to make
payments under its lease obligation could result in insufficient funds
available for payment of the obligations secured thereby. Although
"non-appropriation"lease obligations are secured by the leased property,
disposition of the property in the event of foreclosure might prove difficult.
See "General"for each Trust.
Certain of the Bonds in certain of the Trusts may be obligations of issuers
which are, or which govern the operation of, schools, colleges and
universities and whose revenues are derived mainly from ad valorem taxes or
for higher education systems, from tuition, dormitory revenues, grants and
endowments. In view of this an investment in such a Trust should be made with
an understanding of the characteristics of such issuers and the risks which
such an investment may entail. General problems relating to school bonds
include litigation contesting the State constitutionality of financing public
education in part from ad valorem taxes, thereby creating a disparity in
educational funds available to schools in wealthy areas and schools in poor
areas. Litigation or legislation on this issue may affect the sources of funds
available for the payment of school bonds in the Trusts. General problems
relating to college and university obligations include the prospect of a
declining percentage of the population consisting of "college"age individuals,
possible inability to raise tuitions and fees sufficiently to cover increased
operating costs, the uncertainty of continued receipt of Federal grants and
state funding, and government legislation or regulations which may adversely
affect the revenues or costs of such issuers. All of such issuers have been
experiencing certain of these problems in varying degrees. See "General"for
each Trust.
Certain of the Bonds in certain of the Trusts may be obligations which are
payable from and secured by revenues derived from the ownership and operation
of facilities such as airports, bridges, turnpikes, port authorities,
convention centers and arenas. In view of this an investment in such a Trust
should be made with an understanding of the characteristics of such issuers
and the risks which such an investment may entail. The major portion of an
airport's gross operating income is generally derived from fees received from
signatory airlines pursuant to use agreements which consist of annual payments
for leases, occupancy of certain terminal space and service fees. Airport
operating income may therefore be affected by the ability of the airlines to
meet their obligations under the use agreements. The air transport industry is
experiencing significant variations in earnings and traffic, due to increased
competition, excess capacity, increased costs, deregulation, traffic
constraints and other factors, and several airlines are experiencing severe
financial difficulties. The Sponsor cannot predict what effect these industry
conditions may have on airport revenues which are dependent for payment on the
financial condition of the airlines and their usage of the particular airport
facility. Similarly, payment on Bonds related to other facilities is dependent
on revenues from the projects, such as user fees from ports, tolls on
turnpikes and bridges and rents from buildings. Therefore, payment may be
adversely affected by reduction in revenues due to such factors as increased
cost of maintenance, decreased use of a facility, lower cost of alternative
modes of transportation, scarcity of fuel and reduction or loss of rents. See
"General" for each Trust.
Certain of the Bonds in certain of the Trusts may be obligations which are
payable from and secured by revenues derived from the operation of resource
recovery facilities. In view of this an investment in such a Trust should be
made with an understanding of the characteristics of such issuers and the
risks which such an investment may entail. Resource recovery facilities are
designed to process solid waste, generate steam and convert steam to
electricity. Resource recovery bonds may be subject to extraordinary optional
redemption at par upon the occurrence of certain circumstances, including but
not limited to: destruction or condemnation of a project; contracts relating
to a project becoming void, unenforceable or impossible to perform; changes in
the economic availability of raw materials, operating supplies or facilities
necessary for the operation of a project or technological or other unavoidable
changes adversely affecting the operation of a project; administrative or
judicial actions which render contracts relating to the projects void,
unenforceable or impossible to perform; or impose unreasonable burdens or
excessive liabilities. The Sponsor cannot predict the causes or likelihood of
the redemption of resource recovery bonds in such a Trust prior to the stated
maturity of the Bonds. See "General"for each Trust.
Replacement Bonds. Because certain of the Securities in the Fund may from time
to time under certain circumstances be sold or redeemed or will mature in
accordance with their terms and because the proceeds from such events will be
distributed to Unitholders and will not be reinvested, no assurance can be
given that any Trust will retain for any length of time its present size and
composition. Neither the Sponsor nor the Trustee shall be liable in any way
for any default, failure or defect in any Security. In the event of a failure
to deliver any Security that has been purchased for the Fund under a contract,
including those Securities purchased on a "when, as and if issued"basis
("Failed Bonds"), the Sponsor is authorized under the Trust Agreement to
direct the Trustee to acquire other bonds ("Replacement Bonds") to make up the
original corpus of the Fund.
The Replacement Bonds must be purchased within 20 days after delivery of the
notice of the failed contract and the purchase price (exclusive of accrued
interest) may not exceed the amount of funds reserved for the purchase of the
Failed Bonds. The Replacement Bonds (i) must be tax-exempt bonds issued by
states or territories of the United States or political subdivisions thereof
and, in the case of replacement of bonds in a State Trust, shall have the
benefit of an exemption from state taxation of interest to an extent equal to
or greater than that of the bonds they replace, (ii) must have a fixed
maturity date of at least 10 years in the case of an IM-IT or a State Trust
or, in the case of an IM-IT Limited Maturity, IM-IT Intermediate or IM-IT
Short Intermediate Trust, must have a fixed maturity date within the range set
forth under "Unitholder Explanations--Settlement of Bonds in the Trusts--The
Fund", (iii) must be purchased at a price that results in a yield to maturity
and in a current return, in each case as of the Date of Deposit, at least
equal to that of the Failed Bonds, (iv) shall not be "when, as and if
issued"bonds, (v) must be rated "BBB-"or better in the case of the Insured
Trusts by Standard & Poor's or "Baa"or better in the case of the Insured
Trusts by Moody's Investors Service, Inc. and (vi) with respect to each
Insured Trust, must be insured by one of the Preinsured Bond Insurers or be
eligible for (and when acquired be insured under) the insurance obtained by
such Insured Trust. Whenever a Replacement Bond has been acquired for the
Fund, the Trustee shall, within five days thereafter, notify all Unitholders
of the affected Trust of the acquisition of the Replacement Bond and shall, on
the next monthly distribution date which is more than 30 days thereafter, make
a pro rata distribution of the amount, if any, by which the cost to the
affected Trust of the Failed Bond exceeded the cost of the Replacement Bond
plus accrued interest. Once the original corpus of a Trust is acquired, the
Trustee will have no power to vary the investment of the Trust; i.e., the
Trust will have no managerial power to take advantage of market variation to
improve a Unitholder's investment.
If the right of limited substitution described in the preceding paragraph
shall not be utilized to acquire Replacement Bonds in the event of a failed
contract, the Sponsor will refund the sales charge attributable to such Failed
Bonds to all Unitholders of the affected Trust and distribute the principal
and accrued interest (at the coupon rate of such Failed Bonds to the date the
Failed Bonds are removed from the Fund) attributable to such Failed Bonds not
more than 30 days after such removal or such earlier time as the Trustee in
its sole discretion deems to be in the interest of the Unitholders. All such
interest paid to a Unitholder which accrued after the expected date of
settlement for purchase of his Units will be paid by the Sponsor and
accordingly will not be treated as tax-exempt income. In the event a
Replacement Bond should not be acquired by the Fund, the Estimated Net Annual
Interest Income per Unit for the affected Trust would be reduced and the
Estimated Current Return and Estimated Long-Term Return thereon might be
lowered. In addition, Unitholders should be aware that they may not be able at
the time of receipt of such principal to reinvest such proceeds in other
securities at a yield equal to or in excess of the yield which such proceeds
were earning to Unitholders in the affected Trust.
Bond Redemptions. Certain of the Bonds in certain of the Trusts may be subject
to redemption prior to their stated maturity date pursuant to sinking fund
provisions, call provisions or extraordinary optional or mandatory redemption
provisions or otherwise. A sinking fund is a reserve fund accumulated over a
period of time for retirement of debt. A callable debt obligation is one which
is subject to redemption or refunding prior to maturity at the option of the
issuer. A refunding is a method by which a debt obligation is redeemed, at or
before maturity, by the proceeds of a new debt obligation. In general, call
provisions are more likely to be exercised when the offering side valuation is
at a premium over par than when it is at a discount from par. The exercise of
redemption or call provisions will (except to the extent the proceeds of the
called Bonds are used to pay for Unit redemptions) result in the distribution
of principal and may result in a reduction in the amount of subsequent
interest distributions; it may also affect the current return on Units of the
Trust involved. Each Trust portfolio contains a listing of the sinking fund
and call provisions, if any, with respect to each of the debt obligations.
Extraordinary optional redemptions and mandatory redemptions result from the
happening of certain events. Generally, events that may permit the
extraordinary optional redemption of Bonds or may require the mandatory
redemption of Bonds include, among others: a final determination that the
interest on the Bonds is taxable; the substantial damage or destruction by
fire or other casualty of the project for which the proceeds of the Bonds were
used; an exercise by a local, state or Federal governmental unit of its power
of eminent domain to take all or substantially all of the project for which
the proceeds of the Bonds were used; changes in the economic availability of
raw materials, operating supplies or facilities or technological or other
changes which render the operation of the project for which the proceeds of
the Bonds were used uneconomic; changes in law or an administrative or
judicial decree which renders the performance of the agreement under which the
proceeds of the Bonds were made available to finance the project impossible or
which creates unreasonable burdens or which imposes excessive liabilities,
such as taxes, not imposed on the date the Bonds are issued on the issuer of
the Bonds or the user of the proceeds of the Bonds; an administrative or
judicial decree which requires the cessation of a substantial part of the
operations of the project financed with the proceeds of the Bonds; an
overestimate of the costs of the project to be financed with the proceeds of
the Bonds resulting in excess proceeds of the Bonds which may be applied to
redeem Bonds; or an underestimate of a source of funds securing the Bonds
resulting in excess funds which may be applied to redeem Bonds. The issuer of
certain Bonds in a Trust may have sold or reserved the right to sell, upon the
satisfaction of certain conditions, to third parties all or any portion of its
rights to call Bonds in accordance with the stated redemption provisions of
such Bonds. In such a case the issuer no longer has the right to call the
Bonds for redemption unless it reacquires the rights from such third party. A
third party pursuant to these rights may exercise the redemption provisions
with respect to a Bond at a time when the issuer of the Bond might not have
called a Bond for redemption had it not sold such rights. The Sponsor is
unable to predict all of the circumstances which may result in such redemption
of an issue of Bonds. See "Portfolio"for each Trust and footnote (3) in the
"Notes to Portfolios". See also the discussion of single family mortgage and
multi-family revenue bonds above for more information on the call provisions
of such bonds.
Distributions. Distributions of interest received by the Fund, pro rated on an
annual basis, will be made on a monthly basis, unless the Unitholder elects to
receive them semi-annually. The first such distribution will be in the amount
indicated under "Per Unit Information"for the applicable Trust and will be
made on the fifteenth day of the month indicated under "Initial
Distribution"therein to Unitholders of record on the first day of such month.
The first distribution of funds from the Principal Account, if any, will be
made on the first semi-annual distribution date to Unitholders of record on
the first semi-annual record date, and thereafter such distributions will be
made on a semi-annual basis, except under certain special circumstances (see
"Unitholder Explanations--Public Offering--Distributions of Interest and
Principal").
Change of Distribution Option. The plan of distribution selected by a
Unitholder will remain in effect until changed. Unitholders purchasing Units
in the secondary market will initially receive distributions in accordance
with the election of the prior owner. Unitholders may change the plan of
distribution in which they are participating. For convenience of Unitholders,
the Trustee will furnish a card for this purpose; cards may also be obtained
upon request from the Trustee. Unitholders desiring to change their plan of
distribution may so indicate on the card and return it together with their
certificate and such other documentation that the Trustee may then require, to
the Trustee. Certificates should only be sent by registered or certified mail
to minimize the possibility of their being lost or stolen. If the card and
certificate are properly presented to the Trustee, the change will become
effective as of the opening of business on the first day after the next
succeeding semi-annual record date and will be effective, unless further
changed, for all subsequent distributions.
Certificates. The Trustee is authorized to treat as the record owner of Units
that person who is registered as such owner on the books of the Trustee.
Ownership of Units of each Trust is evidenced by separate registered
certificates executed by the Trustee and the Sponsor. Certificates are
transferable by presentation and surrender to the Trustee properly endorsed or
accompanied by a written instrument or instruments of transfer. A Unitholder
must sign exactly as his name appears on the face of the certificate with the
signature guaranteed by a participant in the Securities Transfer Agents
Medallion Program ("STAMP") or such other signature guaranty program in
addition to, or in substitution for, STAMP, as may be accepted by the Trustee.
In certain instances the Trustee may require additional documents such as, but
not limited to, trust instruments, certificates of death, appointments as
executor or administrator or certificates of corporate authority. Certificates
will be issued in denominations of one Unit or any multiple thereof.
Certificates for Units will bear appropriate notations on their face
indicating which plan of distribution has been selected in respect thereof. If
a change in the plan of distribution is made, the existing certificate must be
surrendered to the Trustee and a new certificate will be issued, at no charge
to the Unitholder, to reflect the currently effective plan of distribution.
Although no such charge is now made or contemplated, the Trustee may require a
Unitholder to pay a reasonable fee for each certificate re-issued (other than
as a result of a change in plan of distribution) or transferred and to pay any
governmental charge that may be imposed in connection with each such transfer
or interchange. Destroyed, stolen, mutilated or lost certificates will be
replaced upon delivery to the Trustee of satisfactory indemnity, evidence of
ownership and payment of expenses incurred. Mutilated certificates must be
surrendered to the Trustee for replacement.
ESTIMATED CURRENT RETURNS AND ESTIMATED LONG-TERM RETURNS
As of the close of business on the day before the Date of Deposit (except for
the IM-IT as of 8:00 A.M. Central Time on the Date of Deposit) the Estimated
Current Returns and the Estimated Long-Term Returns, under the monthly and
semi-annual distribution plans, were as set forth in the "Per Unit
Information"for each Trust. Estimated Current Return is calculated by dividing
the estimated net annual interest income per Unit by the Public Offering
Price. The estimated net annual interest income per Unit will vary with
changes in fees and expenses of the Trustee and the Evaluator and with the
principal prepayment, redemption, maturity, exchange or sale of Securities
while the Public Offering Price will vary with changes in the offering price
of the underlying Securities; therefore, there is no assurance that the
present Estimated Current Return will be realized in the future. Estimated
Long-Term Return is calculated using a formula which (1) takes into
consideration, and determines and factors in the relative weightings of, the
market values, yields (which takes into account the amortization of premiums
and the accretion of discounts) and estimated retirements of all of the
Securities in a Trust and (2) takes into account the expenses and sales charge
associated with each Trust Unit. Since the market values and estimated
retirements of the Securities and the expenses of a Trust will change, there
is no assurance that the present Estimated Long-Term Return will be realized
in the future. The Estimated Current Return and Estimated Long-Term Return are
expected to differ because the calculation of Estimated Long-Term Return
reflects the estimated date and amount of principal returned while the
Estimated Current Return calculation includes only net annual interest income
and Public Offering Price.
In order to acquire certain of the Securities contracted for by the Sponsor
for deposit in the Fund, it may be necessary for the Sponsor or Trustee to pay
on the settlement dates for delivery of such Securities amounts covering
accrued interest on such Securities which exceed the amounts which will be
made available through cash furnished by the Sponsor on the Date of Deposit,
which amount of cash may exceed the interest which would accrue to the First
Settlement Date. The Trustee has agreed to pay for any amounts necessary to
cover any such excess and will be reimbursed therefor, when funds become
available from interest payments on the particular Securities with respect to
which such payments may have been made. Also, since interest on any "when, as
and if issued"Securities does not begin accruing as tax-exempt interest income
to the benefit of Unitholders until their respective dates of delivery, the
Trustee may, in order to maintain (or in some cases approach) for the
Unitholders the same estimated net annual interest incomes during the first
year of the Trusts' operations as is indicated under "Per Unit Information"for
the applicable Trust, reduce its fee (and to the extent necessary pay Trust
expenses) in an amount equal to that indicated under "Per Unit Information"for
the applicable Trust.
INTEREST EARNING SCHEDULE
Calculation of Estimated Net Annual Interest Income. The estimated net annual
interest income is based on 360 days. To account for the estimated net annual
interest income per Unit in a Trust, it is necessary to use the following
information.
The beginning interest date for each Trust is July 25, 1995. The first monthly
record date for each Trust (September 1, 1995) is 36 days from such date. The
daily rates of estimated net annual interest income per Unit accrued on a
monthly basis are $.15247, $.14416, $.14450, $.14618 and $.14482 for the
IM-IT, Colorado IM-IT, Missouri IM-IT, New Mexico IM-IT and Tennessee IM-IT
Trusts, respectively. This amounts to $5.49, $5.19, $5.20, $5.26 and $5.21 for
the IM-IT, Colorado IM-IT, Missouri IM-IT, New Mexico IM-IT and Tennessee
IM-IT Trusts, respectively.
Utilizing the preceding information assuming the monthly payment option, the
following procedure illustrates the calculation of first year estimated net
annual interest income per Unit for the Colorado IM-IT Trust:
The Colorado IM-IT Trust accrues
$5.19 to the first record date plus
$43.30 which is 10 normal distributions at $4.33, and finally adding
$3.41 which has accrued from July 1, 1996 until July 25, 1996 which completes
the 360 day cycle (24 days times the daily factor)
Total $51.90 interest earned / $1,000.00 (Date of Deposit Public Offering
Price) = 5.19% Estimated Current Return as of the Date of Deposit.
ACCRUED INTEREST
Accrued Interest. Accrued interest is an accumulation of unpaid interest on
securities which generally is paid semi-annually, although the Trust accrues
such interest daily. Because of this, the Trust always has an amount of
interest earned but not yet collected by the Trustee. For this reason, with
respect to sales settling subsequent to the First Settlement Date, the Public
Offering Price of Units will have added to it the proportionate share of
accrued interest to the date of settlement. Unitholders will receive on the
next distribution date of the Trust the amount, if any, of accrued interest
paid on their Units.
In an effort to reduce the amount of accrued interest which would otherwise
have to be paid by Unitholders, the Trustee will advance the amount of accrued
interest to the Sponsor as the Unitholder of record as of the First Settlement
Date. Consequently, the amount of accrued interest to be added to the Public
Offering Price of Units will include only accrued interest from the First
Settlement Date to the date of settlement, less any distributions from the
Interest Account subsequent to the First Settlement Date. See "Public
Offering--Distributions of Interest and Principal."
Because of the varying interest payment dates of the Securities, accrued
interest at any point in time will be greater than the amount of interest
actually received by a Trust and distributed to Unitholders. If a Unitholder
sells or redeems all or a portion of his Units, he will be entitled to receive
his proportionate share of the accrued interest from the purchaser of his
Units. Since the Trustee has the use of the funds held in the Interest Account
for distributions to Unitholders and since such Account is
non-interest-bearing to Unitholders, the Trustee benefits thereby.
PUBLIC OFFERING
General. Units are offered at the Public Offering Price. During the initial
offering period the Public Offering Price is based on the offering prices of
the Securities in each Trust and includes a sales charge of 4.9% of the Public
Offering Price (5.152% of the aggregate offering price of the Securities) for
an IM-IT or a State Trust, 4.3% of the Public Offering Price (4.493% of the
aggregate offering price of the Securities) for an IM-IT Limited Maturity
Trust, 3.9% of the Public Offering Price (4.058% of the aggregate offering
price of the Securities) for an IM-IT Intermediate Trust and 3.0% of the
Public Offering Price (3.093% of the aggregate offering price of the
Securities) for an IM-IT Short Intermediate Trust. After the initial public
offering period, the secondary market Public Offering Price is based on the
bid prices of the Securities in each Trust and includes a sales charge
determined in accordance with the table set forth below, which is based upon
the dollar weighted average maturity of each Trust plus in each case accrued
interest, if any. For purposes of computation, Bonds will be deemed to mature
on their expressed maturity dates unless: (a) the Bonds have been called for
redemption or funds or securities have been placed in escrow to redeem them on
an earlier call date, in which case such call date will be deemed to be the
date upon which they mature; or (b) such Bonds are subject to a "mandatory
tender", in which case such mandatory tender will be deemed to be the date
upon which they mature.
The effect of this method of sales charge computation will be that different
sales charge rates will be applied to each Trust based upon the dollar
weighted average maturity of such Trust's Portfolio, in accordance with the
following schedule:
<TABLE>
<CAPTION>
Years To Maturity Sales Charge Years To Maturity Sales Charge
<S> <C> <C> <C>
1 1.523% 9 4.712%
2 2.041 10 4.932
3 2.564 11 4.932
4 3.199 12 4.932
5 3.842 13 5.374
6 4.058 14 5.374
7 4.275 15 5.374
8 4.493 16 to 30 6.045
</TABLE>
The sales charges in the above table are expressed as a percentage of the
aggregate bid prices of the Securities in a Trust. Expressed as a percent of
the Public Offering Price, the sales charge on a Trust consisting entirely of
a portfolio of Bonds with 15 years to maturity would be 5.10%. The sales
charge applicable to quantity purchases during the initial offering period is,
however, reduced on a graduated basis to any person acquiring 100 or more
Units as follows:
<TABLE>
<CAPTION>
Dollar Amount of Sales
Charge Reduction Per Unit
Aggregate Number of
Units Purchased IM-IT, State
and National
Quality Trusts Other Trusts
<S> <C> <C>
100-249 Units......... $ 4.00 $ 4.00
250-499 Units......... $ 6.00 $ 6.00
500-999 Units......... $ 14.00 $ 9.00
1,000 or more Units... $ 19.00 $ 11.00
</TABLE>
Any such reduced sales charge shall be the responsibility of the selling
Underwriter, broker, dealer or agent. The Sponsor will, however, increase the
concession or agency commission for such quantity purchases. See "Public
Offering--Unit Distribution". This reduced sales charge structure will apply
on all purchases by the same person from any one Underwriter or dealer of
units of Van Kampen American Capital-sponsored unit investment trusts which
are being offered in the initial offering period (a) on any one day (the
"Initial Purchase Date") or (b) on any day subsequent to the Initial Purchase
Date, if (1) the units purchased are of a unit investment trust purchased on
the Initial Purchase Date, and (2) the person purchasing the units purchased a
sufficient amount of units on the Initial Purchase Date to qualify for a
reduced sales charge on such date. In the event units of more than one trust
are purchased on the Initial Purchase Date, the aggregate dollar amount of
such purchases will be used to determine whether purchasers are eligible for a
reduced sales charge. Such aggregate dollar amount will be divided by the
public offering price per unit (on the day preceding the date of purchase) of
each respective trust purchased to determine the total number of units which
such amount could have purchased of each individual trust. Purchasers must
then consult the applicable trust's prospectus to determine whether the total
number of units which could have been purchased of a specific trust would have
qualified for a reduced sales charge and, if so qualified, the amount of such
reduction. Assuming a purchaser qualifies for a sales charge reduction or
reductions, to determine the applicable sales charge reduction or reductions
it is necessary to accumulate all purchases made on the Initial Purchase Date
and all purchases made in accordance with (b) above. Units purchased in the
name of the spouse of a purchaser or in the name of a child of such purchaser
under 21 years of age will be deemed for the purposes of calculating the
applicable sales charge to be additional purchases by the purchaser. The
reduced sales charges will also be applicable to a trustee or other fiduciary
purchasing securities for one or more trust estate or fiduciary accounts.
Employees of Van Kampen American Capital Distributors, Inc. and its
subsidiaries may purchase Units of the Trust at the current Public Offering
Price less the underwriting commission during the initial offering period, and
less the dealer's concession for secondary market transactions. Registered
representatives of selling Underwriters may purchase Units of the Fund at the
current Public Offering Price less the underwriting commission during the
initial offering period, and less the dealer's concession for secondary market
transactions. Registered representatives of selling brokers, dealers, or
agents may purchase Units of the Fund at the current Public Offering Price
less the dealer's concession during the initial offering period and for
secondary market transactions.
Units may be purchased in the primary or secondary market at the Public
Offering Price (for purchases which do not qualify for a sales charge
reduction for quantity purchases) less the concession the Sponsor typically
allows to brokers and dealers for purchases (see "Trust
Administration--General--Unit Distribution") by (1) investors who purchase
Units through registered investment advisers, certified financial planners and
registered broker-dealers who in each case either charge periodic fees for
financial planning, investment advisory or asset management services, or
provide such services in connection with the establishment of an investment
account for which a comprehensive "wrap fee"charge is imposed, (2) bank trust
departments investing funds over which they exercise exclusive discretionary
investment authority and that are held in a fiduciary, agency, custodial or
similar capacity, (3) any person who for at least 90 days, has been an
officer, director or bona fide employee of any firm offering Units for sale to
investors or their immediate family members (as described above) and (4)
officers and directors of bank holding companies that make Units available
directly or through subsidiaries or bank affiliates. Notwithstanding anything
to the contrary in this Prospectus, such investors, bank trust departments,
firm employees and bank holding company officers and directors who purchase
Units through this program will not receive sales charge reductions for
quantity purchases.
Offering Price. Public Offering Price of the Units will vary from the amounts
stated under "Summary of Essential Financial Information"in accordance with
fluctuations in the prices of the underlying Securities in each Trust.
As indicated above, the price of the Units as of the date the Securities were
deposited in each Trust was determined by adding to the aggregate offering
price of the Securities of a Trust an amount equal to the applicable sales
charge expressed as a percentage of the aggregate offering price of the
Securities and dividing the sum so obtained by the number of Units
outstanding. This computation produced a gross underwriting commission equal
to such sales charge expressed as a percentage of the Public Offering Price.
Such price determination as of the close of business on the day before the
Date of Deposit (except for the IM-IT as of 8:00 A.M. Central Time on the Date
of Deposit) was made on the basis of an evaluation of the Securities in each
Trust prepared by Interactive Data Services, Inc., a firm regularly engaged in
the business of evaluating, quoting or appraising comparable securities. After
the close of business on the day before the Date of Deposit (except for the
IM-IT as of 8:00 A.M. Central Time on the Date of Deposit) and during the
period of initial offering, the Evaluator will appraise or cause to be
appraised daily the value of the underlying Securities of each Trust as of
4:00 P.M. Eastern time on days the New York Stock Exchange is open for
business and will adjust the Public Offering Price of the Units commensurate
with such appraisal. Such Public Offering Price will be effective for all
orders received at or prior to 4:00 P.M. Eastern time on each such day. Orders
received by the Trustee, Sponsor or any Underwriter for purchases, sales or
redemptions after that time, or on a day when the New York Stock Exchange is
closed, will be held until the next determination of price. For secondary
market sales the Public Offering Price per Unit will be equal to the aggregate
bid price of the Securities in the Trust plus an amount equal to the
applicable secondary market sales charge expressed as a percentage of the
aggregate bid price of the Securities and dividing the sum so attained by the
number of Units then outstanding. This computation produces a gross commission
equal to such sales charge expressed as a percentage of the Public Offering
Price. For secondary market purposes such appraisal and adjustment with
respect to a Trust will be made by the Evaluator as of 4:00 P.M. Eastern time
on days in which the New York Stock Exchange is open for each day on which any
Unit of such Trust is tendered for redemption, and it shall determine the
aggregate value of any Trust as of 4:00 P.M. Eastern time on such other days
as may be necessary.
The aggregate price of the Securities in each Trust has been and will be
determined on the basis of bid prices or offering prices, as is appropriate,
(a) on the basis of current market prices for the Securities obtained from
dealers or brokers who customarily deal in bonds comparable to those held by
the Fund; (b) if such prices are not available for any particular Securities,
on the basis of current market prices for comparable bonds; (c) by causing the
value of the Securities to be determined by others engaged in the practice of
evaluation, quoting or appraising comparable bonds; or (d) by any combination
of the above. Market prices of the Securities will generally fluctuate with
changes in market interest rates. Unless Bonds are in default in payment of
principal or interest or in significant risk of such default, the Evaluator
will not attribute any value to the insurance obtained by an Insured Trust, if
any.
The Evaluator will consider in its evaluation of Bonds which are in default in
payment of principal or interest or, in the Sponsor's opinion, in significant
risk of such default (the "Defaulted Bonds") the value of the insurance
guaranteeing interest and principal payments. The value of the insurance will
be equal to the difference between (i) the market value of Defaulted Bonds
assuming the exercise of the right to obtain Permanent Insurance (less the
insurance premiums and related expenses attributable to the purchase of
Permanent Insurance) and (ii) the market value of such Defaulted Bonds not
covered by Permanent Insurance. In addition, the Evaluator will consider the
ability of the affected Portfolio Insurer to meet its commitments under any
Trust insurance policy, including the commitments to issue Permanent
Insurance. It is the position of the Sponsor that this is a fair method of
valuing the Bonds and the insurance obtained by an Insured Trust and reflects
a proper valuation method in accordance with the provisions of the Investment
Company Act of 1940.
No value has been ascribed to insurance obtained by an Insured Trust, if any,
as of the date of this Prospectus.
The initial or primary Public Offering Price of the Units is equal to the
offering price per Unit of the underlying Securities in each Trust plus the
applicable sales charge plus interest accrued but unpaid from the First
Settlement Date to the date of settlement. The secondary market Public
Offering Price is equal to the bid price per Unit of the Securities in each
Trust plus the applicable sales charge plus accrued interest. The offering
price of Securities in each Trust may be expected to average approximately
0.5%-1% more than the bid price of such Securities. On the Date of Deposit,
the offering side evaluations of the Securities in the Trusts were higher than
the bid side evaluations of such Securities by the respective amounts
indicated under footnote (5) in "Notes to Portfolios".
Although payment is normally made three business days following the order for
purchase, payment may be made prior thereto. A person will become the owner of
Units on the date of settlement provided payment has been received. Cash, if
any, made available to the Sponsor prior to the date of settlement for the
purchase of Units may be used in the Sponsor's business and may be deemed to
be a benefit to the Sponsor, subject to the limitations of the Securities
Exchange Act of 1934. Delivery of certificates representing Units so ordered
will be made three business days following such order or shortly thereafter.
See "Redemption of Units"below for information regarding the ability to redeem
Units ordered for purchase.
Market for Units. During the initial public offering period, the Sponsor
and/or certain of the Underwriters intend to offer to purchase Units at a
price equivalent to the Public Offering Price which is based upon the
aggregate offering price per Unit of the underlying Securities in each Trust
plus accrued interest to the date of settlement less the related sales
commission. Afterward, although they are not obligated to do so, the Sponsor
intends to, and certain of the other Underwriters may, maintain a market for
the Units offered hereby and to offer continuously to purchase such Units at
prices, subject to change at any time, based upon the aggregate bid prices of
the Securities in the portfolio of each Trust plus interest accrued to the
date of settlement and plus any principal cash on hand, less any amounts
representing taxes or other governmental charges payable out of the Trust and
less any accrued Trust expenses. If the supply of Units exceeds demand or if
some other business reason warrants it, the Sponsor and/or the Underwriters
may either discontinue all purchases of Units or discontinue purchases of
Units at such prices. In the event that a market is not maintained for the
Units and the Unitholder cannot find another purchaser, a Unitholder of any
Trust desiring to dispose of his Units may be able to dispose of such Units
only by tendering them to the Trustee for redemption at the Redemption Price,
which is based upon the aggregate bid price of the Securities in the portfolio
of such Trust plus any accrued interest. The aggregate bid prices of the
underlying Securities in a Trust are expected to be less than the related
aggregate offering prices. See "Redemption of Units"below. A Unitholder who
wishes to dispose of his Units should inquire of his broker as to current
market prices in order to determine whether there is in existence any price in
excess of the Redemption Price and, if so, the amount thereof.
Distributions of Interest and Principal. Interest received by the Fund,
including that part of the proceeds of any disposition of Securities which
represents accrued interest, is credited by the Trustee to the Interest
Account for the appropriate Trust. Other receipts are credited to the
Principal Account for the appropriate Trust. Interest received by the Fund
after deduction of amounts sufficient to reimburse the Trustee, without
interest, for any amounts advanced and paid to the Sponsor as the Unitholder
of record as of the First Settlement Date (see "Public Offering--Offering
Price"above) will be distributed on or shortly after the fifteenth day of each
month on a pro rata basis to Unitholders of record of a Trust as of the
preceding record date who are entitled to distributions at that time under the
plan of distributions chosen. All distributions will be net of applicable
expenses. The pro rata share of cash in the Principal Account of a Trust will
be computed as of the date set forth under "Per Unit Information"for the
applicable Trust, and thereafter as of the semi-annual record date, and
distributions to the Unitholders as of such record date will be made on or
shortly after the fifteenth day of such month. Proceeds received from the
disposition of any of the Securities after such record date and prior to the
following distribution date will be held in the Principal Account and not
distributed until the next distribution date. The Trustee is not required to
pay interest on funds held in any Principal or Interest Account (but may
itself earn interest thereon and therefore benefits from the use of such
funds) nor to make a distribution from the Principal Account unless the amount
available for distribution therein shall equal at least $1.00 per Unit.
However, should the amount available for distribution in the Principal Account
equal or exceed $10.00 per Unit, the Trustee will make a special distribution
from the Principal Account on the next succeeding monthly distribution date to
holders of record on the related monthly record date.
The distribution to the Unitholders of a Trust as of each record date after
the First Settlement Date will be made on the following distribution date or
shortly thereafter and shall consist of an amount substantially equal to such
portion of the Unitholder's pro rata share of the estimated net annual
interest income in the Interest Account of such Trust after deducting
estimated expenses attributable as is consistent with the distribution plan
chosen. Because interest payments are not received by the Fund at a constant
rate throughout the year, such interest distribution may be more or less than
the amount credited to such Interest Account as of the record date. For the
purpose of minimizing fluctuations in the distributions from an Interest
Account, the Trustee is authorized to advance such amounts as may be necessary
to provide interest distributions of approximately equal amounts. The Trustee
shall be reimbursed for any such advances from funds in the applicable
Interest Account on the ensuing record date. Persons who purchase Units
between a record date and a distribution date will receive their first
distribution on the second distribution date after the purchase, under the
applicable plan of distribution.
As of the first day of each month, the Trustee will deduct from the Interest
Account and, to the extent funds are not sufficient therein, from the
Principal Account, amounts necessary to pay the expenses of the Fund (as
determined on the basis set forth under "Trust Administration--Fund
Administration and Expenses"). The Trustee also may withdraw from said
Accounts such amounts, if any, as it deems necessary to establish a reserve
for any governmental charges payable out of the Fund. Amounts so withdrawn
shall not be considered a part of the Fund's assets until such time as the
Trustee shall return all or any part of such amounts to the appropriate
Accounts. In addition, the Trustee may withdraw from the Interest and
Principal Accounts such amounts as may be necessary to cover purchases of
Replacement Bonds and redemptions of Units by the Trustee.
Reinvestment Option. Unitholders of all unit investment trusts sponsored by
Van Kampen American Capital Distributors, Inc. (except Unitholders of a New
York IM-IT Trust or a New York IM-IT Intermediate Laddered Maturity Trust),
may elect to have each distribution of interest income, capital gains and/or
principal on their Units automatically reinvested in shares of any of the open
ended mutual funds (except for B shares) listed under "Trust
Administration--Sponsor"which are registered in the Unitholder's state of
residence. New York IM-IT Trust and New York IM-IT Intermediate Laddered
Maturity Trust Unitholders, other than those residing in the Commonwealth of
Massachusetts, may elect to have each distribution of interest income, capital
gains and/or principal on their Units automatically reinvested in shares of
First Investors New York Insured Tax Free Fund, Inc., a fund which invests
primarily in securities exempt from federal and New York state and city income
tax. Such mutual funds are hereinafter collectively referred to as the
"Reinvestment Funds".
Each Reinvestment Fund has investment objectives which differ in certain
respects from those of the Trusts. The prospectus relating to each
Reinvestment Fund describes the investment policies of such fund and sets
forth the procedures to follow to commence reinvestment. A Unitholder may
obtain a prospectus for the respective Reinvestment Funds from Van Kampen
American Capital Distributors, Inc. at One Parkview Plaza, Oakbrook Terrace,
Illinois 60181. Texas residents who desire to reinvest may request that a
broker-dealer registered in Texas send the prospectus relating to the
respective fund.
After becoming a participant in a reinvestment plan, each distribution of
interest income, capital gains and/or principal on the participant's Units
will, on the applicable distribution date, automatically be applied, as
directed by such person, as of such distribution date by the Trustee to
purchase shares (or fractions thereof) of the applicable Reinvestment Fund at
a net asset value as computed as of the close of trading on the New York Stock
Exchange on such date, plus a sales charge of $1.00 per $100 of reinvestment
except if the participant selects the First Investors New York Insured Tax
Free Fund, Inc., in which case the sales charge will be $1.50 per $100 of
reinvestment, or except if the participant selects the Van Kampen Merritt
Money Market Fund, the Van Kampen Merritt Tax Free Money Fund, the Van Kampen
Merritt Florida Insured Tax Free Income Fund, the Van Kampen Merritt New
Jersey Tax Free Income Fund, or the Van Kampen Merritt New York Tax Free
Income Fund, in which case no sales charge applies. A minimum of one-half of
such sales charge would be paid to Van Kampen American Capital Distributors,
Inc. for all Reinvestment Funds except First Investors New York Insured Tax
Free Fund, Inc., in which case such sales charge would be paid to First
Investors Management Company, Inc.
Confirmations of all reinvestments by a Unitholder into a Reinvestment Fund
will be mailed to the Unitholder by such Reinvestment Fund.
A participant may at any time prior to five days preceding the next succeeding
distribution date, by so notifying the Trustee in writing, elect to terminate
his or her reinvestment plan and receive future distributions of his or her
Units in cash. There will be no charge or other penalty for such termination.
Each Reinvestment Fund, its sponsor and investment adviser shall have the
right to terminate at any time the reinvestment plan relating to such fund.
Redemption of Units. A Unitholder may redeem all or a portion of his Units by
tender to the Trustee, at its Unit Investment Trust Division, 101 Barclay
Street, 20th Floor, New York, New York 10286, of the certificates representing
the Units to be redeemed, duly endorsed or accompanied by proper instruments
of transfer with signature guaranteed (or by providing satisfactory indemnity,
as in connection with lost, stolen or destroyed certificates) and by payment
of applicable governmental charges, if any. Thus, redemption of Units cannot
be effected until certificates representing such Units have been delivered to
the person seeking redemption or satisfactory indemnity provided. No
redemption fee will be charged. On the third business day following such
tender the Unitholder will be entitled to receive in cash an amount for each
Unit equal to the Redemption Price per Unit next computed after receipt by the
Trustee of such tender of Units. The "date of tender"is deemed to be the date
on which Units are received by the Trustee, except that as regards Units
received after 4:00 P.M. Eastern time on days of trading on the New York Stock
Exchange, the date of tender is the next day on which such Exchange is open
for trading and such Units will be deemed to have been tendered to the Trustee
on such day for redemption at the Redemption Price computed on that day.
Under regulations issued by the Internal Revenue Service, the Trustee will be
required to withhold a specified percentage of the principal amount of a Unit
redemption if the Trustee has not been furnished the redeeming Unitholder's
tax identification number in the manner required by such regulations. Any
amount so withheld is transmitted to the Internal Revenue Service and may be
recovered by the Unitholder only when filing a return. Under normal
circumstances the Trustee obtains the Unitholder's tax identification number
from the selling broker. However, at any time a Unitholder elects to tender
Units for redemption, such Unitholder should provide a tax identification
number to the Trustee in order to avoid this possible "back-up withholding"in
the event the Trustee has not been previously provided such number.
Accrued interest paid on redemption shall be withdrawn from the Interest
Account of such Trust or, if the balance therein is insufficient, from the
Principal Account of such Trust. All other amounts will be withdrawn from the
Principal Account of such Trust. The Trustee is empowered to sell underlying
Securities of a Trust in order to make funds available for redemption. Units
so redeemed shall be cancelled.
The Redemption Price per Unit (as well as the secondary market Public Offering
Price) will be determined on the basis of the bid price of the Securities in
each Trust, while the initial and primary Public Offering Price of Units will
be determined on the basis of the offering price of the Securities in each
Trust, as of 4:00 P.M. Eastern time on days of trading on the New York Stock
Exchange on the date any such determination is made. On the Date of Deposit
the Public Offering Price per Unit (which is based on the offering prices of
the Bonds in each Trust and includes the sales charge) exceeded the value at
which Units could have been redeemed (based upon the current bid prices of the
Securities in such Trust) by the amount shown under "Summary of Essential
Financial Information". While the Trustee has the power to determine the
Redemption Price per Unit when Units are tendered for redemption, such
authority has been delegated to the Evaluator which determines the price per
Unit on a daily basis. The Redemption Price per Unit is the pro rata share of
each Unit in each Trust on the basis of (i) the cash on hand in such Trust or
moneys in the process of being collected, (ii) the value of the Securities in
such Trust based on the bid prices of the Securities therein, except for cases
in which the value of insurance has been included, (iii) interest accrued
thereon, less (a) amounts representing taxes or other governmental charges
payable out of such Trust and (b) the accrued expenses of such Trust. The
Evaluator may determine the value of the Securities in each Trust by employing
any of the methods set forth in "Public Offering--Offering Price". In
determining the Redemption Price per Unit no value will be assigned to the
portfolio insurance maintained on the Bonds in an Insured Trust unless such
Bonds are in default in payment of principal or interest or in significant
risk of such default. For a description of the situations in which the
Evaluator may value the insurance obtained by the Insured Trusts, see "Public
Offering--Offering Price"above.
The price at which Units may be redeemed could be less than the price paid by
the Unitholder and may be less than the par value of the Securities
represented by the Units so redeemed. As stated above, the Trustee may sell
Securities to cover redemptions. When Securities are sold, the size and
diversity of the affected Trust will be reduced. Such sales may be required at
a time when Securities would not otherwise be sold and might result in lower
prices than might otherwise be realized.
The right of redemption may be suspended and payment postponed for any period
during which the New York Stock Exchange is closed, other than for customary
weekend and holiday closings, or during which the Securities and Exchange
Commission determines that trading on that Exchange is restricted or an
emergency exists, as a result of which disposal or evaluation of the
Securities in the Trusts is not reasonably practicable, or for such other
periods as the Securities and Exchange Commission may by order permit. Under
certain extreme circumstances the Sponsor may apply to the Securities and
Exchange Commission for an order permitting a full or partial suspension of
the right of Unitholders to redeem their Units.
Reports Provided. The Trustee shall furnish Unitholders of a Trust in
connection with each distribution a statement of the amount of interest and
the amount of other receipts (received since the preceding distribution), if
any, being distributed expressed in each case as a dollar amount representing
the pro rata share of each Unit of a Trust outstanding. For as long as the
Trustee deems it to be in the best interests of the Unitholders, the accounts
of each Trust shall be audited, not less frequently than annually, by
independent certified public accountants and the report of such accountants
shall be furnished by the Trustee to Unitholders of such Trusts upon request.
Within a reasonable period of time after the end of each calendar year, the
Trustee shall furnish to each person who at any time during the calendar year
was a registered Unitholder of a Trust a statement (i) as to the Interest
Account: interest received (including amounts representing interest received
upon any disposition of Securities) and the percentage of such interest by
states in which the issuers of the Securities are located, deductions for
applicable taxes and for fees and expenses of such Trust, for purchases of
Replacement Bonds and for redemptions of Units, if any, and the balance
remaining after such distributions and deductions, expressed in each case both
as a total dollar amount and as a dollar amount representing the pro rata
share of each Unit outstanding on the last business day of such calendar year;
(ii) as to the Principal Account: the dates of disposition of any Securities
and the net proceeds received therefrom (excluding any portion representing
accrued interest), the amount paid for purchases of Replacement Bonds and for
redemptions of Units, if any, deductions for payment of applicable taxes and
fees and expenses of the Trustee, the amount of "when issued"interest treated
as a return of capital, if any, and the balance remaining after such
distributions and deductions expressed both as a total dollar amount and as a
dollar amount representing the pro rata share of each Unit outstanding on the
last business day of such calendar year; (iii) a list of the Securities held
and the number of Units outstanding on the last business day of such calendar
year; (iv) the Redemption Price per Unit based upon the last computation
thereof made during such calendar year; and (v) amounts actually distributed
during such calendar year from the Interest and Principal Accounts, separately
stated, expressed both as total dollar amounts and as dollar amounts
representing the pro rata share of each Unit outstanding.
In order to comply with Federal and state tax reporting requirements,
Unitholders will be furnished, upon request to the Trustee, evaluations of the
Securities in a Trust furnished to it by the Evaluator.
Each distribution statement of a Trust will reflect pertinent information in
respect of the other plan of distribution so that Unitholders may be informed
regarding the results of such other plan of distribution.
INSURANCE ON THE BONDS IN THE INSURED TRUSTS
Insurance has been obtained by each Insured Trust or by the issuer of such
Bonds, or by a prior owner of such Bonds, or by the Sponsor prior to the
deposit of such Bonds in a Trust guaranteeing prompt payment of interest and
principal, when due, in respect of the Bonds in such Trust. See "Unitholder
Explanations--Settlement of Bonds in the Trusts--Objectives and Securities
Selection". An insurance policy obtained by an Insured Trust, if any, is
non-cancellable and will continue in force so long as such Trust is in
existence, the respective Portfolio Insurer referred to below is still in
business and the Bonds described in such policy continue to be held by such
Trust (see "Portfolio"for the respective Insured Trust). Any portfolio
insurance premium for an Insured Trust, which is an obligation of such Trust,
is paid by each Trust on a monthly basis. Non-payment of premiums on a policy
obtained by an Insured Trust will not result in the cancellation of insurance
but will force the insurer to take action against the Trustee to recover
premium payments due it. The Trustee in turn will be entitled to recover such
payments from such Trust. Premium rates for each issue of Bonds protected by a
policy obtained by an Insured Trust, if any, are fixed for the life of the
Trust. The premium for any Preinsured Bond insurance has been paid by such
issuer, by a prior owner of such Bonds or the Sponsor and any such policy or
policies are non-cancellable and will continue in force so long as the Bonds
so insured are outstanding and the respective Preinsured Bond Insurer remains
in business. If the provider of an original issuance insurance policy is
unable to meet its obligations under such policy or if the rating assigned to
the claims-paying ability of any such insurer deteriorates, the Portfolio
Insurers have no obligation to insure any issue adversely affected by either
of the above described events.
The aforementioned portfolio insurance obtained by an Insured Trust, if any,
guarantees the timely payment of principal and interest on the Bonds as they
fall due. For the purposes of insurance obtained by an Insured Trust, "when
due" generally means the stated maturity date for the payment of principal
and interest. However, in the event (a) an issuer of a Bond defaults in the
payment of principal or interest on such Bond, (b) such issuer enters into a
bankruptcy proceeding or (c) the maturity of such Bond is accelerated, the
affected Portfolio Insurer has the option, in its sole discretion, after
receiving notice of the earliest to occur of such a default, bankruptcy
proceeding or acceleration to pay the outstanding principal amount of such
Bond plus accrued interest to the date of such payment and thereby retire the
Bond from the affected Trust prior to such Bond's stated maturity date. The
insurance does not guarantee the market value of the Bonds or the value of the
Units. Insurance obtained by an Insured Trust, if any, is only effective as to
Bonds owned by and held in such Trust. In the event of a sale of any such Bond
by the Trustee, such insurance terminates as to such Bond on the date of sale.
Pursuant to an irrevocable commitment of the Portfolio Insurers, the Trustee,
upon the sale of a Bond covered under a portfolio insurance policy obtained by
an Insured Trust, has the right to obtain permanent insurance with respect to
such Bond (i.e., insurance to maturity of the Bonds regardless of the identity
of the holder thereof) (the "Permanent Insurance") upon the payment of a
single predetermined insurance premium and any expenses related thereto from
the proceeds of the sale of such Bond. Accordingly, any Bond in an Insured
Trust is eligible to be sold on an insured basis. It is expected that the
Trustee would exercise the right to obtain Permanent Insurance only if upon
such exercise the affected Trust would receive net proceeds (sale of Bond
proceeds less the insurance premium and related expenses attributable to the
Permanent Insurance) from such sale in excess of the sale proceeds if such
Bonds were sold on an uninsured basis. The insurance premium with respect to
each Bond eligible for Permanent Insurance would be determined based upon the
insurability of each Bond as of the Date of Deposit and would not be increased
or decreased for any change in the creditworthiness of each Bond.
The Sponsor believes that the Permanent Insurance option provides an advantage
to an Insured Trust in that each Bond insured by a Trust insurance policy may
be sold out of the affected Trust with the benefits of the insurance attaching
thereto. Thus, the value of the insurance, if any, at the time of sale, can be
realized in the market value of the Bond so sold (which is not the case in
connection with any value attributable to an Insured Trust's portfolio
insurance). See "Public Offering--Offering Price". Because any such insurance
value may be realized in the market value of the Bond upon the sale thereof
upon exercise of the Permanent Insurance option, the Sponsor anticipates that
(a) in the event an Insured Trust were to be comprised of a substantial
percentage of Bonds in default or significant risk of default, it is much less
likely that such Trust would need at some point in time to seek a suspension
of redemptions of Units than if such Trust were to have no such option (see
"Public Offering--Redemption of Units") and (b) at the time of termination of
an Insured Trust, if such Trust were holding defaulted Bonds or Bonds in
significant risk of default such Trust would not need to hold such Bonds until
their respective maturities in order to realize the benefits of such Trust's
portfolio insurance (see "Trust Administration--Amendment or Termination").
Except as indicated below, insurance obtained by an Insured Trust has no
effect on the price or redemption value of Units. It is the present intention
of the Evaluator to attribute a value for such insurance (including the right
to obtain Permanent Insurance) for the purpose of computing the price or
redemption value of Units if the Bonds covered by such insurance are in
default in payment of principal or interest or in significant risk of such
default. The value of the insurance will be the difference between (i) the
market value of a Bond which is in default in payment of principal or interest
or in significant risk of such default assuming the exercise of the right to
obtain Permanent Insurance (less the insurance premium and related expenses
attributable to the purchase of Permanent Insurance) and (ii) the market value
of such Bonds not covered by Permanent Insurance. See "Public
Offering--Offering Price". It is also the present intention of the Trustee not
to sell such Bonds to effect redemptions or for any other reason but rather to
retain them in the portfolio because value attributable to the insurance
cannot be realized upon sale. See "Public Offering--Offering Price"herein for
a more complete description of an Insured Trust's method of valuing defaulted
Bonds and Bonds which have a significant risk of default. Insurance obtained
by the issuer of a Bond is effective so long as such Bond is outstanding.
Therefore, any such insurance may be considered to represent an element of
market value in regard to the Bonds thus insured, but the exact effect, if
any, of this insurance on such market value cannot be predicted.
The portfolio insurance policy or policies obtained by an Insured Trust, if
any, with respect to the Bonds in such Trust were issued by one or more of the
Portfolio Insurers. Any other Preinsured Bond insurance policy (or commitment
therefor) was issued by one of the Preinsured Bond Insurers. See "Unitholder
Explanations--Settlement of Bonds in the Trusts--Objectives and Securities
Selection".
AMBAC Indemnity Corporation ("AMBAC Indemnity") is a Wisconsin-domiciled stock
insurance corporation regulated by the Office of the Commissioner of Insurance
of the State of Wisconsin and licensed to do business in 50 states, the
District of Columbia and the Commonwealth of Puerto Rico, with admitted assets
of approximately $1,988,000,000 (unaudited) and statutory capital of
approximately $1,148,000,000 (unaudited) as of March 31, 1994. Statutory
capital consists of AMBAC Indemnity's policyholders' surplus and statutory
contingency reserve. AMBAC Indemnity is a wholly owned subsidiary of AMBAC
Inc., a 100% publicly-held company. Moody's Investors Service, Inc. and
Standard & Poor's have both assigned a triple-A claims-paying ability rating
to AMBAC Indemnity.
Copies of its financial statements prepared in accordance with statutory
accounting standards are available from AMBAC Indemnity. The address of AMBAC
Indemnity's administrative offices and its telephone number are One State
Street Plaza, 17th Floor, New York, New York, 10004 and (212) 668-0340.
AMBAC Indemnity has entered into quota share reinsurance agreements under
which a percentage of the insurance underwritten pursuant to certain municipal
bond insurance programs of AMBAC Indemnity has been and will be assumed by a
number of foreign and domestic unaffiliated reinsurers.
MBIA Insurance Corporation ("MBIA") is the principal operating subsidiary of
MBIA Inc., a New York Stock Exchange listed company. MBIA Inc. is not
obligated to pay the debts of or claims against MBIA. MBIA is a limited
liability corporation rather than a several liability association. MBIA is
domiciled in the State of New York and licensed to do business in all fifty
states, the District of Columbia, the Commonwealth of the Northern Mariana
Islands, the Commonwealth of Puerto Rico, the Virgin Islands of the United
States and the Territory of Guam. As of March 31, 1995 MBIA had admitted
assets of $3.5 billion (unaudited), total liabilities of $2.4 billion
(unaudited), and total capital and surplus of $1.1 billion (unaudited)
determined in accordance with statutory accounting practices prescribed or
permitted by insurance regulatory authorities. As of December 31, 1994, the
Insurer had admitted assets of $3.4 billion (audited), total liabilities of
$2.3 billion (audited), and total capital and surplus of $1.1 billion
(audited) determined in accordance with statutory accounting practices
prescribed or permitted by insurance regulatory authorities. Copies of MBIA's
year end financial statements prepared in accordance with statutory accounting
practices are available from MBIA. The address of MBIA is 113 King Street,
Armonk, New York 10504.
Effective December 31, 1989, MBIA Inc. acquired Bond Investors Group, Inc. On
January 5, 1990, MBIA acquired all of the outstanding stock of Bond Investors
Group, Inc., the parent of Bond Investors Guaranty Insurance Company (BIG),
now known as MBIA Insurance Corp. of Illinois. Through a reinsurance
agreement, BIG has ceded all of its net insured risks, as well as its unearned
premium and contingency reserves, to MBIA and MBIA has reinsured BIG's net
outstanding exposure.
Moody's Investors Service, Inc. rates all bond issues insured by MBIA "Aaa"and
short term loans "MIG 1,"both designated to be of the highest quality.
Standard & Poor's rates all new issues insured by MBIA "AAA"Prime Grade.
The Moody's Investors Service, Inc. rating of MBIA should be evaluated
independently of the Standard & Poor's rating of MBIA. No application has been
made to any other rating agency in order to obtain additional ratings on the
Bonds. The ratings reflect the respective rating agency's current assessment
of the creditworthiness of MBIA and its ability to pay claims on its policies
of insurance. Any further explanation as to the significance of the above
ratings may be obtained only from the applicable rating agency.
The above ratings are not recommendations to buy, sell or hold the Bonds, and
such ratings may be subject to revision or withdrawal at any time by the
rating agencies. Any downward revision or withdrawal of either or both ratings
may have an adverse effect on the market price of the Bonds.
Financial Guaranty Insurance Company ("Financial Guaranty"or "FGIC") is a
wholly-owned subsidiary of FGIC Corporation (the "Corporation"), a Delaware
holding company. The Corporation is a wholly-owned subsidiary of General
Electric Capital Corporation ("GECC"). Neither the Corporation nor GECC is
obligated to pay the debts of or the claims against Financial Guaranty.
Financial Guaranty is domiciled in the State of New York and is subject to
regulation by the State of New York Insurance Department. As of March 31,
1995, the total capital and surplus of Financial Guaranty was approximately
$962,700,000. Copies of Financial Guaranty's financial statements, prepared on
the basis of statutory accounting principles, and the Corporation's financial
statements, prepared on the basis of generally accepted accounting principles,
may be obtained by writing to Financial Guaranty at 115 Broadway, New York,
New York 10006, Attention: Communications Department, telephone number: (212)
312-3000 or to the New York State Insurance Department at 160 West Broadway,
18th Floor, New York, New York 10013, Attention: Property Companies Bureau,
telephone number: (212) 621-0389.
In addition, Financial Guaranty Insurance Company is currently licensed to
write insurance in all 50 states and the District of Columbia.
Financial Security Assurance, Inc. ("Financial Security" or "FSA") is a
monoline insurance company incorporated on March 16, 1984 under the laws of
the State of New York. The operations of Financial Security commenced on July
25, 1985, and Financial Security received its New York State insurance license
on September 23, 1985. Financial Security and its two wholly owned
subsidiaries are licensed to engage in the financial guaranty insurance
business in 49 states, the District of Columbia and Puerto Rico.
Financial Security and its subsidiaries are engaged exclusively in the
business of writing financial guaranty insurance, principally in respect of
asset-backed and other collateralized securities offered in domestic and
foreign markets. Financial Security and its subsidiaries also write financial
guaranty insurance in respect of municipal and other obligations and reinsure
financial guaranty insurance policies written by other leading insurance
companies. In general, financial guaranty insurance consists of the issuance
of a guaranty of scheduled payments of an issuer's securities, thereby
enhancing the credit rating of those securities, in consideration for payment
of a premium to the insurer.
Financial Security is approximately 91.6% owned by U S WEST, Inc. and 8.4%
owned by The Tokio Marine and Fire Insurance Co., Ltd. ("Tokio Marine").
Neither U S WEST, Inc. nor Tokio Marine is obligated to pay the debts of or
the claims against Financial Security. Financial Security is domiciled in the
State of New York and is subject to regulation by the State of New York
Insurance Department. As of March 31, 1993, the total policyholders' surplus
and contingency reserves and the total unearned premium reserve, respectively,
of Financial Security and its consolidated subsidiaries were, in accordance
with generally accepted accounting principles, approximately $479,110,000
(unaudited) and $220,078,000 (unaudited), and the total shareholders' equity
and the total unearned premium reserve, respectively, of Financial Security
and its consolidated subsidiaries were, in accordance with generally accepted
accounting principles, approximately $628,119,000 (unaudited) and $202,493,000
(unaudited). Copies of Financial Security's financial statements may be
obtained by writing to Financial Security at 350 Park Avenue, New York, New
York, 10022, Attention: Communications Department. Its telephone number is
(212) 826-0100.
Pursuant to an intercompany agreement, liabilities on financial guaranty
insurance written by Financial Security or either of its subsidiaries are
reinsured among such companies on an agreed-upon percentage substantially
proportional to their respective capital, surplus and reserves, subject to
applicable statutory risk limitations. In addition, Financial Security
reinsures a portion of its liabilities under certain of its financial guaranty
insurance policies with unaffiliated reinsurers under various quota share
treaties and on a transaction-by-transaction basis. Such reinsurance is
utilized by Financial Security as a risk management device and to comply with
certain statutory and rating agency requirements; it does not alter or limit
Financial Security's obligations under any financial guaranty insurance policy.
Financial Security's claims-paying ability is rated "Aaa" by Moody's Investors
Service, Inc., and "AAA" by Standard & Poor's, Nippon Investors Service Inc.,
Duff & Phelps Inc. and Australian Ratings Pty. Ltd. Such ratings reflect only
the views of the respective rating agencies, are not recommendations to buy,
sell or hold securities and are subject to revision or withdrawal at any time
by such rating agencies.
Capital Guaranty Insurance Company ("Capital Guaranty") is a "Aaa/AAA" rated
monoline stock insurance company incorporated in the State of Maryland, and is
a wholly owned subsidiary of Capital Guaranty Corporation, a Maryland
insurance holding company. Capital Guaranty Corporation is a publicly owned
company whose shares are traded on the New York Stock Exchange.
Capital Guaranty is authorized to provide insurance in all 50 states, the
District of Columbia, the Commonwealth of Puerto Rico, Guam and the U.S.
Virgin Islands. Capital Guaranty focuses on insuring municipal securities and
our policies guaranty the timely payment of principal and interest when due
for payment on new issue and secondary market issue municipal bond
transactions. Capital Guaranty's claims-paying ability is rated "Triple-A" by
both Moody's and Standard & Poor's. Therefore, if Capital Guaranty insures an
issue with a stand alone rating of less than "Triple-A," such issue would be
"upgraded" to "Aaa/AAA" by virtue of Capital Guaranty's Insurance.
As of December 31, 1994, Capital Guaranty had more than $15.7 billion in net
exposure outstanding (excluding defeased issues). The total statutory
policyholders' surplus and contingency reserve of Capital Guaranty was
$196,529,000, and the total admitted assets were $303,723,316 as reported to
the Insurance Department of the State of Maryland as of December 31, 1994.
Financial statements for Capital Guaranty Insurance Company, that have been
prepared in accordance with statutory insurance accounting standards, are
available upon request. The address of Capital Guaranty's headquarters and its
telephone number are Steuart Tower, 22nd Floor, One Market Plaza, San
Francisco, CA 94105-1413 and (415) 995-8000.
CapMAC is a New York-domiciled monoline stock insurance company which engages
only in the business of financial guarantee and surety insurance. CapMAC is
licensed in 50 states in addition to the District of Columbia, the
Commonwealth of Puerto Rico and the territory of Guam. CapMAC insures
structured asset-backed, corporate, municipal and other financial obligations
in the U.S. and international capital markets. CapMAC also provides financial
guarantee reinsurance for structured asset-backed, corporate, municipal and
other financial obligations written by other major insurance companies.
CapMAC's claims-paying ability is rated "Aaa"by Moody's Investors Service,
Inc., "AAA" by Standard & Poor's, "AAA"by Duff & Phelps Credit Rating Co. and
"AAA" by Nippon Investors Service Inc. Such ratings reflect only the views of
the respective rating agencies, are not recommendations to buy, sell or hold
securities and are subject to revision or withdrawal at any time by such
rating agencies.
CapMAC is wholly owned by CapMAC Holdings Inc. ("Holdings"), a company that is
owned by a group of institutional and other investors, including CapMAC's
management and employees. Neither Holdings nor any of its stockholders is
obligated to pay any claims under any policy issued by CapMAC or any debts of
CapMAC or to make additional capital contributions.
CapMAC is regulated by the Superintendent of Insurance of the State of New
York. In addition, CapMAC is subject to regulation by the insurance
departments of the other jurisdictions in which it is licensed. Such insurance
laws regulate, among other things, the amount of net exposure per risk that
CapMAC may retain, capital transfers, dividends, investment of assets, changes
in control, transactions with affiliates and consolidations and acquisitions.
CapMAC is subject to periodic regulatory examinations by the same regulatory
authorities.
CapMAC's obligations under the Policy(s) may be reinsured. Such reinsurance
does not relieve CapMAC of any of its obligations under the Policy(s).
THE POLICY IS NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND
SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW.
As at December 31, 1994 and 1993, CapMAC had qualified statutory capital
(which consists of policyholders' surplus and contingency reserve) of
approximately $170 million and $168 million, respectively, and had not
incurred any debt obligations. Article 69 of the New York State Insurance Law
requires CapMAC to establish and maintain the contingency reserve, which is
available to cover claims under policies issued by CapMAC.
Copies of CapMAC's financial statements prepared in accordance with statutory
accounting standards, which differ from generally accepted accounting
principles, and filed with the Insurance Department of the State of New York
are available upon request. CapMAC is located at 885 Third Avenue, New York,
New York 10022, and its telephone number is (212) 755-1155.
In order to be in an Insured Trust, Bonds must be insured by one of the
Preinsured Bond Insurers or be eligible for the insurance being obtained by
such Trust. In determining eligibility for insurance, the Preinsured Bond
Insurers, AMBAC Indemnity and Financial Guaranty have applied their own
standards which correspond generally to the standards they normally use in
establishing the insurability of new issues of municipal bonds and which are
not necessarily the criteria used in the selection of Bonds by the Sponsor. To
the extent the standards of the Preinsured Bond Insurers, AMBAC Indemnity and
Financial Guaranty are more restrictive than those of the Sponsor, the
previously stated Trust investment criteria have been limited with respect to
the Bonds. This decision is made prior to the Date of Deposit, as debt
obligations not eligible for insurance are not deposited in an Insured Trust.
Thus, all of the Bonds in the portfolios of the Insured Trusts in the Fund are
insured either by the respective Trust or by the issuer of the Bonds, by a
prior owner of such Bonds or by the Sponsor prior to the deposit of such Bonds
in a Trust.
Because the Bonds are insured by one of the Portfolio Insurers or one of the
Preinsured Bond Insurers as to the timely payment of principal and interest,
when due, and on the basis of the various reinsurance agreements in effect,
Standard & Poor's has assigned to the Units of each Insured Trust its
"AAA" investment rating. See "Description of Securities Ratings". The obtaining
of this rating by an Insured Trust should not be construed as an approval of
the offering of the Units by Standard & Poor's or as a guarantee of the market
value of such Trust or of the Units.
On the date of this Prospectus, the Estimated Current Returns on the
Securities in the Colorado IM-IT Trust, Missouri IM-IT Trust, New Mexico IM-IT
Trust and Tennessee IM-IT Trust were 5.19%, 5.20%, 5.26% and 5.21%,
respectively, based on the monthly plan of distribution after payment of the
insurance premium or premiums payable by each Trust, while the Estimated
Long-Term Returns on such Trusts were 5.27%, 5.23%, 5.35% and 5.27%,
respectively. The Estimated Current Returns on identical portfolios without
the insurance obtained by the above mentioned Trusts would have been 5.22%,
5.21%, 5.31% and 5.24%, respectively, based on the monthly plan of
distribution on such date, while the Estimated Long-Term Returns on identical
portfolios without the insurance obtained by the above mentioned Trusts would
have been 5.30%, 5.24%, 5.40% and 5.30%, respectively.
An objective of portfolio insurance obtained by an Insured Trust is to obtain
a higher yield on the portfolio of such Trust than would be available if all
the Securities in such portfolio had Standard & Poor's "AAA" rating and yet at
the same time to have the protection of insurance of prompt payment of
interest and principal, when due, on the Bonds. There is, of course, no
certainty that this result will be achieved. Preinsured Bonds in an Insured
Trust (all of which are rated "AAA" by Standard & Poor's) may or may not have
a higher yield than uninsured bonds rated "AAA" by Standard & Poor's. In
selecting such Bonds for an Insured Trust, the Sponsor has applied the
criteria hereinbefore described.
In the event of nonpayment of interest or principal, when due, in respect of a
Bond, AMBAC Indemnity shall make such payment not later than 30 days and
Financial Guaranty shall make such payment within one business day after the
respective insurer has been notified that such nonpayment has occurred or is
threatened (but not earlier than the date such payment is due). The insurer,
as regards any payment it may make, will succeed to the rights of the Trustee
in respect thereof. All policies issued by the Portfolio Insurers and the
Preinsured Bond Insurers are substantially identical insofar as obligations to
an Insured Trust are concerned.
The Internal Revenue Service has issued a letter ruling which holds in effect
that insurance proceeds representing maturing interest on defaulted municipal
obligations paid to holders of insured bonds, under policy provisions
substantially identical to the policies described herein, will be excludable
from Federal gross income under Section 103(a)(1) of the Internal Revenue Code
to the same extent as if such payments were made by the issuer of the
municipal obligations. Holders of Units in an Insured Trust should discuss
with their tax advisers the degree of reliance which they may place on this
letter ruling. However, Chapman and Cutler, counsel for the Sponsor, has given
an opinion to the effect such payment of proceeds would be excludable from
Federal gross income if, and to the same extent as, such interest would have
been so excludable if paid by the issuer of the defaulted obligations. See
"Other Matters--Federal Tax Status".
Each Portfolio Insurer is subject to regulation by the department of insurance
in the state in which it is qualified to do business. Such regulation,
however, is no guarantee that each Portfolio Insurer will be able to perform
on its contract of insurance in the event a claim should be made thereunder at
some time in the future. At the date hereof, it is reported that no claims
have been submitted or are expected to be submitted to any of the Portfolio
Insurers which would materially impair the ability of any such company to meet
its commitment pursuant to any contract of bond or portfolio insurance.
The information relating to each Portfolio Insurer has been furnished by such
companies. The financial information with respect to each Portfolio Insurer
appears in reports filed with state insurance regulatory authorities and is
subject to audit and review by such authorities. No representation is made
herein as to the accuracy or adequacy of such information or as to the absence
of material adverse changes in such information subsequent to the dates
thereof.
The Bonds in the Insured Trusts are insured as follows:
<TABLE>
<CAPTION>
Bonds insured Bonds insured
under AMBAC under Financial
Trust Indemnity Guaranty Preinsured Total
portfolio insurance portfolio insurance Bonds
<S> <C> <C> <C> <C>
IM-IT.............. -- -- 100% 100%
Colorado IM-IT..... 28% -- 72% 100%
Missouri IM-IT..... 5% -- 95% 100%
New Mexico IM-IT... 45% -- 55% 100%
Tennessee IM-IT.... 27% -- 73% 100%
</TABLE>
The breakdown of the Preinsured Bonds is as follows: IM-IT--AMBAC Indemnity
19%, Capital Guaranty 15%, MBIA 59% and FSA 7%; Colorado IM-IT Trust--AMBAC
Indemnity 17% and MBIA 55%; Missouri IM-IT Trust--AMBAC Indemnity 15%,
Capital Guaranty 13%, Financial Guaranty 26% and MBIA 41%; New Mexico IM-IT
Trust--AMBAC Indemnity 31%, MBIA 19% and FSA 5%; Tennessee IM-IT Trust--AMBAC
Indemnity 18%, Financial Guaranty 25%, MBIA 17% and FSA 13%.
IM-IT
General. The IM-IT consists of 12 issues of Securities. None of the Bonds in
the IM-IT are general obligations of the governmental entities issuing them or
are backed by the taxing power thereof. All of the issues are payable from the
income of a specific project or authority and are not supported by the
issuer's power to levy taxes. These issues are located in 9 states or
territories, divided by purpose of issues (and percentage of principal amount
to total IM-IT) as follows: Public Building, 3 (24%); Health Care, 2 (18%);
Higher Education, 1 (11%); Industrial Revenue, 1 (11%); Multi-Family Mortgage
Revenue, 1 (11%); Airport, 1 (8%); General Purpose, 1 (8%); Water and Sewer, 1
(5%) and Certificates of Participation, 1 (4%). No Bond issue has received a
provisional rating. The dollar weighted average maturity of the Bonds in the
Trust is 27 years.
Tax Status. For a discussion of the Federal tax status of income earned on
IM-IT Trust Units, see "Other Matters--Federal Tax Status".
<TABLE>
<CAPTION>
Semi-
Monthly Annual
<S> <C> <C>
Per Unit Information:
Calculation of Estimated Net Annual Unit Income <F1>:
Estimated Annual Interest Income per Unit................................. $ 56.95 $ 56.95
Less: Estimated Annual Expense per Unit <F2>.............................. $ 2.05 $ 1.55
Less: Annual Premium on Portfolio Insurance per Unit...................... $ -- $ --
Estimated Net Annual Interest Income per Unit............................. $ 54.90 $ 55.40
Calculation of Estimated Interest Earnings per Unit:
Estimated Net Annual Interest Income per Unit............................. $ 54.90 $ 55.40
Divided by 12 and 2, respectively......................................... $ 4.58 $ 27.70
Estimated Daily Rate of Net Interest Accrual per Unit...................... $ .15247 $ .15387
Estimated Current Return Based on Public Offering Price <F1><F3><F4><F5>... 5.49% 5.54%
Estimated Long-Term Return <F3><F4><F5>.................................... 5.57% 5.62%
Estimated Initial Monthly Distribution (September 1995).................... $ 5.49
Estimated Initial Semi-annual Distribution (December 1995)................. $ 19.39
Estimated Normal Distribution per Unit <F5>................................ $ 4.58 $ 27.70
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Trustee's Annual Fee <F1>...... $.91 and $.51 per $1,000 principal amount of Bonds, respectively, for
those portions of the IM-IT Trust under the monthly and semi-annual
distribution plans
Record and Computation Dates... FIRST day of the month as follows: monthly--each month;
semi-annual--June and December
Distribution Dates............. FIFTEENTH day of the month as follows: monthly--each month;
semi-annual--June and December commencing September 15, 1995
<FN>
<F1>During the first year the Trustee will reduce its fee by approximately $.23
per Unit (which amount is the estimated interest to be earned per Unit prior
to the expected delivery dates for the "when, as and if issued" Bonds included
in this Trust). Should such estimated interest exceed such amount, the Trustee
will reduce its fee up to its annual fee. After the first year, the Trustee's
fee will be that amount indicated above. Estimated Annual Interest Income per
Unit will be increased to $57.18. Estimated Annual Expense per Unit (excluding
insurance) will be increased to $2.28 and $1.78 under the monthly and
semi-annual distribution plans, respectively; and Estimated Net Annual
Interest Income per Unit will remain the same as shown. See "Estimated Current
Returns and Estimated Long-Term Returns."
<F2>Excluding insurance costs. The Estimated Annual Expenses are expected to
fluctuate periodically (see "Trust Administration--Fund Administration and
Expenses--Miscellaneous Expenses").
<F3>The Estimated Current Returns and Estimated Long-Term Returns are increased
for transactions entitled to a reduced sales charge. See "Unitholder
Explanations--Public Offering--General".
<F4>The Estimated Current Returns are calculated by dividing the Estimated Net
Annual Interest Income per Unit by the Public Offering Price. The Estimated
Net Annual Interest Income per Unit will vary with changes in fees and
expenses of the Trustee and the Evaluator and with the principal prepayment,
redemption, maturity, exchange or sale of Securities while the Public Offering
Price will vary with changes in the offering price of the underlying
Securities; therefore, there is no assurance that the present Estimated
Current Returns indicated above will be realized in the future. The Estimated
Long-Term Returns are calculated using a formula which (1) takes into
consideration, and determines and factors in the relative weightings of, the
market values, yields (which takes into account the amortization of premiums
and the accretion of discounts) and estimated retirements of all of the
Securities in the Trust and (2) takes into account the expenses and sales
charge associated with each Trust Unit. Since the market values and estimated
retirements of the Securities and the expenses of the Trust will change, there
is no assurance that the present Estimated Long-Term Returns as indicated
above will be realized in the future. The Estimated Current Returns and
Estimated Long-Term Returns are expected to differ because the calculation of
the Estimated Long-Term Return reflects the estimated date and amount of
principal returned while the Estimated Current Return calculation includes
only net annual interest income and Public Offering Price.
<F5>These figures are based on estimated per Unit cash flows. Estimated cash flows
will vary with changes in fees and expenses, with changes in current interest
rates and with the principal prepayment, redemption, maturity, call, exchange
or sale of the underlying Securities. The estimated cash flows for this Series
are set forth under "Estimated Cash Flows to Unitholders".
</TABLE>
<TABLE>
INSURED MUNICIPALS INCOME TRUST
SERIES 353 (181ST INSURED MULTI-SERIES)
PORTFOLIO As of July 20, 1995
<CAPTION>
Offering
Aggregate Name of Issuer, Title, Interest Rate andMaturity Date of Redemption Price To
Principal<F1> either Bonds Deposited orBonds Contracted for<F1><F5> Rating<F2> Feature<F3> IM-IT<F4>
<S> <C> <C> <C> <C>
$ 1,000,000 Delta Correctional Facilities Authority, Mississippi,
Mortgage Revenue Bonds, Series 1995 (Capital Guaranty 2005 @ 102
Insured) #5.80% Due 7/1/2015................................ YAAA 2010 @ 100 S.F. $ 976,220
1,000,000 Indiana State Office Building Commission, Correctional
Facilities Program, Revenue Bonds, Series 1995A (AMBAC 2005 @ 102
Indemnity Insured) #5.50% Due 7/1/2020....................... YAAA 2017 @ 100 S.F. 922,600
1,000,000 Wisconsin Health and Educational Facilities Authority,
Health Facilities Revenue Bonds (SSM Health Care Projects) 2005 @ 102
Series 1995A (MBIA Insured) # 5.875% Due 6/1/2020........... YAAA 2013 @ 100 S.F. 963,980
600,000 San Mateo County Joint Powers Financing Authority
(California) Lease Revenue Bonds (San Mateo County Health 2004 @ 102
Center) Series 1994A (FSA Insured) #5.75% Due 7/15/2022..... AAA 2015 @ 100 S.F. 567,822
750,000 New Mexico Finance Authority, Public Project Revolving Fund
Revenue Bonds, Series 1995A (AMBAC Indemnity Insured) 2005 @ 100
#6.00% Due 6/1/2023.......................................... YAAA 2016 @ 100 S.F. 749,063
1,000,000 Illinois Development Finance Authority, Pollution Control
Revenue Refunding Bonds (Illinois Power Company Project)
Series 1994A (MBIA Insured) #5.70% Due 2/1/2024............. AAA 2004 @ 102 939,730
175,000 Metropolitan Pier and Exposition Authority, Illinois,
Dedicated State Tax Revenue Refunding (McCormick Place
Exposition Project) Series B (MBIA Insured) #0.00% Due
6/15/2024.................................................... AAA 28,540 <F6>
400,000 California Statewide Communities Development Authority,
Certificates of Participation, Sutter Health Obligated Group 2005 @ 102
(MBIA Insured) #6.00% Due 8/15/2025......................... YAAA 2023 @ 100 S.F. 392,200
1,000,000 La Quinta Redevelopment Agency (Riverside County,
California) Redevelopment Project Areas Nos. 1 and 2,
Housing Tax Allocation Bonds, Series 1995 (MBIA Insured)** 2005 @ 102
#6.00% Due 9/1/2025.......................................... YAAA 2011 @ 100 S.F. 984,470
750,000 City and County of Denver, Colorado, Airport System Revenue 2005 @ 102
Bonds, Series 1995A (MBIA Insured) #5.70% Due 11/15/2025.... YAAA 2021 @ 100 S.F. 709,988
400,000 Coastal Water Authority, Texas, Contract Revenue Bonds (City
of Houston Project) Series 1995 (Capital Guaranty Insured) 2005 @ 100
#5.95% Due 12/15/2025........................................ YAAA 2021 @ 100 S.F. 389,420
1,000,000 Board of Trustees of Oakland University, Michigan, General
Revenue Bonds, Series 1995 (MBIA Insured) #5.75% Due 2005 @ 102
5/15/2026.................................................... YAAA 2016 @ 100 S.F. 963,540
$ 9,075,000 $ 8,587,573
</TABLE>
All of the Bonds in the portfolio are insured by one of the Preinsured Bond
Insurers. See "Unitholder Explanations--Insurance on the Bonds in the Insured
Trusts".
For an explanation of the footnotes used on this page, see "Notes to
Portfolios".
COLORADO IM-IT TRUST
General. The Colorado IM-IT Trust consists of 8 issues of Securities. Two of
the Bonds in the Colorado IM-IT Trust are general obligations of the
governmental entities issuing them and are backed by the taxing power thereof.
The remaining issues are payable from the income of a specific project or
authority and are not supported by the issuer's power to levy taxes. These
issues are divided by purpose of issues (and percentage of principal amount to
total Colorado IM-IT Trust) as follows: General Obligations, 2 (22%);
Multi-Family Mortgage Revenue, 1 (20%); Water and Sewer, 2 (20%); Retail
Electric/Gas, 1 (17%); Airport, 1 (13%) and Higher Education, 1 (8%). No Bond
issue has received a provisional rating.
Risk Factors. The State Constitution requires that expenditures for any fiscal
year not exceed revenues for such fiscal year. By statute, the amount of
General Fund revenues available for appropriation is based upon revenue
estimates which, together with other available resources, must exceed annual
appropriations by the amount of the unappropriated reserve (the
"Unappropriated Reserve"). The Unappropriated Reserve requirement for fiscal
year 1991, 1992 and 1993 was set at 3% of total appropriations from the
General Fund. For fiscal years 1994 and thereafter, the Unappropriated Reserve
requirement is set at 4%. In addition to the Unappropriated Reserve, a
constitutional amendment approved by Colorado voters in 1992 requires the
State and each local government to reserve a certain percentage of its fiscal
year spending (excluding bonded debt service) for emergency use (the
"Emergency Reserve"). The minimum Emergency Reserve is set at 2% for 1994 and
3% for 1995 and later years. For fiscal year 1992 and thereafter, General Fund
appropriations are also limited by statute to an amount equal to the cost of
performing certain required reappraisals of taxable property plus an amount
equal to the lesser of (i) five percent of Colorado personal income or (ii)
106% of the total General Fund appropriations for the previous fiscal year.
This restriction does not apply to any General Fund appropriations which are
required as a result of a new federal law, a final state or federal court
order or moneys derived from the increase in the rate or amount of any tax or
fee approved by a majority of the registered electors of the State voting at
any general election. In addition, the statutory limit on the level of General
Fund appropriations may be exceeded for a given fiscal year upon the
declaration of a State fiscal emergency by the State General Assembly.
The 1993 fiscal General Fund balance was $326.8 million, which was $196.9
million over the combined Unappropriated Reserve and Emergency Reserve
requirement. The 1994 fiscal year ending General Fund balance (exclusive of
$39.0 million allocated to Emergency Reserve) was $320.4 million, or $188.6
million over the required Unappropriated Reserve. Based on December 20, 1994
estimates, the 1995 fiscal year ending General Fund balance (exclusive of
$74.1 million allocated to Emergency Reserve) is expected to be $276.8
million, or $135.1 million over the required Unappropriated Reserve.
On November 3, 1992, voters in Colorado approved a constitutional amendment
(the "Amendment") which, in general, became effective December 31, 1992, and
which could restrict the ability of the State and local governments to
increase revenues and impose taxes. The Amendment applies to the State and all
local governments, including home rule entities ("Districts"). Enterprises,
defined as government-owned businesses authorized to issue revenue bonds and
receiving under 10% of annual revenue in grants from all Colorado state and
local governments combined, are excluded from the provisions of the Amendment.
The provisions of the Amendment are unclear and have required judicial
interpretation. Among other provisions, beginning November 4, 1992, the
Amendment requires voter approval prior to tax increases, creation of debt, or
mill levy or valuation for assessment ratio increases. The Amendment also
limits increases in government spending and property tax revenues to specified
percentages. The Amendment requires that District property tax revenues yield
no more than the prior year's revenues adjusted for inflation, voter approved
changes and (except with regard to school districts) local growth in property
values according to a formula set forth in the Amendment. School districts are
allowed to adjust tax levies for changes in student enrollment. Pursuant to
the Amendment, local government spending is to be limited by the same formula
as the limitation for property tax revenues. The Amendment limits increases in
expenditures from the State General Fund and program revenues (cash funds) to
the growth in inflation plus the percentage change in State population in the
prior calendar year. The basis for initial spending and revenue limits are
fiscal year 1992 spending and 1991 property taxes collected in 1992. The basis
for spending and revenue limits for fiscal year 1994 and later years will be
the prior fiscal year's spending and property taxes collected in the prior
calendar year. Debt service changes, reductions and voter-approved revenue
changes are excluded from the calculation basis. The Amendment also prohibits
new or increased real property transfer tax rates, new State real property
taxes and local District income taxes.
Litigation concerning several issues relating to the Amendment has been
brought in the Colorado courts. The litigation deals with three principal
issues: (i) whether Districts can increase mill levies to pay debt service on
general obligation bonds without obtaining voter approval; (ii) whether a
multi-year lease purchase agreement subject to annual appropriations is an
obligation which requires voter approval prior to execution of the agreement;
and (iii) what constitutes an "enterprise" which is excluded from the
provisions of the Amendment. In September, 1994, the Colorado Supreme Court
held that Districts can increase mill levies to pay levies to pay debt service
on general obligation bonds issued after the effective date of the Amendment;
litigation regarding mill levy increases to pay general obligation bonds
issued prior to the Amendment is still pending. In late 1994, the Colorado
Court of Appeals held that multi-year lease-purchase agreements subject to
annual appropriation do not require voter approval. The time to file an appeal
in that case has expired. An appeal of the primary case addressing the
remaining issue has been heard by the Colorado Supreme Court; an opinion is
expected by mid-1995. The outcome of that appeal cannot be predicted at this
time.
According to the Colorado Economic Perspective, Fourth Quarter, FY 1994-95,
December 20, 1994 (the "Economic Report"), inflation for 1993 was 4.2% and
population grew at the rate of 2.9% in Colorado. Accordingly, under the
Amendment, increases in State expenditures during the 1995 fiscal year will be
limited to 7.1% over expenditures during the 1994 fiscal year. The 1994 fiscal
year is the base year for calculating the limitation for the 1995 fiscal year.
The limitation for the 1996 fiscal year is projected to be 6.9%, based on
projected inflation of 4.4% for 1994 and projected population growth of 2.5%
during 1994. For the 1994 fiscal year, General Fund revenues totalled $3,596.1
million and program revenues (cash funds) totalled $1,659.8 million, resulting
in total estimated base revenues of $5,629.1 million. Expenditures for the
1995 fiscal year, therefore, cannot exceed $5,629.1 million. However, the 1995
fiscal year General Fund and program revenues (cash funds) are projected to be
only $5,536.3 million, or $92.8 million less than expenditures allowed under
the spending limitation.
There is also a statutory restriction on the amount of annual increases in
taxes that the various taxing jurisdictions in Colorado can levy without
electoral approval. This restriction does not apply to taxes levied to pay
general obligation debt.
As the State experienced revenue shortfalls in the mid-1980s, it adopted
various measures, including impoundment of funds by the Governor, reduction of
appropriations by the General Assembly, a temporary increase in the sales tax,
deferral of certain tax reductions and inter-fund borrowings. On a GAAP basis,
the State had unrestricted General Fund balances at June 30 of approximately
$134.4 million in fiscal year 1989, $116.6 million in fiscal year 1990, $16.3
million in fiscal year 1991, $133.3 million in fiscal year 1992, $326.6
million in fiscal year 1993 and $320.4 million in fiscal year 1994. The fiscal
year 1995 unrestricted General Fund is currently projected to be $276.8
million.
For fiscal year 1994, the following tax categories generated the following
respective revenue percentages of the State's $3,596.1 million total gross
receipts: individual income taxes represented 53.4% of gross fiscal year 1994
receipts; sales, use and excise taxes represented 31.2% of gross fiscal year
1994 receipts; and corporate income taxes represented 4.1% of gross fiscal
year 1994 receipts. The final budget for fiscal year 1995 projects general
fund revenues of approximately $3,797.2 million and appropriations of
approximately $3,542.1 million. The percentages of general fund revenue
generated by type of tax for fiscal year 1995 are not expected to be
significantly different from fiscal year 1994 percentages.
Under its constitution, the State of Colorado is not permitted to issue
general obligation bonds secured by the full faith and credit of the State.
However, certain agencies and instrumentalities of the State are authorized to
issue bonds secured by revenues from specific projects and activities. The
State enters into certain lease transactions which are subject to annual
renewal at the option of the State. In addition, the State is authorized to
issue short-term revenue anticipation notes. Local governmental units in the
State are also authorized to incur indebtedness. The major source of financing
for such local government indebtedness is an ad valorem property tax. In
addition, in order to finance public projects, local governments in the State
can issue revenue bonds payable from the revenues of a utility or enterprise
or from the proceeds of an excise tax, or assessment bonds payable from
special assessments. Colorado local governments can also finance public
projects through leases which are subject to annual appropriation at the
option of the local government. Local governments in Colorado also issue tax
anticipation notes. The Amendment requires prior voter approval for the
creation of any multiple fiscal year debt or other financial obligation
whatsoever, except for refundings at a lower rate or obligations of an
enterprise.
Based on data published by the State of Colorado, Office of State Planning and
Budgeting as presented in the Economic Report, over 50% of non-agricultural
employment in Colorado in 1994 was concentrated in the retail and wholesale
trade and service sectors, reflecting the importance of tourism to the State's
economy and of Denver as a regional economic and transportation hub. The
government and manufacturing sectors followed as the fourth and fifth largest
employment sectors in the State, representing approximately 17.5% and 11%,
respectively, of non-agricultural employment in the State in 1994. The Office
of Planning and Budgeting projects similar concentrations for 1995 and 1996.
According to the Economic Report, the unemployment rate improved slightly from
an average of 5.2% during 1993 to 4.9% during 1994. Total retail sales
increased by 11.3% during 1994. Colorado continued to surpass the job growth
rate of the U.S. with a 3.5% rate of growth projected for Colorado in 1994, as
compared with 2.6% for the nation as a whole. However, the rate of job growth
in Colorado is expected to decline in 1995, primarily due to the completion in
1994 of large public works projects such as Denver International Airport,
Coors Baseball Field, the Denver public Library renovation project, the
closure of Lowry Air Force Base and cutbacks at Rocky Flats.
Personal income rose 7.4% in Colorado during 1993 and 7.1% in 1992. During
1994, personal income rose 6.7% in Colorado, as compared with 5.9% for the
nation as a whole.
Economic conditions in the State may have continuing effects on other
governmental units within the State (including issuers of the Bonds in the
Colorado IM-IT Trust), which, to varying degrees, have also experienced
reduced revenues as a result of recessionary conditions and other factors.
Tax Status. For a discussion of the Federal tax status of income earned on
Colorado IM-IT Trust Units, see "Other Matters--Federal Tax Status".
Neither the Sponsor nor its counsel have independently examined the Bonds to
be deposited in and held in the Trust. However, although Chapman and Cutler
expresses no opinion with respect to the issuance of the Bonds, in rendering
its opinion expressed herein, it has assumed that: (i) the Bonds were validly
issued, (ii) the interest thereon is excludable from gross income for federal
income tax purposes, and (iii) interest on the Bonds, if received directly by
a Unitholder, would be exempt from the income tax imposed by the State that is
applicable to individuals and corporations (the "State Income Tax"). This
opinion does not address the taxation of persons other than full time
residents of Colorado.
In the opinion of Chapman and Cutler, counsel to the Sponsor, under existing
Colorado law:
Because Colorado income tax law is based upon the Federal law, the Colorado
IM-IT Trust is not an association taxable as a corporation for purposes of
Colorado income taxation.
With respect to Colorado Unitholders, in view of the relationship between
Federal and Colorado tax computations described above:
Each Colorado Unitholder will be treated as owning a pro rata share of each
asset of the Colorado IM-IT Trust for Colorado income tax purposes in the
proportion that the number of Units of such Trust held by the Unitholder bears
to the total number of outstanding Units of the Colorado IM-IT Trust, and the
income of the Colorado IM-IT Trust will therefore be treated as the income of
each Colorado Unitholder under Colorado law in the proportion described;
Interest on Bonds that would not be includable in income for Colorado income
tax purposes when paid directly to a Colorado Unitholder will be exempt from
Colorado income taxation when received by the Colorado IM-IT Trust and
attributed to such Colorado Unitholder and when distributed to such Colorado
Unitholder;
Any proceeds paid under an insurance policy or policies issued to the Colorado
IM-IT Trust with respect to the Bonds in the Colorado IM-IT Trust which
represent maturing interest on defaulted obligations held by the Trustee will
be excludable from Colorado adjusted gross income if, and to the same extent
as, such interest would have been so excludable if paid in the normal course
by the issuer of the defaulted obligations;
Any proceeds paid under individual policies obtained by issuers of Bonds in
the Colorado IM-IT Trust which represent maturing interest on defaulted
obligations held by the Trustee will not be includable in income for Colorado
income tax purposes if, and to the same extent as, such interest would not
have been so includable if paid in the normal course by the issuer of the
defaulted obligations;
Each Colorado Unitholder will realize taxable gain or loss when the Colorado
IM-IT Trust disposes of a Bond (whether by sale, exchange, redemption, or
payment at maturity) or when the Colorado Unitholder redeems or sells Units at
a price that differs from original cost as adjusted for amortization of bond
discount or premium and other basis adjustments (including any basis reduction
that may be required to reflect a Colorado Unitholder's share of interest, if
any, accruing on Bonds during the interval between the Colorado Unitholder's
settlement date and the date such Bonds are delivered to the Colorado IM-IT
Trust, if later);
Tax cost reduction requirements relating to amortization of bond premium may,
under some circumstances, result in Colorado Unitholders realizing taxable
gain when their Units are sold or redeemed for an amount equal to or less than
their original cost; and
If interest on indebtedness incurred or continued by a Colorado Unitholder to
purchase Units in the Colorado IM-IT Trust is not deductible for federal
income tax purposes, it also will be non-deductible for Colorado income tax
purposes.
Unitholders should be aware that all tax-exempt interest, including their
share of interest on the Bonds paid to the Colorado IM-IT Trust, is taken into
account for purposes of determining eligibility for the Colorado Property Tax/
Rent/Heat Rebate.
<TABLE>
<CAPTION>
Semi-
Monthly Annual
<S> <C> <C>
Per Unit Information:
Calculation of Estimated Net Annual Unit Income:
Estimated Annual Interest Income per Unit............................. $ 54.56 $ 54.56
Less: Estimated Annual Expense per Unit <F1>.......................... $ 2.38 $ 1.94
Less: Annual Premium on Portfolio Insurance per Unit.................. $ .28 $ .28
Estimated Net Annual Interest Income per Unit......................... $ 51.90 $ 52.34
Calculation of Estimated Interest Earnings per Unit:
Estimated Net Annual Interest Income per Unit......................... $ 51.90 $ 52.34
Divided by 12 and 2, respectively..................................... $ 4.33 $ 26.17
Estimated Daily Rate of Net Interest Accrual per Unit.................. $ .14416 $ .14537
Estimated Current Return Based on Public Offering Price <F2><F3><F4>... 5.19% 5.23%
Estimated Long-Term Return <F2><F3><F4>................................ 5.27% 5.32%
Estimated Initial Monthly Distribution (September 1995)................ $ 5.19
Estimated Initial Semi-annual Distribution (January 1996).............. $ 22.68
Estimated Normal Distribution per Unit <F4>............................ $ 4.33 $ 26.17
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Trustee's Annual Fee........... $.91 and $.51 per $1,000 principal amount of Bonds, respectively,
for those portions of the Colorado IM-IT Trust under the monthly
and semi-annual distribution plans
Record and Computation Dates... FIRST day of the month as follows: monthly--each month;
semi-annual--January and July
Distribution Dates............. FIFTEENTH day of the month as follows: monthly--each month;
semi-annual--January and July commencing September 15, 1995
<FN>
<F1>Excluding insurance costs. The Estimated Annual Expenses are expected to
fluctuate periodically (see "Trust Administration--Fund Administration and
Expenses--Miscellaneous Expenses").
<F2>The Estimated Current Returns and Estimated Long-Term Returns are increased
for transactions entitled to a reduced sales charge. See "Unitholder
Explanations--Public Offering--General".
<F3>The Estimated Current Returns are calculated by dividing the Estimated Net
Annual Interest Income per Unit by the Public Offering Price. The Estimated
Net Annual Interest Income per Unit will vary with changes in fees and
expenses of the Trustee and the Evaluator and with the principal prepayment,
redemption, maturity, exchange or sale of Securities while the Public Offering
Price will vary with changes in the offering price of the underlying
Securities; therefore, there is no assurance that the present Estimated
Current Returns indicated above will be realized in the future. The Estimated
Long-Term Returns are calculated using a formula which (1) takes into
consideration, and determines and factors in the relative weightings of, the
market values, yields (which takes into account the amortization of premiums
and the accretion of discounts) and estimated retirements of all of the
Securities in the Trust and (2) takes into account the expenses and sales
charge associated with each Trust Unit. Since the market values and estimated
retirements of the Securities and the expenses of the Trust will change, there
is no assurance that the present Estimated Long-Term Returns as indicated
above will be realized in the future. The Estimated Current Returns and
Estimated Long-Term Returns are expected to differ because the calculation of
the Estimated Long-Term Return reflects the estimated date and amount of
principal returned while the Estimated Current Return calculation includes
only net annual interest income and Public Offering Price.
<F4>These figures are based on estimated per Unit cash flows. Estimated cash flows
will vary with changes in fees and expenses, with changes in current interest
rates and with the principal prepayment, redemption, maturity, call, exchange
or sale of the underlying Securities. The estimated cash flows for this Series
are set forth under "Estimated Cash Flows to Unitholders".
</TABLE>
<TABLE>
COLORADO INSURED MUNICIPALS INCOME TRUST
SERIES 75 (181ST INSURED MULTI-SERIES)
PORTFOLIO As of July 20, 1995
<CAPTION>
Offering
Price To
Colorado
Aggregate Name of Issuer, Title, Interest Rate andMaturity Date of Redemption IM-IT
Principal<F1> either Bonds Deposited orBonds Contracted for<F1><F5> Rating<F2> Feature<F3> Trust<F4>
<S> <C> <C> <C> <C>
$ 300,000 School District No. R-1, San Miguel County, Colorado,
General Obligation Refunding Bonds, Series 1995 (MBIA 2005 @ 101
Insured) #5.50% Due 12/1/2012 ............................ YAAA 2010 @ 100 S.F. $ 294,918
250,000 Colorado Colleges, Board of Trustees Auxiliary Facilities
System, Enterprise Revenue Bonds (Western State College of 2004 @ 101
Colorado) Series 1994C (MBIA Insured) #5.625% Due 5/15/2015. AAA 2010 @ 100 S.F. 247,558
100,000 City of Thornton, Colorado, Sewer Revenue Refunding Bonds, 2005 @ 100
Series 1995 (MBIA Insured) 5.875% Due 5/15/2015............. AAA 2011 @ 100 S.F. 101,217
350,000 El Paso County School District No.12, Cheyenne Mountain, El
Paso County, Colorado, General Obligation Improvement Bonds, 2005 @ 100
Series 1995 #5.65% Due 9/15/2015............................ N/R 2009 @ 100 S.F. 345,530
500,000 Municipal Subdistrict, Northern Colorado, Water Conservancy
District, Water Revenue Refunding Bonds, Series 1993E (AMBAC 2004 @ 100
Indemnity Insured) #5.00% Due 12/1/2017..................... AAA 2011 @ 100 S.F. 452,710
500,000 Colorado Springs, Colorado, Utilities System Improvement and 2004 @ 100
Refunding Revenue Bonds, Series 1994A #5.125% Due 11/15/2023 AA 2020 @ 100 S.F. 446,310
400,000 City and County of Denver, Colorado, Airport System Revenue 2005 @ 102
Bonds, Series 1995A (MBIA Insured) #5.70% Due 11/15/2025.... YAAA 2021 @ 100 S.F. 385,292
600,000 Colorado Housing and Finance Authority, Multi-Family Housing
Insured Mortgage Revenue Bonds, Series 1993A (MBIA Insured) 2003 @ 102
5.90% Due 10/1/2029......................................... AAA 2004 @ 100 S.F. 603,252
$ 3,000,000 $ 2,876,787
</TABLE>
All of the Bonds in the portfolio are insured either by one of the Preinsured
Bond Insurers (as indicated in the Bond name) or under the portfolio insurance
policy obtained by the Trust from AMBAC Indemnity. See "Unitholder
Explanations--Insurance on the Bonds in the Insured Trusts".
For an explanation of the footnotes used on this page, see "Notes to
Portfolios".
MISSOURI IM-IT TRUST
General. The Missouri IM-IT Trust consists of 8 issues of Securities. None of
the Bonds in the Missouri IM-IT Trust are general obligations of the
governmental entities issuing them or are backed by the taxing power thereof.
All of the issues are payable from the income of a specific project or
authority and are not supported by the issuer's power to levy taxes. These
issues are divided by purpose of issues (and percentage of principal amount to
total Missouri IM-IT Trust) as follows: Higher Education, 3 (33%); Health
Care, 2 (28%); Industrial Revenue, 1 (13%); Public Building, 1 (13%) and Water
and Sewer, 1 (13%). No Bond issue has received a provisional rating.
Risk Factors. The following discussion regarding constitutional limitations
and the economy of the State of Missouri is included for the purpose of
providing general information that may or may not affect issuers of the Bonds
in Missouri.
In November 1981, the voters of Missouri adopted a tax limitation amendment to
the constitution of the State of Missouri (the "Amendment"). The Amendment
prohibits increases in local taxes, licenses, or fees by political
subdivisions without approval of the voters of such political subdivision. The
Amendment also limits the growth in revenues and expenditures of the State to
the rate of growth in the total personal income of the citizens of Missouri.
The limitation may be exceeded if the General Assembly declares an emergency
by a two-thirds vote.
Although the June 1993 revenue estimate had been revised downward by $27.5
million, the State budget for Fiscal Year 1993 remained balanced due primarily
to delayed spending for desegregation capital projects. The downward revision
in revenues was considered necessary because of weak economic performance, and
more importantly an economic outlook for the second half of Fiscal Year 1993
which projected slower growth than was anticipated in June 1992.
For Fiscal Year 1994, the majority of revenues for the State of Missouri will
be obtained from individual income taxes (53.1%), sales and use taxes (30.0%),
corporate income taxes (5.9%) and county foreign insurance taxes (3.0%). Major
expenditures for Fiscal Year 1994 include elementary and secondary education
(30.6%), human services (25.4%), higher education (14.8%) and desegregation
(8.9%).
The Fiscal Year 1994 budget balances resources and obligations based on the
consensus revenue and refund estimate and an opening balance resulting from
continued withholdings and delayed spending for desegregation capital
projects. The total general revenue operating budget for Fiscal Year 1994
exclusive of desegregation is $3,844.6 million. The court-ordered
desegregation estimate in $377.7 million, an increase of $30.7 million over
the revised Fiscal Year 1993 estimate.
The economy of Missouri is diverse and includes manufacturing, retail and
wholesale trade, services, agriculture, tourism and mining. In recent years,
growth in the wholesale and retail trade had offset the more slowly growing
manufacturing and agricultural sectors of the economy. According to the United
States Bureau of Labor Statistics, the 1992 unemployment rate in Missouri was
5.7% and the 1993 rate was 6.4%. Although not strictly comparable, the
preliminary seasonally adjusted rate for May of 1994 was 5.0%. There can be no
assurance that the general economic conditions or the financial circumstances
of Missouri or its political subdivisions will not adversely affect the market
value of the Bonds or the ability of the obligor to pay debt service on such
Bonds.
Currently, Moody's Investors Service rates Missouri general obligation bonds
"Aaa" and Standard & Poor's rates Missouri general obligation bonds "AAA".
Although these ratings indicate that the State of Missouri is in relatively
good economic health, there can be, of course, no assurance that this will
continue or that particular bond issues may not be adversely affected by
changes in the State or local economic or political conditions.
The foregoing information constitutes only a brief summary of some of the
general factors which may impact certain issuers of Bonds and does not purport
to be a complete or exhaustive description of all adverse conditions to which
the issuers of obligations held by the Missouri IM-IT Trust are subject.
Additionally, many factors including national economic, social and
environmental policies and conditions, which are not within the control of the
issuers of the Bonds, could affect or could have an adverse impact on the
financial condition of the State and various agencies and political
subdivisions located in the State. The Sponsor is unable to predict whether or
to what extent such factors or other factors may affect the issuers of the
Bonds, the market value or marketability of the Bonds or the ability of the
respective issuers of the Bonds acquired by the Missouri IM-IT Trust to pay
interest on or principal of the Bonds.
Tax Status. For a discussion of the Federal tax status of income earned on
Missouri IM-IT Trust Units, see "Other Matters--Federal Tax Status".
The assets of the Missouri IM-IT Trust will consist of debt obligations issued
by or on behalf of the State of Missouri (the "State") or counties,
municipalities, authorities or political subdivisions thereof (the "Missouri
Bonds") or by the Commonwealth of Puerto Rico, Guam and the United States
Virgin Islands (the "Possession Bonds") (collectively, the "Bonds").
Neither the Sponsor nor its counsel have independently examined the Bonds to
be deposited in and held in the Missouri IM-IT Trust. However, although no
opinion is expressed herein regarding such matters, it is assumed that: (i)
the Bonds were validly issued, (ii) the interest thereon is excludable from
gross income for Federal income tax purposes and (iii) interest on the
Missouri Bonds, if received directly by a Unitholder, would be exempt from the
Missouri income tax applicable to individuals and corporations ("Missouri
state income tax"). The opinion set forth below does not address the taxation
of persons other than full time residents of Missouri.
In the opinion of Chapman and Cutler, counsel to the Sponsor under existing
law:
(1)The Missouri IM-IT Trust is not an association taxable as a corporation for
Missouri income tax purposes, and each Unitholder of the Missouri IM-IT Trust
will be treated as the owner of a pro rata portion of the Missouri IM-IT Trust
and the income of such portion of the Missouri IM-IT Trust will be treated as
the income of the Unitholder for Missouri state income tax purposes.
(2)Interest paid and original issue discount, if any, on the Bonds which would
be exempt from the Missouri state income tax if received directly by a
Unitholder will be exempt from the Missouri state income tax when received by
the Missouri IM-IT Trust and distributed to such Unitholder; however, no
opinion is expressed herein regarding taxation of interest paid and original
issue discount, if any, on the Bonds received by the Missouri IM-IT Trust and
distributed to Unitholders under any other tax imposed pursuant to Missouri
law, including but not limited to the franchise tax imposed on financial
institutions pursuant to Chapter 148 of the Missouri Statutes.
(3)To the extent that interest paid and original issue discount, if any,
derived from the Missouri IM-IT Trust by a Unitholder with respect to
Possession Bonds is excludable from gross income for Federal income tax
purposes pursuant to 48 U.S.C. Section 745, 48 U.S.C. Section 1423a, and 48
U.S.C. Section 1403, such interest paid and original issue discount, if any,
will not be subject to the Missouri state income tax; however, no opinion is
expressed herein regarding taxation of interest paid and original issue
discount, if any, on the Bonds received by the Missouri IM-IT Trust and
distributed to Unitholders under any other tax imposed pursuant to Missouri
law, including but not limited to the franchise tax imposed on financial
institutions pursuant to Chapter 148 of the Missouri Statutes.
(4)Each Unitholder of the Missouri IM-IT Trust will recognize gain or loss for
Missouri state income tax purposes if the Trustee disposes of a bond (whether
by redemption, sale, or otherwise) or if the Unitholder redeems or sells Units
of the Missouri IM-IT Trust to the extent that such a transaction results in a
recognized gain or loss to such Unitholder for Federal income tax purposes.
Due to the amortization of bond premium and other basis adjustments required
by the Internal Revenue Code, a Unitholder under some circumstances, may
realize taxable gain when his or her Units are sold or redeemed for an amount
equal to their original cost.
(5)Any insurance proceeds paid under policies which represent maturing
interest on defaulted obligations which are excludable from gross income for
Federal income tax purposes will be excludable from the Missouri state income
tax to the same extent as such interest would have been paid by the issuer of
such Bonds held by the Missouri IM-IT Trust; however, no opinion is expressed
herein regarding taxation of interest paid and original issue discount, if
any, on the Bonds received by the Missouri IM-IT Trust and distributed to
Unitholders under any other tax imposed pursuant to Missouri law, including
but not limited to the franchise tax imposed on financial institutions
pursuant to Chapter 148 of the Missouri Statutes.
(6)The Missouri state income tax does not permit a deduction of interest paid
or incurred on indebtedness incurred or continued to purchase or carry Units
in the Trust, the interest on which is exempt from such Tax.
(7)The Missouri IM-IT Trust will not be subject to the Kansas City, Missouri
Earnings and Profits Tax and each Unitholder's share of income of the Bonds
held by the Missouri IM-IT Trust will not generally be subject to the Kansas
City, Missouri Earnings and Profits Tax or the City of St. Louis Earnings Tax
(except in the case of certain Unitholders, including corporations, otherwise
subject to the St. Louis City Earnings Tax).
<TABLE>
<CAPTION>
Semi-
Monthly Annual
<S> <C> <C>
Per Unit Information:
Calculation of Estimated Net Annual Unit Income:
Estimated Annual Interest Income per Unit............................. $ 54.38 $ 54.38
Less: Estimated Annual Expense per Unit <F1>.......................... $ 2.30 $ 1.89
Less: Annual Premium on Portfolio Insurance per Unit.................. $ .06 $ .06
Estimated Net Annual Interest Income per Unit......................... $ 52.02 $ 52.43
Calculation of Estimated Interest Earnings per Unit:
Estimated Net Annual Interest Income per Unit......................... $ 52.02 $ 52.43
Divided by 12 and 2, respectively..................................... $ 4.34 $ 26.22
Estimated Daily Rate of Net Interest Accrual per Unit.................. $ .14450 $ .14564
Estimated Current Return Based on Public Offering Price <F2><F3><F4>... 5.20% 5.24%
Estimated Long-Term Return <F2><F3><F4>................................ 5.23% 5.27%
Estimated Initial Monthly Distribution (September 1995)................ $ 5.20
Estimated Initial Semi-annual Distribution (January 1996).............. $ 22.71
Estimated Normal Distribution per Unit <F4>............................ $ 4.34 $ 26.22
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Trustee's Annual Fee........... $.91 and $.51 per $1,000 principal amount of Bonds, respectively,
for those portions of the Missouri IM-IT Trust under the monthly
and semi-annual distribution plans
Record and Computation Dates... FIRST day of the month as follows: monthly--each month;
semi-annual--January and July
Distribution Dates............. FIFTEENTH day of the month as follows: monthly--each month;
semi-annual--January and July commencing September 15, 1995
<FN>
<F1>Excluding insurance costs. The Estimated Annual Expenses are expected to
fluctuate periodically (see "Trust Administration--Fund Administration and
Expenses--Miscellaneous Expenses").
<F2>The Estimated Current Returns and Estimated Long-Term Returns are increased
for transactions entitled to a reduced sales charge. See "Unitholder
Explanations--Public Offering--General".
<F3>The Estimated Current Returns are calculated by dividing the Estimated Net
Annual Interest Income per Unit by the Public Offering Price. The Estimated
Net Annual Interest Income per Unit will vary with changes in fees and
expenses of the Trustee and the Evaluator and with the principal prepayment,
redemption, maturity, exchange or sale of Securities while the Public Offering
Price will vary with changes in the offering price of the underlying
Securities; therefore, there is no assurance that the present Estimated
Current Returns indicated above will be realized in the future. The Estimated
Long-Term Returns are calculated using a formula which (1) takes into
consideration, and determines and factors in the relative weightings of, the
market values, yields (which takes into account the amortization of premiums
and the accretion of discounts) and estimated retirements of all of the
Securities in the Trust and (2) takes into account the expenses and sales
charge associated with each Trust Unit. Since the market values and estimated
retirements of the Securities and the expenses of the Trust will change, there
is no assurance that the present Estimated Long-Term Returns as indicated
above will be realized in the future. The Estimated Current Returns and
Estimated Long-Term Returns are expected to differ because the calculation of
the Estimated Long-Term Return reflects the estimated date and amount of
principal returned while the Estimated Current Return calculation includes
only net annual interest income and Public Offering Price.
<F4>These figures are based on estimated per Unit cash flows. Estimated cash flows
will vary with changes in fees and expenses, with changes in current interest
rates and with the principal prepayment, redemption, maturity, call, exchange
or sale of the underlying Securities. The estimated cash flows for this Series
are set forth under "Estimated Cash Flows to Unitholders".
</TABLE>
<TABLE>
MISSOURI INSURED MUNICIPALS INCOME TRUST
SERIES 91 (181ST INSURED MULTI-SERIES)
PORTFOLIO As of July 20, 1995
<CAPTION>
Offering
Price To
Aggregate Name of Issuer, Title, Interest Rate andMaturity Date of either Redemption Missouri
Principal<F1> Bonds Deposited orBonds Contracted for<F1><F5> Rating<F2> Feature<F3> IM-IT Trust<F4>
<S> <C> <C> <C> <C>
$ 500,000 St. Louis Municipal Finance Corporation II, Leasehold Revenue
Improvement Bonds, Series 1994 (City of St. Louis, Missouri,
Lessee) Civil Courts Building Project (FGIC Insured) #5.75% Due 2004 @ 102
8/1/2013........................................................... AAA 2007 @ 100 S.F. $ 502,500
500,000 City of St. Louis, Missouri, Water Revenue Refunding and 2004 @ 102
Improvement Bonds, Series 1994 (FGIC Insured) #6.00% Due 7/1/2014. AAA 2010 @ 100 S.F. 512,525
500,000 State Environmental Improvement and Energy Resources Authority,
Missouri, Water Pollution Control Revenue Bonds (State Revolving
Fund Program-City of Branson Project) Series 1995A (Capital 2004 @ 102
Guaranty Insured) 6.05% Due 7/1/2016.............................. AAA 2010 @ 100 S.F. 512,500
600,000 Missouri Health and Educational Facilities Authority, Health and
Educational Facilities Refunding Revenue Bonds (St. Louis
University) Series 1993 (AMBAC Indemnity Insured) #4.75% Due 2003 @ 102
10/1/2016.......................................................... AAA 2011 @ 100 S.F. 530,154
600,000 Health and Educational Facilities Authority of Missouri, Health
Facilities Revenue Bonds (St. Luke's Health System) Series 1993 2003 @ 102
(MBIA Insured) #5.125% Due 11/15/2019............................. AAA 2014 @ 100 S.F. 550,506
500,000 Southeast Missouri State University, Missouri, Housing System
Refunding and Improvement Revenue Bonds, Series 1993 (MBIA 2003 @ 102
Insured) #5.875% Due 4/1/2021..................................... AAA 2015 @ 100 S.F. 507,425
200,000 Curators of the University of Missouri, University of Missouri 2003 @ 101
System Facilities Revenue Bonds, Series 1993 #5.50% Due 11/1/2023. AA 2018 @ 100 S.F. 190,040
500,000 Industrial Development Authority of the County of Jackson,
Missouri, Health Care System Revenue Bonds (St. Mary's Hospital of 2004 @ 102
Blue Springs Issue) Series 1994 (MBIA Insured) #5.75% Due 7/1/2024 AAA 2015 @ 100 S.F. 495,515
$ 3,900,000 $ 3,801,165
</TABLE>
All of the Bonds in the portfolio are insured either by one of the Preinsured
Bond Insurers (as indicated in the Bond name) or under the portfolio insurance
policy obtained by the Trust from AMBAC Indemnity. See "Unitholder
Explanations--Insurance on the Bonds in the Insured Trusts".
For an explanation of the footnotes used on this page, see "Notes to
Portfolios".
NEW MEXICO IM-IT TRUST
General. The New Mexico IM-IT Trust consists of 8 issues of Securities. None
of the Bonds in the New Mexico IM-IT Trust are general obligations of the
governmental entities issuing them or are backed by the taxing power thereof.
All of the issues are payable from the income of a specific project or
authority and are not supported by the issuer's power to levy taxes. These
issues are divided by purpose of issues (and percentage of principal amount to
total New Mexico IM-IT Trust) as follows: General Purpose, 2 (31%); Higher
Education, 2 (19%); Retail Electric/Gas, 1 (17%); Single Family Mortgage
Revenue, 1 (17%); Multi-Family Mortgage Revenue, 1 (12%) and Water and Sewer,
1 (4%). No Bond issue has received a provisional rating.
Risk Factors. New Mexico is the nation's fifth largest State in terms of
geographic size. As of 1989 the federal government owned 34.1% of New Mexico's
land, State government, 11.8% and Indian tribes, 8.3%, leaving 45.8% in
private ownership. New Mexico has 33 counties and 99 incorporated areas.
Major industries in New Mexico are energy resources (crude petroleum, natural
gas, uranium, and coal), tourism, services, arts and crafts,
agriculture-agribusiness, government (including military), manufacturing, and
mining. Major scientific research facilities at Los Alamos, Albuquerque and
White Sands are also a notable part of the State's economy. New Mexico has a
thriving tourist industry.
According to a June 1991 report of the Bureau of Business and Economic
Research of the University of New Mexico ("BBER"), New Mexico's recent
economic growth has been "subdued"and it appears that it will slow even
further before a turnaround occurs. Economic growth in New Mexico was strong
in 1989 and the first half of 1990, but declined substantially in the third
and fourth quarters of 1990. Among the localized events impacting New Mexico's
economy during 1990 were the curtailment of government funding for fusion
research at Los Alamos National Laboratory and for the Star Wars free-electron
laser at White Sands Missile Range and Los Alamos (loss of 600 jobs in the
aggregate); the move from Kirtland Air Force Base of a contract management
unit (200 jobs); the generally tight credit conditions, particularly for land
development and construction spending, which followed in the wake of
Resolution Trust Corporation takeovers of most of New Mexico's major savings
and loan associations; and oil prices which kept oil production in the State
on the decline.
Agriculture is a major part of the state's economy. As a high, relatively dry
region with extensive grasslands, New Mexico is ideal for raising cattle,
sheep, and other livestock. Because of irrigation and a variety of climatic
conditions, the state's farmers are able to produce a diverse assortment of
products. New Mexico's farmers are major producers of alfalfa hay, wheat,
chili peppers, cotton, fruits, and pecans. Agricultural businesses include
chili canneries, wineries, alfalfa pellets, chemicals and fertilizer plants,
farm machinery, feed lots, and commercial slaughter plants.
New Mexico nonagricultural employment growth was only 2.3% in 1990. During the
first quarter of 1991, growth was 1.3% compared to the first quarter of 1990
(net increase of 7,100 jobs), following a 1.2% increase in the fourth quarter
of 1990. These increases are about half the long-term trend growth rate of
2.6% of the 1947-1990 period. Income growth remained relatively strong,
increasing 7.1% in the fourth quarter of 1990 (compared to a national increase
of 5.9%).
The services sector continued to be the strongest in the State, accounting for
almost half of new jobs in the first quarter of 1991, a 2.7% growth. Business
services, health services and membership organizations provided the bulk of
services growth. The trade and government sectors had much weaker growth in
the first quarter of 1991, with 1.2% and 1.0% growth rates, respectively.
The mining sector added more than 350 jobs during 1990, most in oil and gas.
Oil well completions increased, even though oil production has been on a slow
decline. Gas well completions and gas production have also grown, as producers
continued to take advantage of the coal seam gas tax credit, which was
available through 1992.
Construction employment declined for 21 consecutive quarters through the first
quarter of 1991, but was down only 0.4% in the first quarter of 1991, after
having averaged a 4.5% decline for each of the previous twenty quarters.
Housing construction remains depressed, with new housing unit authorizations
during 1990, both single family and multifamily, at their lowest levels in
more than fifteen years.
The manufacturing sector showed a small increase (1.3%) during 1990, while
finance/insurance/real estate and transportation/communications/ utilities
demonstrated small declines (1.0% and 0.9%, respectively).
The foregoing information constitutes only a brief summary of information
about New Mexico. It does not describe the financial difficulties which may
impact certain issuers of Bonds and does not purport to be a complete or
exhaustive description of adverse conditions to which the issuers in the New
Mexico IM-IT Trust are subject. Additionally, many factors including national
economic, social and environmental policies and conditions, which are not
within the control of the issuers of Bonds, could have an adverse impact on
the financial condition of the State and various agencies and political
subdivisions located in the State. The Sponsor is unable to predict whether or
to what extent such factors or other factors may affect the issuers of Bonds,
the market value or marketability of the Bonds or the ability of the
respective issuers of the Bonds acquired by the New Mexico IM-IT Trust to pay
interest on or principal of the bonds.
Tax Status. For a discussion of the Federal tax status of income earned on New
Mexico IM-IT Trust Units, see "Other Matters--Federal Tax Status".
The assets of the New Mexico IM-IT Trust will consist of interest-bearing
obligations issued by or on behalf of the State of New Mexico ("New Mexico")
or counties, municipalities, authorities or political subdivisions thereof
(the "New Mexico Bonds"), and by or on behalf of the government of Puerto
Rico, the government of the Guam, or the government of the Virgin Islands
(collectively the "Possession Bonds") (collectively the New Mexico Bonds and
the Possession Bonds shall be referred to herein as the "Bonds") the interest
on which is expected to qualify as exempt from New Mexico income taxes.
Neither the Sponsor nor its counsel have independently examined the Bonds to
be deposited in and held in the New Mexico IM-IT Trust. However, although no
opinion is expressed herein regarding such matters, it is assumed that: (i)
the Bonds were validly issued, (ii) the interest thereon is excludable from
gross income for federal income tax purposes and (iii) interest on the Bonds,
if received directly by a Unitholder, would be exempt from the New Mexico
income taxes applicable to individuals and corporations (collectively, the
"New Mexico State Income Tax"). At the respective times of issuance of the
Bonds, opinions relating to the validity thereof and to the exemption of
interest thereon from federal income tax were rendered by bond counsel to the
respective issuing authorities. In addition, with respect to the Bonds, bond
counsel to the issuing authorities rendered opinions as to the exemption of
interest from the New Mexico State Income Tax. Neither the Sponsor nor its
counsel has made any review for the New Mexico IM-IT Trust of the proceedings
relating to the issuance of the Bonds or of the bases for the opinions
rendered in connection therewith. The opinion set forth below does not address
the taxation of persons other than full time residents of New Mexico.
In the opinion of Chapman and Cutler, Special Counsel to the Fund for New
Mexico tax matters, under existing law as of the date of this Prospectus and
based upon the assumptions set forth above:
(1) The New Mexico IM-IT Trust will not be subject to tax under the New Mexico
State Income Tax.
(2) Income on the Bonds which is exempt from the New Mexico State Income Tax
when received by the New Mexico IM-IT Trust, and which would be exempt from
the New Mexico State Income Tax if received directly by a Unitholder, will
retain its status as exempt from such tax when received by the New Mexico
IM-IT Trust and distributed to such Unitholder provided that the New Mexico
Trust complies with the reporting requirements contained in the New Mexico
State Income Tax regulations.
(3) To the extent that interest income derived from the New Mexico IM-IT Trust
by a Unitholder with respect to Possession Bonds is excludable from gross
income for federal income tax purposes pursuant to 48 U.S.C. Section 745, 48
U.S.C. Section 1423a or 48 U.S.C. Section 1403, such interest income will not
be subject to New Mexico State Income Tax.
(4) Each Unitholder will recognize gain or loss for New Mexico Income Tax
purposes if the Trustee disposes of a bond (whether by redemption, sale or
otherwise) or if the Unitholder redeems or sells Units of the New Mexico IM-IT
Trust to the extent that such a transaction results in a recognized gain or
loss to such Unitholder for federal income tax purposes. (5) The New Mexico
State Income Tax does not permit a deduction of interest paid on indebtedness
or other expenses incurred (or continued) in connection with the purchase or
carrying of Units in the New Mexico IM-IT Trust to the extent that interest
income related to the ownership of Units is exempt from the New Mexico State
Income Tax.
Investors should consult their tax advisors regarding collateral tax
consequences under New Mexico law relating to the ownership of the Units,
including, but not limited to, the inclusion of income attributable to
ownership of the Units in "modified gross income"for purposes of determining
eligibility for and the amount of the low income comprehensive tax rebate, the
child day care credit, and the elderly taxpayers' property tax rebate and the
applicability of other New Mexico taxes, such as the New Mexico estate tax.
<TABLE>
<CAPTION>
Semi-
Monthly Annual
<S> <C> <C>
Per Unit Information:
Calculation of Estimated Net Annual Unit Income:
Estimated Annual Interest Income per Unit............................. $ 55.62 $ 55.62
Less: Estimated Annual Expense per Unit <F1>.......................... $ 2.48 $ 2.03
Less: Annual Premium on Portfolio Insurance per Unit.................. $ .50 $ .50
Estimated Net Annual Interest Income per Unit......................... $ 52.64 $ 53.09
Calculation of Estimated Interest Earnings per Unit:
Estimated Net Annual Interest Income per Unit......................... $ 52.64 $ 53.09
Divided by 12 and 2, respectively..................................... $ 4.39 $ 26.55
Estimated Daily Rate of Net Interest Accrual per Unit.................. $ .14618 $ .14743
Estimated Current Return Based on Public Offering Price <F2><F3><F4>... 5.26% 5.31%
Estimated Long-Term Return <F2><F3><F4>................................ 5.35% 5.39%
Estimated Initial Monthly Distribution (September 1995)................ $ 5.26
Estimated Initial Semi-annual Distribution (January 1996).............. $ 23.00
Estimated Normal Distribution per Unit <F4>............................ $ 4.39 $ 26.55
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Trustee's Annual Fee........... $.91 and $.51 per $1,000 principal amount of Bonds, respectively,
for those portions of the New Mexico IM-IT Trust under the monthly
and semi-annual distribution plans
Record and Computation Dates... FIRST day of the month as follows: monthly--each month;
semi-annual--January and July
Distribution Dates............. FIFTEENTH day of the month as follows: monthly--each month;
semi-annual--January and July commencing September 15, 1995
<FN>
<F1>Excluding insurance costs. The Estimated Annual Expenses are expected to
fluctuate periodically (see "Trust Administration--Fund Administration and
Expenses--Miscellaneous Expenses").
<F2>The Estimated Current Returns and Estimated Long-Term Returns are increased
for transactions entitled to a reduced sales charge. See "Unitholder
Explanations--Public Offering--General".
<F3>The Estimated Current Returns are calculated by dividing the Estimated Net
Annual Interest Income per Unit by the Public Offering Price. The Estimated
Net Annual Interest Income per Unit will vary with changes in fees and
expenses of the Trustee and the Evaluator and with the principal prepayment,
redemption, maturity, exchange or sale of Securities while the Public Offering
Price will vary with changes in the offering price of the underlying
Securities; therefore, there is no assurance that the present Estimated
Current Returns indicated above will be realized in the future. The Estimated
Long-Term Returns are calculated using a formula which (1) takes into
consideration, and determines and factors in the relative weightings of, the
market values, yields (which takes into account the amortization of premiums
and the accretion of discounts) and estimated retirements of all of the
Securities in the Trust and (2) takes into account the expenses and sales
charge associated with each Trust Unit. Since the market values and estimated
retirements of the Securities and the expenses of the Trust will change, there
is no assurance that the present Estimated Long-Term Returns as indicated
above will be realized in the future. The Estimated Current Returns and
Estimated Long-Term Returns are expected to differ because the calculation of
the Estimated Long-Term Return reflects the estimated date and amount of
principal returned while the Estimated Current Return calculation includes
only net annual interest income and Public Offering Price.
<F4>These figures are based on estimated per Unit cash flows. Estimated cash flows
will vary with changes in fees and expenses, with changes in current interest
rates and with the principal prepayment, redemption, maturity, call, exchange
or sale of the underlying Securities. The estimated cash flows for this Series
are set forth under "Estimated Cash Flows to Unitholders".
</TABLE>
<TABLE>
NEW MEXICO INSURED MUNICIPALS INCOME TRUST
SERIES 18 (181ST INSURED MULTI-SERIES)
PORTFOLIO As of July 20, 1995
<CAPTION>
Offering
Price To
Aggregate Name of Issuer, Title, Interest Rate andMaturity Date of Redemption New Mexico
Principal<F1> either Bonds Deposited orBonds Contracted for<F1><F5> Rating<F2> Feature<F3> IM-IT Trust<F4>
<S> <C> <C> <C> <C>
$ 350,000 New Mexico Mortgage Finance Authority, Rental Housing
Revenue Refunding-Loans to Lenders-Series C (Netherwood 2003 @ 102
Apartments- FNMA Insured Loans) 5.35% Due 1/1/2010.......... AAA 2007 @ 100 S.F. $ 334,828
75,000 University of Puerto Rico, Revenue Refunding Bonds, Series
1995N (MBIA Insured) #0.00% Due 6/1/2013.................... YAAA 27,812 <F6>
500,000 University of New Mexico, New Mexico, University Revenue 2003 @ 102
Refunding Bonds, Series 1994 #5.00% Due 6/1/2018............ AA 2015 @ 100 S.F. 452,165
135,000 City of Rio Rancho, New Mexico, Water and Wastewater System
Revenue Bonds, Series 1995A (FSA Insured) #6.00% Due 2006 @ 100
5/15/2022.................................................... YAAA 2016 @ 100 S.F. 135,675
585,000 New Mexico Finance Authority, Public Project Revolving Fund
Revenue Bonds, Series 1995A (AMBAC Indemnity Insured) 2005 @ 100
#6.00% Due 6/1/2023.......................................... YAAA 2016 @ 100 S.F. 588,516
500,000 City of Farmington, New Mexico, Pollution Control Refunding
Revenue Bonds (Southern California Edison Company, Four
Corners Project) Series 1993A (MBIA Insured) 5.875% Due
6/1/2023..................................................... AAA 2003 @ 102 495,000
350,000 City of Santa Fe, New Mexico, Gross Receipts Tax Revenue
Bonds, Series July 1, 1994 (AMBAC Indemnity Insured) #6.30% 2004 @ 100
Due 6/1/2024................................................. AAA 2016 @ 100 S.F. 362,488
500,000 New Mexico Mortgage Finance Authority, Tax-Exempt Agency
Mortgage Backed Securities, Series 1994C #6.50% Due 7/1/2025 AAA 525,000
$ 2,995,000 $ 2,921,484
</TABLE>
All of the Bonds in the portfolio are insured either by one of the Preinsured
Bond Insurers (as indicated in the Bond name) or under the portfolio insurance
policy obtained by the Trust from AMBAC Indemnity. See "Unitholder
Explanations--Insurance on the Bonds in the Insured Trusts".
For an explanation of the footnotes used on this page, see "Notes to
Portfolios".
TENNESSEE IM-IT TRUST
General. The Tennessee IM-IT Trust consists of 8 issues of Securities. Two of
the Bonds in the Tennessee IM-IT Trust are general obligations of the
governmental entities issuing them and are backed by the taxing power thereof.
The remaining issues are payable from the income of a specific project or
authority and are not supported by the issuer's power to levy taxes. These
issues are divided by purpose of issues (and percentage of principal amount to
total Tennessee IM-IT Trust) as follows: Health Care, 3 (34%); General
Obligations, 2 (27%); Retail Electric/Gas, 1 (18%); Airport, 1 (13%) and Water
and Sewer, 1 (8%). No Bond issue has received a provisional rating.
Risk Factors. The following brief summary regarding the economy of Tennessee
is based upon information drawn from publicly available sources and is
included for the purpose of providing information about general economic
conditions that may or may not affect issuers of the Tennessee obligations.
The Sponsor has not independently verified any of the information contained in
such publicly available documents.
The State Constitution of Tennessee requires a balanced budget. No legal
authority exists for deficit spending from operating purposes beyond the end
of a fiscal year. Tennessee law permits tax anticipation borrowing but any
amount borrowed must be repaid during the fiscal year for which the borrowing
was done. Tennessee has not issued any debt for operating purposes during
recent years with the exception of some advances which were made from the
Federal Unemployment Trust Fund in 1984. No such advances are now outstanding
nor is borrowing of any type for operating purposes contemplated.
The State Constitution of Tennessee forbids the expenditure of the proceeds of
any debt obligation for a purpose other than the purpose for which it was
authorized by statute. Under State law, the term of bonds authorized and
issued cannot exceed the expected life of the projects being financed.
Furthermore, the amount of a debt obligation cannot exceed the amount
authorized by the General Assembly. The recommended State budget for Fiscal
Year 1994-95 is $12,570,380,800. State revenues are scheduled to be obtained
from taxes, each of which will generate a certain percentage of the total
revenues as follows: sales (54%); franchise and excise (12%); gasoline (11%);
gross receipts and privilege (4%); motor vehicle (3%); income and inheritance
(3%); insurance and banking (3%); tobacco, beer, and alcoholic beverages (2%)
and all other taxes (8%).
For Fiscal Year 1994-95, State revenues are scheduled to be allocated in the
following percentages: education (44%); health and social services (22%);
transportation (11%); law, safety and correction (9%); cities and counties
(8%); general government (3%); resources and regulation (2%) and business and
economic development (1%).
Overall, the economic indicators were positive for Tennessee for 1993. After a
slow start, inflation-adjusted personal income in Tennessee rebounded in the
second quarter, resulting in overall growth of 4.4% from the second quarter of
1992 to the second quarter of 1993. Tennessees employment also grew in 1993,
although its growth was not as impressive as income growth. Third-quarter
statistics for 1993 show that Tennessee nonagricultural employment was 1.7%
above the same quarter in 1992. In 1994, the Tennessee economy continued to
expand. From December, 1993 to December, 1994 Tennessees seasonally adjusted
employment grew from 2,395,100 people to 2,567,300 people, while its
unemployment rate decreased from 4.6% to 3.8% over that same period.
An increase in consumer spending is reflected in Tennessee taxable sales,
which grew 10.4% from the third quarter of 1992 to the third quarter of 1993.
Long-term average growth for taxable sales 8.5%, but the distinction between
this figure and the recent 10.4% figure is more substantial than first
appearances suggest because the long-term average includes some periods of
significantly higher inflation than the most resent quarters. Adjusted for
inflation, taxable sales grew by 7.5% from the third quarter of 1992 to the
third quarter of 1993, which is triple the long-term inflation-adjusted
average of 2.5%.
The largest contributor to Tennessees employment growth is services,
accounting for 40.9% of the employment growth that occurred from the third
quarter of 1992 to the third quarter of 1993. While it is still the most
substantial source of employment growth for Tennessee, services has
historically grown at a higher rate. Similarly, the large trade sector is not
as dominant, contributing 27.8% of employment growth from the third quarter of
1992 to the third quarter of 1993. Another sector that has become less
influential on total employment growth in Tennessee is the finance, insurance,
and real estate industry, which contributed nothing to employment growth
during the year ending in the third quarter of 1993.
Tennessees general obligation bonds are rated Aaa by Moodys and AA+ by
Standard & Poors. Tennessees smallest counties have Moodys lowest rating due
to these rural counties limited economies that make them vulnerable to
economic downturns. Tennessees four largest counties have the second highest
of Moodys nine investment grades.
Tennessee is involved in certain legal proceedings that, if decided against
the State, may require the State to make significant future expenditures or
may substantially impair revenues. The Tennessee Supreme Court currently is
reviewing a case in which the lower court found that the Tennessee Department
of Revenue improperly defined non-business earnings for tax purposes. Although
this case involves only $925,000, its outcome could affect at least five other
cases and could have a detrimental impact to Tennessee's revenue base. If the
case is affirmed, Tennessee could lose an estimated $80 million to $100
million a year in corporate income taxes. The Tennessee Supreme Court also may
hear a similar case in which the lower court found that the taxpayer's partial
sale of business holdings resulted in taxable business income. A ruling in
favor of the taxpayer could result in a $10 million tax refund.
Two other tax related cases could also affect the State's financial condition.
A recently filed class-action suit seeks damages in excess of $25 million for
the allegedly illegal collection of sales taxes paid on extended warranty
contracts on motor vehicles. In addition, a coalition of more than a dozen
hospitals is considering a class-action suit to challenge the legality of
Tennessee's Medicaid service tax. Tennessee's hospitals currently pay
approximately $504 million dollars in special taxes.
The foregoing information does not purport to be a complete or exhaustive
description of all the conditions to which the issuers of Bonds in the
Tennessee IM-IT Trust are subject. Many factors including national economic,
social and environmental policies and conditions, which are not within the
control of the issuers of Bonds, could affect or could have an adverse impact
on the financial condition of the State and various agencies and political
subdivisions located in the State. Since certain Bonds in the Tennessee IM-IT
Trust (other than general obligation bonds issued by the State) are payable
from revenue derived from a specific source or authority, the impact of a
pronounced decline in the national economy or difficulties in significant
industries within the State could result in a decrease in the amount of
revenues realized from such source or by such authority and thus adversely
affect the ability of the respective issuers of the Bonds in the Tennessee
IM-IT Trust to pay the debt service requirements on the Bonds. Similarly, such
adverse economic developments could result in a decrease in tax revenues
realized by the State and thus could adversely affect the ability of the State
to pay the debt service requirements of any Tennessee general obligation bonds
in the Tennessee IM-IT Trust. The Sponsor is unable to predict whether or to
what extent such factors or other factors may affect the issuers of Bonds, the
market value or marketability of the Bonds or the ability of the respective
issuers of the Bonds acquired by the Tennessee IM-IT Trust to pay interest on
or principal of the Bonds.
Tax Status. For a discussion of the federal tax status of income earned on
Tennessee IM-IT Trust Units, see "Other Matters--Federal Tax Status."
The assets of the Tennessee IM-IT Trust will consist of bonds issued by the
State of Tennessee (the "State") or any county or any municipality or
political subdivision thereof, including any agency, board, authority or
commission, the interest on which is exempt from the Hall Income Tax imposed
by the State of Tennessee ("Tennessee Bonds") or by the Commonwealth of Puerto
Rico or its political subdivisions (the "Puerto Rico Bonds") (collectively,
the "Bonds").
Under the recently amended provisions of Tennessee law, a unit investment
trust taxable as a grantor trust for federal income tax purposes is entitled
to special Tennessee State tax treatment (as more fully described below) with
respect to its proportionate share of interest income received or accrued with
respect to the Tennessee Bonds. The recent amendments also provide an
exemption for distributions made by a unit investment trust or mutual fund
that are attributable to "bonds or securities of the United States government
or any agency or instrumentality thereof"("U.S. Government, Agency or
Instrumentality Bonds"). If it were determined that the Trust held assets
other than Tennessee Bonds or U.S. Government, Agency or Instrumentality
Bonds, a proportionate share of distributions from the Trust would be taxable
to Unitholders for Tennessee Income Tax purposes.
Further, because the recent amendments only provide an exemption for
distributions that relate to interest income, distributions by the Trust that
relate to capital gains realized from the sale or redemption of Tennessee
Bonds or U.S. Government, Agency or Instrumentality Bonds are likely to be
treated as taxable dividends for purposes of the Hall Income Tax. However,
capital gains realized directly by a Unitholder when the Unitholder sells or
redeems his Unit will not be subject to the Hall Income Tax. The opinion set
forth below assumes that the interest on the Tennessee Bonds, if received
directly by a Unitholder, would be exempt from the Hall Income Tax under
Tennessee State law. This opinion does not address the taxation of persons
other than full-time residents of the State of Tennessee.
Because the recent amendments only provide an exemption for distributions
attributable to interest on Tennessee Bonds or U.S. Government, Agency or
Instrumentality Bonds, it must be determined whether bonds issued by the
Government of Puerto Rico qualify as U.S. Government, Agency or
Instrumentality Bonds. For Hall Income Tax purposes, there is currently no
published administrative interpretation or opinion of the Attorney General of
Tennessee dealing with the status of distributions made by unit investment
trusts such as the Tennessee Trust that are attributable to interest paid on
bonds issued by the Government of Puerto Rico. However, in a letter dated
August 14, 1992 (the "Commissioners Letter"), the Commissioner of the State of
Tennessee Department of Revenue advised that Puerto Rico would be an
"instrumentality"of the U.S. Government and treated bonds issued by the
Government of Puerto Rico as U.S. Government, Agency or Instrumentality Bonds.
Based on this conclusion, the Commissioner advised that distributions from a
mutual fund attributable to investments in Puerto Rico Bonds are exempt from
the Hall Income Tax. Both the Sponsor and Chapman and Cutler, for purposes of
its opinion (as set forth below), have assumed, based on the Commissioners
Letter, that bonds issued by the Government of Puerto Rico are U.S.
Government, Agency or Instrumentality Bonds. However, it should be noted that
the position of the Commissioner is not binding, and is subject to change,
even on a retroactive basis.
The Sponsor cannot predict whether new legislation will be enacted into law
affecting the tax status of Tennessee IM-IT Trusts. The occurrence of such an
event could cause distributions of interest income from the Trust to be
subject to the Hall Income Tax. Additional information regarding such
proposals is currently unavailable. Investors should consult their own tax
advisors in this regard.
In the opinion of Chapman and Cutler, Counsel to the Sponsor, under existing
Tennessee State law as of the date of this prospectus:
For purposes of the Hall Income Tax, the Tennessee Excise Tax imposed by
Section 67-4-806 (the "State Corporate Income Tax"), and the Tennessee
Franchise Tax imposed by Section 67-4-903, the Tennessee IM-IT Trust will not
be subject to such taxes.
For Hall Income Tax purposes, a proportionate share of such distributions from
the Tennessee IM-IT Trust to Unitholders, to the extent attributable to
interest on the Tennessee Bonds (based on the relative proportion of interest
received or accrued attributable to Tennessee Bonds) will be exempt from the
Hall Income Tax when distributed to such Unitholders. Based on the
Commissioners Letter, distributions from the Trust to Unitholders, to the
extent attributable to interest on the Puerto Rico Bonds (based on the
relative proportion of interest received or accrued attributable to the Puerto
Rico Bonds) will be exempt from the Hall Income Tax when distributed to such
Unitholders. A proportionate share of distributions from the Tennessee IM-IT
Trust attributable to assets other than the Bonds would not, under current
law, be exempt from the Hall Income Tax when distributed to Unitholders.
For Tennessee State Corporate Income Tax Purposes, Tennessee law does not
provide an exemption for interest on Tennessee Bonds and requires that all
interest excludible from Federal gross income must be included in calculating
"net earnings" subject to the State Corporate Income Tax. No opinion is
expressed regarding whether such tax would be imposed on the earnings or
distributions of the Tennessee IM-IT Trust (including interest on the Bonds or
gain realized upon the disposition of the Bonds by the Tennessee IM-IT Trust)
attributable to Unitholders subject to the State Corporate Income Tax.
However, based upon prior written advice from the Tennessee Department of
Revenue, earnings and distributions from the Tennessee IM-IT Trust (including
interest on the Tennessee Bonds or gain realized upon the disposition of the
Tennessee Bonds by the Tennessee IM-IT Trust) attributable to the Unitholders
should be exempt from the State Corporate Income Tax. The position of the
Tennessee Department of Revenue is not binding, and is subject to change, even
on a retroactive basis.
Each Unitholder will realize taxable gain or loss for State Corporate Income
Tax purposes when the Unitholder redeems or sells his Units, at a price that
differs from original cost as adjusted for accretion or any discount or
amortization of any premium and other basis adjustments, including any basis
reduction that may be required to reflect a Unitholders share of interest, if
any, accruing on Bonds during the interval between the Unitholders settlement
date and the date such Bonds are delivered to the Tennessee IM-IT Trust, if
later. Tax basis reduction requirements relating to amortization of bond
premium may, under some circumstances, result in Unitholders realizing taxable
gain when the Units are sold or redeemed for an amount equal to or less than
their original cost.
For purposes of the Tennessee Property Tax, the Tennessee IM-IT Trust will be
exempt from taxation with respect to the Bonds it holds. As for the taxation
of the Units held by the Unitholders, although intangible personal property is
not presently subject to Tennessee taxation, no opinion is expressed with
regard to potential property taxation of the Unitholders with respect to the
Units because the determination of whether property is exempt from such tax is
made on a county by county basis.
No opinion is expressed herein regarding whether insurance proceeds paid in
lieu of interest on the Bonds held by the Tennessee IM-IT Trust (including the
Tennessee Bonds) are exempt from the Hall Income Tax. Distributions of such
proceeds to Unitholders may be subject to the Hall Income Tax.
The Bonds and the Units held by the Unitholder will not be subject to
Tennessee sales and use taxes.
We have not examined any of the Bonds to be deposited and held in the
Tennessee Trust or the proceedings for the issuance thereof or the opinions of
bond counsel with respect thereto, and therefore express no opinion as to the
exemption from State income taxes of interest on the Bonds if received
directly by a Unitholder.
<TABLE>
<CAPTION>
Semi-
Monthly Annual
<S> <C> <C>
Per Unit Information:
Calculation of Estimated Net Annual Unit Income:
Estimated Annual Interest Income per Unit............................. $ 54.77 $ 54.77
Less: Estimated Annual Expense per Unit <F1>.......................... $ 2.36 $ 1.91
Less: Annual Premium on Portfolio Insurance per Unit.................. $ .27 $ .27
Estimated Net Annual Interest Income per Unit......................... $ 52.14 $ 52.59
Calculation of Estimated Interest Earnings per Unit:
Estimated Net Annual Interest Income per Unit......................... $ 52.14 $ 52.59
Divided by 12 and 2, respectively..................................... $ 4.35 $ 26.30
Estimated Daily Rate of Net Interest Accrual per Unit.................. $ .14482 $ .14607
Estimated Current Return Based on Public Offering Price <F2><F3><F4>... 5.21% 5.26%
Estimated Long-Term Return <F2><F3><F4>................................ 5.27% 5.32%
Estimated Initial Monthly Distribution (September 1995)................ $ 5.21
Estimated Initial Semi-annual Distribution (January 1996).............. $ 22.78
Estimated Normal Distribution per Unit <F4>............................ $ 4.35 $ 26.30
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Trustee's Annual Fee........... $.91 and $.51 per $1,000 principal amount of Bonds, respectively,
for those portions of the Tennessee IM-IT Trust under the monthly
and semi-annual distribution plans
Record and Computation Dates... FIRST day of the month as follows: monthly--each month;
semi-annual--January and July
Distribution Dates............. FIFTEENTH day of the month as follows: monthly--each month;
semi-annual--January and July commencing September 15, 1995
<FN>
<F1>Excluding insurance costs. The Estimated Annual Expenses are expected to
fluctuate periodically (see "Trust Administration--Fund Administration and
Expenses--Miscellaneous Expenses").
<F2>The Estimated Current Returns and Estimated Long-Term Returns are increased
for transactions entitled to a reduced sales charge. See "Unitholder
Explanations--Public Offering--General".
<F3>The Estimated Current Returns are calculated by dividing the Estimated Net
Annual Interest Income per Unit by the Public Offering Price. The Estimated
Net Annual Interest Income per Unit will vary with changes in fees and
expenses of the Trustee and the Evaluator and with the principal prepayment,
redemption, maturity, exchange or sale of Securities while the Public Offering
Price will vary with changes in the offering price of the underlying
Securities; therefore, there is no assurance that the present Estimated
Current Returns indicated above will be realized in the future. The Estimated
Long-Term Returns are calculated using a formula which (1) takes into
consideration, and determines and factors in the relative weightings of, the
market values, yields (which takes into account the amortization of premiums
and the accretion of discounts) and estimated retirements of all of the
Securities in the Trust and (2) takes into account the expenses and sales
charge associated with each Trust Unit. Since the market values and estimated
retirements of the Securities and the expenses of the Trust will change, there
is no assurance that the present Estimated Long-Term Returns as indicated
above will be realized in the future. The Estimated Current Returns and
Estimated Long-Term Returns are expected to differ because the calculation of
the Estimated Long-Term Return reflects the estimated date and amount of
principal returned while the Estimated Current Return calculation includes
only net annual interest income and Public Offering Price.
<F4>These figures are based on estimated per Unit cash flows. Estimated cash flows
will vary with changes in fees and expenses, with changes in current interest
rates and with the principal prepayment, redemption, maturity, call, exchange
or sale of the underlying Securities. The estimated cash flows for this Series
are set forth under "Estimated Cash Flows to Unitholders".
</TABLE>
<TABLE>
TENNESSEE INSURED MUNICIPALS INCOME TRUST
SERIES 32 (181ST INSURED MULTI-SERIES)
PORTFOLIO As of July 20, 1995
<CAPTION>
Offering
Price To
Aggregate Name of Issuer, Title, Interest Rate and Maturity Date of either Redemption Tennessee
Principal<F1> Bonds Deposited or Bonds Contracted for<F1> <F5> Rating<F2> Feature<F3> IM-IT Trust<F4>
<S> <C> <C> <C> <C>
$ 375,000 Chattanooga-Hamilton County Hospital Authority (Tennessee)
Hospital Revenue and Refunding Bonds, Series 1993 (Erlanger 2003 @ 102
Medical Center Issue) FSA Insured #5.50% Due 10/1/2013............ AAA 2010 @ 100 S.F. $ 362,265
545,000 City of Lafollette, Tennessee, Electric System Extension Revenue
Bonds, Series 1995 (AMBAC Indemnity Insured) #5.90% Due 6/1/2015.. YAAA 2005 @ 102 552,679
375,000 Memphis-Shelby County Airport Authority, Tennessee, Airport
Revenue Refunding Bonds, Series 1993 (MBIA Insured) #5.65% Due 2003 @ 102
9/1/2015........................................................... AAA 2011 @ 100 S.F. 370,223
230,000 Metropolitan Government of Nashville and Davidson County,
Tennessee, Water and Sewer Revenue Refunding Bonds, Series 1993 2003 @ 100
(FGIC Insured) #5.10% Due 1/1/2016................................ AAA 2014 @ 100 S.F. 210,958
125,000 Health, Educational and Housing Facilities Board of the County of
Sullivan, Tennessee, Hospital Revenue Bonds (Holston Valley Health 2003 @ 102
Care, Inc.) Series 1993 (MBIA Insured) #5.75% Due 2/15/2020....... AAA 2014 @ 100 S.F. 123,202
500,000 Shelby County, Tennessee, Unlimited Tax-General Obligation School
Bonds, Series 1995A #5.80% Due 4/1/2020........................... AA+ 2003 @ 102 495,990
300,000 Metropolitan Government of Nashville and Davidson County,
Tennessee, Multi-Purpose Improvement General Obligation Bonds 2003 @ 102
#5.625% Due 5/15/2021.............................................. AA 2018 @ 100 S.F. 290,604
500,000 Health and Educational Facilities Board of the City of Bristol,
Tennessee, Hospital Revenue Refunding Bonds, Series 1993 (Bristol 2003 @ 102
Memorial Hospital) FGIC Insured #5.25% Due 9/1/2021............... AAA 2014 @ 100 S.F. 459,455
$ 2,950,000 $ 2,865,376
</TABLE>
All of the Bonds in the portfolio are insured either by one of the Preinsured
Bond Insurers (as indicated in the Bond name) or under the portfolio insurance
policy obtained by the Trust from AMBAC Indemnity. See "Unitholder
Explanations--Insurance on the Bonds in the Insured Trusts".
For an explanation of the footnotes used on this page, see "Notes to
Portfolios".
As of the Date of Deposit: July 20, 1995
(1)All Securities are represented by "regular way" or "when issued" contracts
for the performance of which an irrevocable letter of credit, obtained from an
affiliate of the Trustee, has been deposited with the Trustee. At the Date of
Deposit, Securities may have been delivered to the Sponsor pursuant to certain
of these contracts; the Sponsor has assigned to the Trustee all of its right,
title and interest in and to such Securities. Contracts to acquire Securities
were entered into during the period from June 6,1995 to July 19,1995. These
Securities have expected settlement dates ranging from July 20,1995 to August
2, 1995 (see "Unitholder Explanations").
(2)All ratings are by Standard & Poor's unless otherwise indicated.
"*" indicates that the rating of the Bond is by Moody's Investors Service,
Inc. The ratings represent the latest published ratings by the respective
ratings agency or, if not published, represent private letter ratings or those
ratings expected to be published by the respective ratings agency. "Y"
indicates that such rating is contingent upon physical receipt by the
respective ratings agency of a policy of insurance obtained by the issuer of
the bonds involved and issued by the Preinsured Bond Insurer named in the
bond's title. A commitment for insurance in connection with these bonds has
been issued by the Preinsured Bond Insurer named in the bond's title. "N/R"
indicates that the applicable rating service did not provide a rating for
that particular Security. For a brief description of the rating symbols and
their related meanings, see "Other Matters--Description of Securities
Ratings".
(3)There is shown under this heading the year in which each issue of Bonds is
initially or currently callable and the call price for that year. Each issue
of Bonds continues to be callable at declining prices thereafter (but not
below par value) except for original issue discount bonds which are redeemable
at prices based on the issue price plus the amount of original issue discount
accreted to redemption date plus, if applicable, some premium, the amount of
which will decline in subsequent years. "S.F." indicates a sinking fund is
established with respect to an issue of Bonds. Redemption pursuant to call
provisions generally will, and redemption pursuant to sinking fund provisions
may, occur at times when the redeemed bonds have an offering side valuation
which represents a premium over par. Certain Bonds may be subject to
redemption without premium prior to the date shown pursuant to extraordinary
optional or mandatory redemptions if certain events occur. Single family
mortgage revenue bonds and housing authority bonds are most likely to be
called subject to such provisions, but other bonds may have similar call
features. Notwithstanding any provisions to the contrary, certain bond issuers
have in the past and others may in the future attempt to redeem Bonds prior to
their initially scheduled call dates and at prices which do not include any
premiums. For a general discussion of certain of these events, see "Unitholder
Explanations--Bond Redemptions". To the extent that the Securities were
deposited in a Trust at a price higher than the price at which they are
redeemed, this will represent a loss of capital when compared with the
original Public Offering Price of the Units. Conversely, to the extent that
the Bonds were acquired at a price lower than the redemption price, this will
represent an increase in capital when compared with the original Public
Offering Price of the Units. 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 Unitholders the principal
amount and any premium received on such redemption. The Estimated Current
Return and Estimated Long-Term Return in this event may be affected by such
redemptions. For the Federal tax effect on Unitholders of such redemptions and
resultant distributions, see paragraph (2) under "Other Matters--Federal Tax
Status".
(4)Evaluation of Securities is made on the basis of current offering prices
for the Securities. The offering prices are greater than the current bid
prices of the Securities which is the basis on which Unit value is determined
for purposes of redemption of Units (see "Unitholder Explanations--Public
Offering--Offering Price").
(5)Other information regarding the Bonds in each Trust, as of the Date of
Deposit, is as follows:
<TABLE>
<CAPTION>
Annual
Annual Profit Interest Bid Side
Trust Insurance Cost to (Loss) to Income to Evaluation of
Cost Sponsor Sponsor Trust Bonds
<S> <C> <C> <C> <C> <C>
IM-IT.............. $ -- $ 8,586,819 $ 754 $ 516,300 $ 8,519,550
Colorado IM-IT..... $ 850 $ 2,863,142 $ 13,645 $ 165,038 $ 2,853,885
Missouri IM-IT..... $ 240 $ 3,779,993 $ 21,172 $ 217,375 $ 3,771,236
New Mexico IM-IT... $ 1,548 $ 2,898,944 $ 22,540 $ 170,850 $ 2,898,713
Tennessee IM-IT.... $ 800 $ 2,819,959 $ 45,417 $ 165,010 $ 2,843,261
</TABLE>
The Sponsor may have entered into contracts which hedge interest rate
fluctuations on certain Bonds in certain Portfolios. The cost of any such
contracts and the corresponding gain or loss is included in the Cost to
Sponsor. Certain Securities in the Fund, if any, marked by a double asterisk
(**), have been purchased on a "when, as and if issued"or "delayed
delivery"basis. Interest on these Securities begins accruing to the benefit of
Unitholders on their respective dates of delivery. Delivery is expected to
take place at various dates after the First Settlement Date as follows:
<TABLE>
<CAPTION>
Percent of
Trust Aggregate Principal Range of Days Subsequent
Amount to First Settlement Date
<S> <C> <C>
IM-IT.............. 22% 6 to 7 days
Colorado IM-IT..... -- --
Missouri IM-IT..... -- --
New Mexico IM-IT... -- --
Tennessee IM-IT.... -- --
</TABLE>
On the Date of Deposit, the offering side evaluations of the Securities in the
IM-IT, Colorado IM-IT, Missouri IM-IT, New Mexico IM-IT and Tennessee IM-IT
Trusts were higher than the bid side evaluations of such Securities by 0.75%,
0.76%, 0.77%, 0.76% and 0.75%, respectively, of the aggregate principal
amounts of such Securities.
"#" indicates that such Bond was issued at an original issue discount. The
tax effect of Bonds issued at an original issue discount is described in
"Other Matters--Federal Tax Status".
(6)This Bond has been purchased at a deep discount from the par value because
there is little or no stated interest income thereon. Bonds which pay no
interest are normally described as "zero coupon"bonds. Over the life of bonds
purchased at a deep discount the value of such bonds will increase such that
upon maturity the holders of such bonds will receive 100% of the principal
amount thereof. To the extent that zero coupon bonds are sold or called prior
to maturity, there is no guarantee that the value of the proceeds received
therefrom by the Trust will equal or exceed the par value that would have been
obtained at maturity of such zero coupon bonds. Approximately 2% and 3% of the
aggregate principal amount of the Securities in the IM-IT and New Mexico IM-IT
Trust, respectively, are "zero coupon"bonds.
Underwriting. The Underwriters named below have severally purchased Units in
the following respective amounts from the Sponsor.
<TABLE>
<CAPTION>
Name IM-IT
Address Units
<S> <C> <C>
Van Kampen American Capital Dist., Inc. One Parkview Plaza, Oakbrook Terrace, Illinois 60181 5,955
A.G. Edwards & Sons, Inc. One North Jefferson Avenue, St. Louis, Missouri 63103 1,000
J.J.B. Hilliard, W.L. Lyons, Inc. 501 South Fourth Street, Louisville, Kentucky 40202 250
Robert W. Baird & Co. Inc. 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202 125
Advest, Inc. 280 Trumbull Street, Hartford, Connecticut 06103 100
Dean Witter Reynolds, Incorporated 2 World Trade Center, 59th Floor, New York, New York 10048 100
Fidelity Capital Markets 164 Northern Avenue, Boston, Massachusetts 02210 100
Gruntal & Co., Incorporated 14 Wall Street, New York, New York 10005 100
William R. Hough & Company 100 Second Avenue South, 8th Floor, St. Petersburg, Florida 33701 100
Edward D. Jones & Co. 201 Progress Parkway, Maryland Heights, Missouri 63043 100
Kemper Securities, Inc. 77 West Wacker Drive, 28th Floor, Chicago, Illinois 60601 100
McDonald & Company Securities, Inc. McDonald Investment Center, 800 Superior Avenue, Suite 2100,
Cleveland, Ohio 44114 100
Pershing DIV of DLJ Secs Corp. One Pershing Plaza, 7th Floor, Jersey City, New Jersey 07399 100
Principal Financial Securities, Inc. Fountain Place, 1445 Ross Avenue, Suite 2300, Dallas, Texas 75201 100
Prudential Securities Inc. 1 New York Plaza, 14th Floor, New York, New York 10292-2014 100
Rauscher Pierce Refsnes, Inc. Plaza of the Americas, 2500 North Tower, Dallas, Texas 75201 100
Raymond James & Associates, Inc. 880 Carillon Parkway, St. Petersburg, Florida 33733 100
Roosevelt & Cross Inc. 20 Exchange Place, New York, New York 10005 100
Southwest Securities Inc. 1201 Elm Street, Suite 4300, Dallas, Texas 75270 100
Stifel, Nicolaus & Company, Incorporated 500 North Broadway, St. Louis, Missouri 63102 100
B.C. Ziegler and Company 215 North Main Street, West Bend, Wisconsin 53095 100
9,030
</TABLE>
<TABLE>
<CAPTION>
Colorado
Name IM-IT Trust
Address Units
<S> <C> <C>
Van Kampen American Capital Dist., Inc. One Parkview Plaza, Oakbrook Terrace, Illinois 60181 2,525
Dean Witter Reynolds, Incorporated 2 World Trade Center, 59th Floor, New York, New York 10048 100
A.G. Edwards & Sons, Inc. One North Jefferson Avenue, St. Louis, Missouri 63103 100
Gruntal & Co., Incorporated 14 Wall Street, New York, New York 10005 100
Edward D. Jones & Co. 201 Progress Parkway, Maryland Heights, Missouri 63043 100
Smith Barney Inc. 388 Greenwich Street, 23rd Floor, New York, New York 10013 100
3,025
</TABLE>
<TABLE>
<CAPTION>
Missouri
Name IM-IT Trust
Address Units
<S> <C> <C>
Van Kampen American Capital Dist., Inc. One Parkview Plaza, Oakbrook Terrace, Illinois 60181 3,097
Dean Witter Reynolds, Incorporated 2 World Trade Center, 59th Floor, New York, New York 10048 100
A.G. Edwards & Sons, Inc. One North Jefferson Avenue, St. Louis, Missouri 63103 100
Huntleigh Securities Corporation 222 South Central, 3rd Floor, St. Louis, Missouri 63105 100
Edward D. Jones & Co. 201 Progress Parkway, Maryland Heights, Missouri 63043 100
Pershing DIV of DLJ Secs Corp. One Pershing Plaza, 7th Floor, Jersey City, New Jersey 07399 100
Prudential Securities Inc. 1 New York Plaza, 14th Floor, New York, New York 10292-2014 100
Smith Barney Inc. 388 Greenwich Street, 23rd Floor, New York, New York 10013 100
Stifel, Nicolaus & Company, Incorporated 500 North Broadway, St. Louis, Missouri 63102 100
B.C. Ziegler and Company 215 North Main Street, West Bend, Wisconsin 53095 100
3,997
</TABLE>
<TABLE>
<CAPTION>
New Mexico
Name IM-IT Trust
Address Units
<S> <C> <C>
Van Kampen American Capital Dist., Inc. One Parkview Plaza, Oakbrook Terrace, Illinois 60181 2,672
Dean Witter Reynolds, Incorporated 2 World Trade Center, 59th Floor, New York, New York 10048 100
Edward D. Jones & Co. 201 Progress Parkway, Maryland Heights, Missouri 63043 100
Smith Barney Inc. 388 Greenwich Street, 23rd Floor, New York, New York 10013 100
Southwest Securities Inc. 1201 Elm Street, Suite 4300, Dallas, Texas 75270 100
3,072
</TABLE>
<TABLE>
<CAPTION>
Tennessee
Name IM-IT Trust
Address Units
<S> <C> <C>
Van Kampen American Capital Dist., Inc. One Parkview Plaza, Oakbrook Terrace, Illinois 60181 2,513
Dean Witter Reynolds, Incorporated 2 World Trade Center, 59th Floor, New York, New York 10048 100
J.J.B. Hilliard, W.L. Lyons, Inc. 501 South Fourth Street, Louisville, Kentucky 40202 100
Edward D. Jones & Co. 201 Progress Parkway, Maryland Heights, Missouri 63043 100
Prudential Securities Inc. 1 New York Plaza, 14th Floor, New York, New York 10292-2014 100
Smith Barney Inc. 388 Greenwich Street, 23rd Floor, New York, New York 10013 100
3,013
</TABLE>
Units may also be sold to broker-dealers and others at prices representing the
per Unit concession or agency commission stated under "Trust
Administration--General--Unit Distribution". However, resales of Units by such
broker-dealers and others to the public will be made at the Public Offering
Price described in the Prospectus. The Sponsor reserves the right to reject,
in whole or in part, any order for the purchase of Units and the right to
change the amount of the concession or agency commission from time to time.
In addition to any other benefits the Underwriters may realize from the sale
of the Units of the Fund, the Agreement Among Underwriters provides that the
Sponsor will share on a pro rata basis among those Underwriters who underwrite
at least 250 Units 50% of the aggregate gain, if any, represented by the
difference between the Sponsor's cost of the Securities in connection with
their acquisition and the evaluation thereof on the Date of Deposit less
deductions for certain accrued interest and certain other costs. See "Trust
Administration--General--Sponsor and Underwriter Compensation"and
"Portfolio" for the applicable Trust.
Underwriters and broker-dealers of the Trusts, banks and/or others are
eligible to participate in a program in which such firms receive from the
Sponsor a nominal award for each of their representatives who have sold a
minimum number of units of unit investment trusts created by the Sponsor
during a specified time period. In addition, at various times the Sponsor may
implement other programs under which the sales forces of Underwriters,
brokers, dealers, banks and/or others may be eligible to win other nominal
awards for certain sales efforts, or under which the Sponsor will reallow to
any such Underwriters, brokers, dealers, banks and/or others that sponsor
sales contests or recognition programs conforming to criteria established by
the Sponsor, or participate in sales programs sponsored by the Sponsor, an
amount not exceeding the total applicable sales charges on the sales generated
by such persons at the public offering price during such programs. Also, the
Sponsor in its discretion may from time to time pursuant to objective criteria
established by the Sponsor pay fees to qualifying underwriters, brokers,
dealers, banks or others for certain services or activities which are
primarily intended to result in sales of Units of the Trusts. Such payments
are made by the Sponsor out of its own assets, and not out of the assets of
the Trusts. These programs will not change the price Unitholders pay for their
Units or the amount that the Trusts will receive from the Units sold.
Approximately every eighteen months the Sponsor holds a business seminar which
is open to Underwriters that sell units of trusts it sponsors. The Sponsor
pays substantially all costs associated with the seminar, excluding
Underwriter travel costs. Each Underwriter is invited to send a certain number
of representatives based on the gross number of units such firm underwrites
during a designated time period.
FUND ADMINISTRATION AND EXPENSES
Sponsor. Van Kampen American Capital Distributors, Inc., a Delaware
corporation, is the Sponsor of the Trust. Van Kampen American Capital
Distributors, Inc. is primarily owned by Clayton, Dubilier & Rice, Inc., a New
York-based private investment firm. Van Kampen American Capital Distributors,
Inc. management owns a significant minority equity position. Effective
December 20, 1994, the parent of Van Kampen Merritt Inc. acquired American
Capital Management & Research, Inc. As a result, Van Kampen Merritt Inc., has
changed its name to Van Kampen American Capital Distributors, Inc. Van Kampen
American Capital Distributors, Inc. specializes in the underwriting and
distribution of unit investment trusts and mutual funds. The Sponsor is a
member of the National Association of Securities Dealers, Inc. and has offices
at One Parkview Plaza, Oakbrook Terrace, Illinois 60181, (708) 684-6000 and
2800 Post Oak Boulevard, Houston, Texas, 77056, (713) 993-0500. It maintains a
branch office in Philadelphia and has regional representatives in Atlanta,
Dallas, Los Angeles, New York, San Francisco, Seattle and Tampa. As of
December 31, 1994 the total stockholders' equity of Van Kampen Merritt Inc.
was $117,357,000 (audited). (This paragraph relates only to the Sponsor and
not to the Insured Municipals Income Trust or to any Insured Multi-Series
thereof or to any other Underwriter. The information is included herein only
for the purpose of informing investors as to the financial responsibility of
the Sponsor and its ability to carry out its contractual obligations. More
detailed financial information will be made available by the Sponsor upon
request.)
As of March 31, 1995, the Sponsor and its affiliates managed or supervised
approximately $51.7 billion of investment products, of which over $24.7
billion is invested in municipal securities. The Sponsor and its affiliates
managed $38.9 billion of assets, consisting of $20.3 billion for 42 open end
mutual funds, $9.4 billion for 38 closed-end funds and $5.6 billion for 82
institutional accounts. The Sponsor has also deposited approximately $26
billion of unit investment trusts. Based on cumulative assets deposited, the
Sponsor believes that it is the largest sponsor of insured municipal unit
investment trusts, primarily through the success of its Insured Municipals
Income Trust(R) or the IM-IT(R) trust. The Sponsor also provides surveillance
and evaluation services at cost for approximately $13 billion of unit
investment trust assets outstanding. Since 1976, the Sponsor has serviced over
one million retail investor accounts, opened through retail distribution
firms. Van Kampen American Capital Distributors, Inc. is the sponsor of the
various series of the trusts listed below. Some of the mutual funds and
closed-end funds for which Van Kampen American Capital Distributors, Inc. acts
as distributor are also listed below. Only those mutual funds available for
reinvestment under the Reinvestment Option to Unitholders of unit investment
trusts are listed below. Unitholders may only invest in the trusts, mutual
funds and closed-end funds which are registered for sale in the state of
residence of such Unitholder. In order for a Unitholder to invest in the
trusts, mutual funds and closed-end funds listed below, such Unitholder must
obtain a prospectus relating to the trust or fund involved. A prospectus is
the only means by which an offer can be delivered to investors.
<TABLE>
<CAPTION>
Name of Trust Trust Investment Objective
<S> <C>
Insured Municipals Income Trust..................................... Tax-exempt income by investing in insured municipal securities
Double tax-exemption for California residents by investing in
California Insured Municipals Income Trust.......................... insured California municipal securities
Double and in certain cases triple tax-exemption for New York
residents by investing in insured New York municipal
New York Insured Municipals Income Trust............................ securities
Double and in certain cases triple tax-exemption for
Pennsylvania residents by investing in insured Pennsylvania
Pennsylvania Insured Municipals Income Trust........................ municipal securities
Insured Municipals Income Trust, Insured Multi-Series
(Premium Bond Series, National, Limited Maturity, Intermediate,
Short Intermediate, Discount, Alabama, Arizona, Arkansas,
California, California Intermediate, California Intermediate
Laddered Maturity, California Premium, Colorado, Connecticut,
Florida, Florida Intermediate, Florida Intermediate Laddered
Maturity, Georgia, Louisiana, Massachusetts, Massachusetts
Premium, Michigan, Michigan Intermediate, Michigan
Intermediate Laddered Maturity, Michigan Premium, Minnesota,
Missouri, Missouri Intermediate Laddered Maturity, Missouri
Premium, New Jersey, New Jersey Intermediate Laddered
Maturity, New Mexico, New York, New York Intermediate, New Tax-exempt income by investing in insured municipal
York Intermediate Laddered Maturity, New York Limited securities; all issuers of bonds in a state trust are located
Maturity, Ohio, Ohio Intermediate, Ohio Intermediate Laddered in such state or in territories or possessions of the United
Maturity, Ohio Premium, Oklahoma, Pennsylvania, Pennsylvania States-- providing exemptions from all state income tax for
Intermediate, Pennsylvania Intermediate Laddered Maturity, residents of such state (except for the Oklahoma IM-IT Trust
Pennsylvania Premium, Tennessee, Texas, Texas Intermediate where a portion of the income of the Trust may be subject to
Laddered Maturity, Washington, West Virginia)...................... the Oklahoma state income tax)
Insured Tax Free Bond Trust......................................... Tax-exempt income by investing in insured municipal securities
Tax-exempt income by investing in insured municipal
securities; all issuers of bonds in a state trust are located
Insured Tax Free Bond Trust, Insured Multi-Series in such state--providing exemptions from state income tax for
(National Limited Maturity, New York).............................. residents of such state
Investors' Quality Tax-Exempt Trust................................. Tax-exempt income by investing in municipal securities
Investors' Quality Tax-Exempt Trust, Multi-Series
(National, National AMT, Intermediate, Alabama, Arizona,
Arkansas, California, Colorado, Connecticut, Delaware, Tax-exempt income by investing in municipal securities; all
Florida, Georgia, Hawaii, Kansas, Kentucky, Maine, Maryland, issuers of bonds in a state trust are located in such state
Massachusetts, Michigan, Minnesota, Missouri, Nebraska, or in territories or possessions of the United
New Jersey, New York, North Carolina, Ohio, Oregon, States--providing exemptions from state income tax for
Pennsylvania, South Carolina, Virginia)............................ residents of such state
Tax-exempt income for investors not subject to the
alternative minimum tax by investing in municipal securities,
some or all of which are subject to the Federal alternative
Investors' Quality Municipals Trust, AMT Series......................minimum tax
Investors' Corporate Income Trust....................................Taxable income by investing in corporate bonds
Taxable income by investing in government-backed GNMA
Investors' Governmental Securities--Income Trust.................... securities
High current income through an investment in a diversified
portfolio of foreign currency denominated corporate debt
Van Kampen Merritt International Bond Income Trust...................obligations
High current income consistent with preservation of capital
through a diversified investment in a fixed portfolio of
insured, long-term or intermediate-term corporate debt
Van Kampen Merritt Insured Income Trust..............................securities
High current income consistent with preservation of capital
through a diversified investment in a fixed portfolio of
insured, long-term or intermediate-term corporate debt
Van Kampen American Capital Insured Income Trust.....................securities
High dividend income and capital appreciation by investing in
Van Kampen Merritt Utility Income Trust..............................common stock of electric utilities
Provide the potential for capital appreciation and income by
investing in a portfolio of actively traded, New York Stock
Exchange listed equity securities which are components of the
Van Kampen Merritt Select Equity Trust...............................Dow Jones Industrial Average*
Protect Unitholders' capital and provide the potential for
capital appreciation and income by investing a portion of its
portfolio in "zero coupon"U.S. Treasury obligations and the
remainder of the trust's portfolio in the identical equity
Van Kampen Merritt Select Equity and Treasury Trust..................securities which comprise the Select Equity Trust
Provide the potential for capital appreciation and income by
investing in a portfolio of actively traded, New York Stock
Exchange listed equity securities which are components of the
Van Kampen Merritt Blue Chip Opportunity Trust.......................Dow Jones Industrial Average*
Protect Unitholders' capital and provide the potential for
capital appreciation and income by investing a portion of its
portfolio in "zero coupon"U.S. Treasury obligations and the
remainder of the trust's portfolio in actively traded, New
York Stock Exchange listed equity securities which at the
Van Kampen Merritt Blue Chip Opportunity and time of the creation of the trust were components of the Dow
Treasury Trust......................................................Jones Industrial Average*
High current income consistent with preservation of capital
through a diversified investment in a fixed portfolio
primarily consisting of Brady Bonds of emerging market
countries that have restructured sovereign debt pursuant to
Van Kampen Merritt Emerging Markets Income Trust.....................the framework of the Brady Plan
Provide the potential for capital appreciation and income
consistent with the preservation of invested capital, by
investing in a portfolio of equity securities which provide
Van Kampen Merritt Global Telecommunications Trust...................equipment for or services to the telecommunications industry
Provide the potential for capital appreciation and income
consistent with the preservation of invested capital, by
investing in a portfolio of equity securities diversified
Van Kampen Merritt Global Energy Trust...............................within the energy industry
Provide an above average total return through a combination
of potential capital appreciation and dividend income,
consistent with preservation of invested capital, by
investing in a portfolio of common stocks of the ten
Strategic Ten Trust companies in a recognized stock exchange index having the
(United States, United Kingdom, and Hong Kong Portfolios)...........highest dividend yields
Provide the potential for capital appreciation and income
consistent with the preservation of invested capital, by
investing in a portfolio of equity securities diversified
Van Kampen Merritt Brand Name Equity Trust...........................within the non-durable consumer products industry
Provide the potential for long-term capital appreciation by
investing in shares of Govett Smaller Companies Fund and to
protect Unitholders' capital by investing a portion of its
Govett Smaller Companies Fund and Treasury Trust.....................portfolio in "zero coupon"U.S. Treasury obligations
</TABLE>
*The Dow Jones Industrial Average is the property of Dow Jones & Company, Inc.
Dow Jones & Company, Inc. has not granted to the Trust or the Sponsor a
license to use the Dow Jones Industrial Average.
<TABLE>
Name of Mutual Fund
Fund Investment Objective
<CAPTION>
<S> <C>
Van Kampen Merritt U.S. Government Fund....................High current income by investing in U.S. Government securities
High current income exempt from Federal income taxes by investing in
Van Kampen Merritt Insured Tax Free Income Fund............insured municipal securities
High level of current income exempt from Federal income tax, consistent
Van Kampen Merritt Municipal Income Fund...................with preservation of capital
High current income exempt from Federal income taxes by investing in
Van Kampen Merritt Tax Free High Income Fund...............medium and lower grade municipal securities
High current income exempt from Federal and California income taxes by
Van Kampen Merritt California Insured Tax Free Fund........investing in insured California municipal securities
Provide a high level of current income by investing in medium and lower
grade domestic and foreign government and corporate debt securities.
Van Kampen Merritt High Yield Fund.........................The Fund will seek capital appreciation as a secondary objective
Long-term growth of both capital and dividend income by investing in
Van Kampen Merritt Growth and Income Fund..................dividend paying common stocks
High current income exempt from Federal and Pennsylvania state and
local income taxes by investing in medium and lower grade Pennsylvania
Van Kampen Merritt Pennsylvania Tax Free Income Fund.......municipal securities
High current income by investing in a broad range of money market
Van Kampen Merritt Money Market Fund.......................instruments that will mature within twelve months
High current income exempt from Federal income taxes by investing in a
broad range of municipal securities that will mature within twelve
Van Kampen Merritt Tax Free Money Fund.....................months
High current income by investing in a global portfolio of high quality
debt securities denominated in various currencies having remaining
Van Kampen Merritt Short-Term Global Income Fund...........maturities of not more than three years
High level of current income with a relatively stable net asset value
Van Kampen Merritt Adjustable Rate U.S. Government Fund....investing in U.S. Government securities
High level of current income exempt from Federal income tax, consistent
Van Kampen Merritt Limited Term Municipal Income Fund......with preservation of capital
Provide capital appreciation and current income by investing in a
diversified portfolio of common stocks and income securities issued by
Van Kampen Merritt Utility Fund............................companies engaged in the utilities industry
Provide shareholders with high current income. The Fund will seek
Van Kampen Merritt Strategic Income Fund...................capital appreciation as a secondary objective
High level of current income exempt from Federal income tax and Florida
intangible personal property taxes consistent with preservation of
Van Kampen Merritt Florida Insured Tax Free Income Fund....capital
High level of current income exempt from Federal income tax and New
Van Kampen Merritt New Jersey Tax Free Income Fund.........Jersey gross income tax consistent with preservation of capital
High level of current income exempt from Federal as well as New York
State and New York City income taxes, consistent with preservation of
Van Kampen Merritt New York Tax Free Income Fund...........capital
To provide shareholders current income while also seeking to provide
Van Kampen Merritt Balanced Fund...........................capital growth
</TABLE>
<TABLE>
Name of Closed-end Fund Fund Investment Objective
<CAPTION>
<S> <C>
High current income exempt from Federal income taxes with safety of
principal by investing in a diversified portfolio of investment grade
Van Kampen Merritt Municipal Income Trust...................municipal securities
High current income exempt from Federal and California income taxes
with safety of principal by investing in a diversified portfolio of
Van Kampen Merritt California Municipal Trust...............investment grade California municipal securities
High current income while seeking to preserve shareholders' capital by
investing in a diversified portfolio of high yield fixed income
Van Kampen Merritt Intermediate Term High Income Trust......securities
High current income while seeking to preserve shareholders' capital by
investing in a diversified portfolio of high yield fixed income
Van Kampen Merritt Limited Term High Income Trust...........securities
High current income, consistent with preservation of capital by
Van Kampen Merritt Prime Rate Income Trust..................investing in interests in floating or variable rate senior loans
High current income exempt from Federal income tax, consistent with
Van Kampen Merritt Investment Grade Municipal Trust.........preservation of capital
High level of current income exempt from Federal income tax,
Van Kampen Merritt Municipal Trust..........................consistent with preservation of capital
High current income exempt from Federal and California income taxes
with safety of principal by investing in a diversified portfolio of
Van Kampen Merritt California Quality Municipal Trust.......investment grade California municipal securities
High current income exempt from Federal income taxes and Florida
intangible personal property taxes with safety of principal by
investing in a diversified portfolio of investment grade Florida
Van Kampen Merritt Florida Quality Municipal Trust..........municipal securities
High current income exempt from Federal as well as New York State and
New York City income taxes with safety of principal by investing in a
Van Kampen Merritt New York Quality Municipal Trust.........diversified portfolio of investment grade New York municipal securities
High current income exempt from Federal and Ohio income taxes with
safety of principal by investing in a diversified portfolio of
Van Kampen Merritt Ohio Quality Municipal Trust.............investment grade Ohio municipal securities
High current income exempt from Federal and Pennsylvania income taxes
with safety of principal by investing in a diversified portfolio of
Van Kampen Merritt Pennsylvania Quality Municipal Trust.....investment grade Pennsylvania municipal securities
High level of current income exempt from Federal income tax,
Van Kampen Merritt Trust for Investment Grade Municipals....consistent with preservation of capital
High level of current income exempt from Federal income tax,
consistent with preservation of capital by investing in a diversified
portfolio of municipal securities which are covered by insurance with
Van Kampen Merritt Trust for Insured Municipals.............respect to timely payment of principal and interest
High level of current income exempt from Federal and California income
Van Kampen Merritt Trust for Investment Grade CA taxes, consistent with preservation of capital by investing in a
Municipals.................................................diversified portfolio of California municipal securities
High level of current income exempt from Federal income taxes,
consistent with preservation of capital. The Fund also seeks to offer
Van Kampen Merritt Trust for Investment Grade FL its Shareholders the opportunity to own securities exempt from Florida
Municipals.................................................intangible personal property taxes
Van Kampen Merritt Trust for Investment Grade NJ
Municipals High level of current income exempt from Federal income taxes and New
..........................................................Jersey gross income taxes, consistent with preservation of capital
High level of current income exempt from Federal as well as from New
Van Kampen Merritt Trust for Investment Grade NY York State and New York City income taxes, consistent with
Municipals.................................................preservation of capital
High level of current income exempt from Federal and Pennsylvania
Van Kampen Merritt Trust for Investment Grade PA income taxes and, where possible under local law, local income and
Municipals.................................................property taxes, consistent with preservation of capital
High level of current income exempt from Federal income tax,
consistent with preservation of capital by investing in a diversified
Van Kampen Merritt Municipal Opportunity Trust..............portfolio of municipal securities
High level of current income exempt from Federal income tax,
consistent with preservation of capital by investing in a diversified
Van Kampen Merritt Advantage Municipal Income Trust.........portfolio of municipal securities
High level of current income exempt from Federal and Pennsylvania
Van Kampen Merritt Advantage Pennsylvania Municipal income taxes and, where possible under local law, local income and
Income Trust...............................................property taxes, consistent with preservation of capital
Provide common shareholders with a high level of current income exempt
Van Kampen Merritt Strategic Sector Municipal Trust.........from Federal income taxes, consistent with preservation of capital
High level of current income exempt from Federal income taxes,
Van Kampen Merritt Value Municipal Income Trust.............consistent with preservation of capital
Van Kampen Merritt California Value Municipal High level of current income exempt from Federal and California income
Income Trust...............................................taxes, consistent with preservation of capital
High level of current income exempt from Federal income taxes and
Van Kampen Merritt Massachusetts Value Municipal Massachusetts personal income taxes, consistent with preservation of
Income Trust..............................................capital
Van Kampen Merritt New Jersey Value Municipal High level of current income exempt from Federal income taxes and New
Income Trust...............................................Jersey gross income tax, consistent with preservation of capital
High level of current income exempt from Federal as well as New York
Van Kampen Merritt New York Value Municipal State and New York City income taxes, consistent with preservation of
Income Trust...............................................capital
Van Kampen Merritt Ohio Value Municipal Income High level of current income exempt from Federal and Ohio income
Trust......................................................taxes, consistent with preservation of capital
Van Kampen Merritt Pennsylvania Value Municipal High level of current income exempt from Federal and Pennsylvania
Income Trust..............................................income taxes, consistent with preservation of capital
High level of current income exempt from Federal income tax,
Van Kampen Merritt Municipal Opportunity Trust II...........consistent with preservation of capital
High level of current income exempt from Federal income tax,
consistent with preservation of capital. The Fund seeks to offer its
common shareholders the opportunity to own securities exempt from
Van Kampen Merritt Florida Municipal Opportunity Trust .....Florida intangible personal property taxes
Provide common shareholders with a high level of current income exempt
Van Kampen Merritt Advantage Municipal Income Trust II......from Federal income tax, consistent with preservation of capital
To provide common shareholders with a high level of current income
Van Kampen Merritt Select Sector Municipal Trust............exempt from Federal income tax, consistent with preservation of capital
</TABLE>
If the Sponsor shall fail to perform any of its duties under the Trust
Agreement or become incapable of acting or become bankrupt or its affairs are
taken over by public authorities, then the Trustee may (i) appoint a successor
Sponsor at rates of compensation deemed by the Trustee to be reasonable and
not exceeding amounts prescribed by the Securities and Exchange Commission,
(ii) terminate the Trust Agreement and liquidate the Fund as provided therein
or (iii) continue to act as Trustee without terminating the Trust Agreement.
All costs and expenses incurred in creating and establishing the Fund,
including the cost of the initial preparation, printing and execution of the
Trust Agreement and the certificates, legal and accounting expenses,
advertising and selling expenses, expenses of the Trustee, initial evaluation
fees and other out-of-pocket expenses have been borne by the Sponsor at no
cost to the Fund.
Compensation of Sponsor and Evaluator. The Sponsor will not receive any fees
in connection with its activities relating to the Fund. However, American
Portfolio Evaluation Services, a division of Van Kampen American Capital
Investment Advisory Corp., which is a wholly-owned subsidiary corporation of
the Sponsor, will receive an annual supervisory fee as indicated under
"Summary of Essential Financial Information" for providing portfolio
supervisory services for the Fund. Such fee (which is based on the number of
Units outstanding in each Trust on January 1 of each year) may exceed the
actual costs of providing such supervisory services for this Fund, but at no
time will the total amount received for portfolio supervisory services
rendered to Insured Municipals Income Trust, 1st Insured Multi-Series and
subsequent series and to any other unit investment trusts sponsored by the
Sponsor for which the Evaluator provides portfolio supervisory services in any
calendar year exceed the aggregate cost to the Evaluator of supplying such
services in such year. In addition, the Evaluator shall receive an annual
evaluation fee as indicated under "Summary of Essential Financial
Information" for regularly evaluating each Trust's portfolio. Both of the
foregoing fees may be increased without approval of the Unitholders by amounts
not exceeding proportionate increases under the category "All Services Less
Rent of Shelter"in the Consumer Price Index published by the United States
Department of Labor or, if such category is no longer published, in a
comparable category. The Sponsor and the Underwriters will receive sales
commissions and may realize other profits (or losses) in connection with the
sale of Units and the deposit of the Securities as described under
"General--Sponsor and Underwriter Compensation"below.
Trustee. The Trustee is The Bank of New York, a trust company organized under
the laws of New York. The Bank of New York has its offices at 101 Barclay
Street, New York, New York 10286 (800) 221-7668. The Bank of New York is
subject to supervision and examination by the Superintendent of Banks of the
State of New York and the Board of Governors of the Federal Reserve System,
and its deposits are insured by the Federal Deposit Insurance Corporation to
the extent permitted by law.
The duties of the Trustee are primarily ministerial in nature. It did not
participate in the selection of Bonds for the portfolios of any of the Trusts.
In accordance with the Trust Agreement, the Trustee shall keep proper books of
record and account of all transactions at its office for the Fund. Such
records shall include the name and address of, and the certificates issued by
the Fund to, every Unitholder of the Fund. Such books and records shall be
open to inspection by any Unitholder at all reasonable times during the usual
business hours. The Trustee shall make such annual or other reports as may
from time to time be required under any applicable state or Federal statute,
rule or regulation (see "Unitholder Explanations--Public Offering--Reports
Provided"). The Trustee is required to keep a certified copy or duplicate
original of the Trust Agreement on file in its office available for inspection
at all reasonable times during the usual business hours by any Unitholder,
together with a current list of the Securities held in the Fund.
Under the Trust Agreement, the Trustee or any successor trustee may resign and
be discharged of the trusts created by the Trust Agreement by executing an
instrument in writing and filing the same with the Sponsor. The Trustee or
successor trustee must mail a copy of the notice of resignation to all Fund
Unitholders then of record, not less than 60 days before the date specified in
such notice when such resignation is to take effect. The Sponsor upon
receiving notice of such resignation is obligated to appoint a successor
trustee promptly. If, upon such resignation, no successor trustee has been
appointed and has accepted the appointment within 30 days after notification,
the retiring Trustee may apply to a court of competent jurisdiction for the
appointment of a successor. The Sponsor may remove the Trustee and appoint a
successor trustee as provided in the Trust Agreement at any time with or
without cause. Notice of such removal and appointment shall be mailed to each
Unitholder by the Sponsor. Upon execution of a written acceptance of such
appointment by such successor trustee, all the rights, powers, duties and
obligations of the original trustee shall vest in the successor. The
resignation or removal of a Trustee becomes effective only when the successor
trustee accepts its appointment as such or when a court of competent
jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which a Trustee shall be a party, shall be the successor trustee. The Trustee
must be a banking corporation organized under the laws of the United States or
any state and having at all times an aggregate capital, surplus and undivided
profits of not less than $5,000,000.
Trustee's Fee. For its services the Trustee will receive a fee based on the
aggregate outstanding principal amount of Securities in each Trust as of the
opening of business on January 2 and July 2 of each year as set forth under
"Per Unit Information"for the applicable Trust. During the first year the
Trustee may agree to reduce its fee (and to the extent necessary pay
miscellaneous expenses of a Trust) as stated under "Per Unit Information" for
the applicable Trust. After the first year such fee will be computed at $.51
per $1,000 principal amount of Securities for that portion of each Trust under
the semi-annual distribution plan and $.91 per $1,000 principal amount of
Securities for that portion of each Trust under the monthly distribution plan.
Based on the size of the Trust on the Date of Deposit and assuming all
Unitholders had chosen the semi-annual distribution plan, the Trustee's
estimated annual fees for ordinary recurring services would initially amount
to $4,628, $1,530, $1,989, $1,527 and $1,505 for the IM-IT, Colorado IM-IT,
Missouri IM-IT, New Mexico IM-IT and Tennessee IM-IT Trusts, respectively.
Assuming in the alternative that all Unitholders had elected the monthly
distribution plan such fees would have initially amount to $8,258, $2,730,
$3,549, $2,725 and $2,685 for the above mentioned Trusts, respectively. The
Trustee's fees are payable monthly on or before the fifteenth day of each month
from the Interest Account of each Trust to the extent funds are available and
then from the Principal Account of each Trust, with such payments being based
on each Trust's portion of such expenses. Since the Trustee has the use of the
funds being held in the Principal and Interest Accounts for future
distributions, payment of expenses and redemptions and since such Accounts are
non-interest bearing to Unitholders, the Trustee benefits thereby. Part of the
Trustee's compensation for its services to each Trust is expected to result
from the use of these funds. Such fees may be increased without approval of
the Unitholders by amounts not exceeding proportionate increases under the
category "All Services Less Rent of Shelter"in the Consumer Price Index
published by the United States Department of Labor or, if such category is no
longer published, in a comparable category. The Trustee's fees will not be
increased in future years in order to make up any reduction in the Trustee's
fees described under "Per Unit Information" for the applicable Trust. For a
discussion of the services rendered by the Trustee pursuant to its obligations
under the Trust Agreement, see "Unitholder Explanations--Public Offering--
Reports Provided" and "Trustee" above.
Portfolio Administration. The Trustee is empowered to sell, for the purpose
of redeeming Units tendered by any Unitholder, and for the payment of expenses
for which funds may not be available, such of the Bonds designated by the
Evaluator as the Trustee in its sole discretion may deem necessary. The
Evaluator, in designating such Securities, will consider a variety of factors,
including (a) interest rates, (b) market value and (c) marketability. In
connection with the Insured Trusts to the extent that Bonds are sold which are
current in payment of principal and interest in order to meet redemption
requests and defaulted Bonds are retained in the portfolio in order to
preserve the related insurance protection applicable to said Bonds, the
overall quality of the Bonds remaining in such Trust's portfolio will tend to
diminish. Except as described in this section and in certain other unusual
circumstances for which it is determined by the Trustee to be in the best
interests of the Unitholders or if there is no alternative, the Trustee is not
empowered to sell Bonds from an Insured Trust which are in default in payment
of principal or interest or in significant risk of such default and for which
value has been attributed for the insurance obtained by such Insured Trust.
Because of such restrictions on the Trustee under certain circumstances, the
Sponsor may seek a full or partial suspension of the right of Unitholders to
redeem their Units in an Insured Trust. See "Unitholder Explanations--Public
Offering--Redemption of Units". The Sponsor is empowered, but not obligated,
to direct the Trustee to dispose of Bonds in the event of an advanced
refunding.
The Sponsor is required to instruct the Trustee to reject any offer made by an
issuer of any of the Securities to issue new obligations in exchange or
substitution for any Security pursuant to a refunding or refinancing plan,
except that the Sponsor may instruct the Trustee to accept or reject such an
offer or to take any other action with respect thereto as the Sponsor may deem
proper if (1) the issuer is in default with respect to such Security or (2) in
the written opinion of the Sponsor the issuer will probably default with
respect to such Security in the reasonably foreseeable future. Any obligation
so received in exchange or substitution will be held by the Trustee subject to
the terms and conditions of the Trust Agreement to the same extent as
Securities originally deposited thereunder. Within five days after the deposit
of obligations in exchange or substitution for underlying Securities, the
Trustee is required to give notice thereof to each Unitholder of the Trust
thereby affected, identifying the Securities eliminated and the Securities
substituted therefor. Except as stated herein and under "Unitholder
Explanations--Settlement of Bonds in the Trusts"regarding the substitution of
Replacement Bonds for Failed Bonds, the acquisition by the Fund of any
securities other than the Securities initially deposited is not permitted.
If any default in the payment of principal or interest on any Security occurs
and no provision for payment is made therefor within 30 days, the Trustee is
required to notify the Sponsor thereof. If the Sponsor fails to instruct the
Trustee to sell or to hold such Security within 30 days after notification by
the Trustee to the Sponsor of such default, the Trustee may in its discretion
sell the defaulted Security and not be liable for any depreciation or loss
thereby incurred.
Sponsor Purchases of Units. The Trustee shall notify the Sponsor of any tender
of Units for redemption. If the Sponsor's bid in the secondary market at that
time equals or exceeds the Redemption Price per Unit, it may purchase such
Units by notifying the Trustee before the close of business on the second
succeeding business day and by making payment therefor to the Unitholder not
later than the day on which the Units would otherwise have been redeemed by
the Trustee. Units held by the Sponsor may be tendered to the Trustee for
redemption as any other Units.
The offering price of any Units acquired by the Sponsor will be in accord with
the Public Offering Price described in the then currently effective prospectus
describing such Units. Any profit resulting from the resale of such Units will
belong to the Sponsor which likewise will bear any loss resulting from a lower
offering or Redemption Price subsequent to its acquisition of such Units.
Insurance Premiums. The cost of the portfolio insurance obtained by the
respective Trusts, if any, is that amount shown in footnote (5) in "Notes to
Portfolios", so long as such Trust retains the Bonds. Premiums, which are
obligations of each Insured Trust, are payable monthly by the Trustee on
behalf of the respective Trust. As Bonds in the portfolio of an Insured Trust
are redeemed by their respective issuers or are sold by the Trustee, the
amount of the premium will be reduced in respect of those Bonds no longer
owned by and held in such Trust. If the Trustee exercises the right to obtain
permanent insurance, the premiums payable for such permanent insurance will be
paid solely from the proceeds of the sale of the related Bonds. The premiums
for such permanent insurance with respect to each Bond will decline over the
life of the Bond. A Trust does not incur any expense for Preinsured Bond
insurance, since the premium or premiums for such insurance have been paid by
the issuer or the Sponsor prior to the deposit of such Preinsured Bonds in a
Trust. Preinsured Bonds are not additionally insured by an Insured Trust.
Miscellaneous Expenses. The following additional charges are or may be
incurred by the Trusts: (a) fees of the Trustee for extraordinary services,
(b) expenses of the Trustee (including legal and auditing expenses) and of
counsel designated by the Sponsor, (c) various governmental charges, (d)
expenses and costs of any action taken by the Trustee to protect the Trusts
and the rights and interests of Unitholders, (e) indemnification of the
Trustee for any loss, liability or expenses incurred by it in the
administration of the Fund without negligence, bad faith or willful misconduct
on its part, (f) any special custodial fees payable in connection with the
sale of any of the Bonds in a Trust, (g) expenditures incurred in contacting
Unitholders upon termination of the Trusts and (h) costs incurred to reimburse
the Trustee for advancing funds to the Trusts to meet scheduled distributions
(which costs may be adjusted periodically in response to fluctuations in
short-term interest rates).
The fees and expenses set forth herein are payable out of the Trusts. When
such fees and expenses are paid by or owing to the Trustee, they are secured
by a lien on the portfolio or portfolios of the applicable Trust or Trusts. If
the balances in the Interest and Principal Accounts are insufficient to
provide for amounts payable by the Fund, the Trustee has the power to sell
Securities to pay such amounts.
GENERAL
Amendment or Termination. The Sponsor and the Trustee have the power to amend
the Trust Agreement without the consent of any of the Unitholders when such an
amendment is (a) to cure an ambiguity or to correct or supplement any
provision of the Trust Agreement which may be defective or inconsistent with
any other provision contained therein or (b) to make such other provisions as
shall not adversely affect the interest of the Unitholders (as determined in
good faith by the Sponsor and the Trustee), provided that the Trust Agreement
may not be amended to increase the number of Units issuable thereunder or to
permit the deposit or acquisition of securities either in addition to or in
substitution for any of the Securities initially deposited in the Fund, except
for the substitution of certain refunding securities for such Securities. In
the event of any amendment, the Trustee is obligated to notify promptly all
Unitholders of the substance of such amendment.
A Trust may be terminated at any time by consent of Unitholders of 51% of the
Units of such Trust then outstanding or by the Trustee when the value of such
Trust, as shown by any semi-annual evaluation, is less than that indicated
under "Summary of Essential Financial Information". A Trust will be liquidated
by the Trustee in the event that a sufficient number of Units not yet sold are
tendered for redemption by the Underwriters, including the Sponsor, so that
the net worth of such Trust would be reduced to less than 40% of the initial
principal amount of such Trust. If a Trust is liquidated because of the
redemption of unsold Units by the Underwriters, the Sponsor will refund to
each purchaser of Units the entire sales charge paid by such purchaser. The
Trust Agreement provides that each Trust shall terminate upon the redemption,
sale or other disposition of the last Security held in such Trust, but in no
event shall it continue beyond the end of the year preceding the fiftieth
anniversary of the Trust Agreement in the case of an IM-IT or a State Trust,
or beyond the end of the year preceding the twentieth anniversary of the Trust
Agreement in the case of IM-IT Limited Maturity, IM-IT Intermediate and IM-IT
Short Intermediate Trusts. In the event of termination of the Fund or any
Trust, written notice thereof will be sent by the Trustee to each Unitholder
of such Trust at his address appearing on the registration books of the Fund
maintained by the Trustee. Within a reasonable time thereafter the Trustee
shall liquidate any Securities then held in such Trust and shall deduct from
the funds of such Trust any accrued costs, expenses or indemnities provided by
the Trust Agreement, including estimated compensation of the Trustee and costs
of liquidation and any amounts required as a reserve to provide for payment of
any applicable taxes or other governmental charges. The sale of Securities in
the Trust upon termination may result in a lower amount than might otherwise
be realized if such sale were not required at such time. For this reason,
among others, the amount realized by a Unitholder upon termination may be less
than the principal amount or par amount of Securities represented by the Units
held by such Unitholder. The Trustee shall then distribute to each Unitholder
his share of the balance of the Interest and Principal Accounts. With such
distribution the Unitholder shall be furnished a final distribution statement
of the amount distributable. At such time as the Trustee in its sole
discretion shall determine that any amounts held in reserve are no longer
necessary, it shall make distribution thereof to Unitholders in the same
manner.
Notwithstanding the foregoing, in connection with final distributions to
Unitholders of an Insured Trust, it should be noted that because the portfolio
insurance obtained by an Insured Trust is applicable only while Bonds so
insured are held by such Trust, the price to be received by such Trust upon
the disposition of any such Bond which is in default, by reason of nonpayment
of principal or interest, will not reflect any value based on such insurance.
Therefore, in connection with any liquidation, it shall not be necessary for
the Trustee to, and the Trustee does not currently intend to, dispose of any
Bond or Bonds if retention of such Bond or Bonds, until due, shall be deemed
to be in the best interest of Unitholders, including, but not limited to,
situations in which a Bond or Bonds so insured are in default and situations
in which a Bond or Bonds so insured have deteriorated market prices resulting
from a significant risk of default. Since the Preinsured Bonds will reflect
the value of the related insurance, it is the present intention of the Sponsor
not to direct the Trustee to hold any of such Preinsured Bonds after the date
of termination. All proceeds received, less applicable expenses, from
insurance on defaulted Bonds not disposed of at the date of termination will
ultimately be distributed to Unitholders of record as of such date of
termination as soon as practicable after the date such defaulted Bond or Bonds
become due and applicable insurance proceeds have been received by the Trustee.
Limitation on Liabilities. The Sponsor, the Evaluator and the Trustee shall be
under no liability to Unitholders for taking any action or for refraining from
taking any action in good faith pursuant to the Trust Agreement, or for errors
in judgment, but shall be liable only for their own willful misfeasance, bad
faith or gross negligence in the performance of their duties or by reason of
their reckless disregard of their obligations and duties hereunder. The
Trustee shall not be liable for depreciation or loss incurred by reason of the
sale by the Trustee of any of the Securities. In the event of the failure of
the Sponsor to act under the Trust Agreement, the Trustee may act thereunder
and shall not be liable for any action taken by it in good faith under the
Trust Agreement.
The Trustee shall not be liable for any taxes or other governmental charges
imposed upon or in respect of the Securities or upon the interest thereon or
upon it as Trustee under the Trust Agreement or upon or in respect of the Fund
which the Trustee may be required to pay under any present or future law of
the United States of America or of any other taxing authority having
jurisdiction. In addition, the Trust Agreement contains other customary
provisions limiting the liability of the Trustee.
The Trustee, Sponsor and Unitholders may rely on any evaluation furnished by
the Evaluator and shall have no responsibility for the accuracy thereof.
Determinations by the Evaluator under the Trust Agreement shall be made in
good faith upon the basis of the best information available to it; provided,
however, that the Evaluator shall be under no liability to the Trustee,
Sponsor or Unitholders for errors in judgment. This provision shall not
protect the Evaluator in any case of willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations and duties.
Unit Distribution. During the initial offering period, Units will be
distributed to the public by Underwriters, broker-dealers and others (see
"Underwriting") at the Public Offering Price, plus interest accrued but unpaid
from the First Settlement Date to the date of settlement as described above
under "Unitholder Explanations--Accrued Interest--Accrued Interest". Upon the
completion of the initial offering, Units repurchased in the secondary market,
if any, may be offered by this Prospectus at the secondary Public Offering
Price plus interest accrued to the date of settlement in the manner described.
The Sponsor intends to qualify the Units for sale in a number of states.
Broker-dealers or others will be allowed a concession or agency commission in
connection with the distribution of Units during the initial offering period
of in the case of an IM-IT or a State Trust $30.00 per Unit for less than 100
Units, $36.00 per Unit for any single transaction of 100 to 249 Units, $38.00
per Unit for any single transaction of 250 to 499 Units, $39.00 per Unit for
any single transaction of 500 to 999 Units and $39.00 per Unit for any single
transaction of 1,000 or more Units, provided that such Units are acquired
either from the Sponsor (in the case of dealer transactions) or through the
Sponsor (in the case of transactions involving brokers or others). The
increased concession or agency commission is a result of the discount given to
purchasers for quantity purchases. See "Unitholder Explanations--Public
Offering--General". Certain commercial banks are making Units of the Fund
available to their customers on an agency basis. A portion of the sales charge
paid by these customers (equal to the agency commission referred to above) is
retained by or remitted to the banks. Under the Glass-Steagall Act, banks are
prohibited from underwriting Units of the Fund; however, the Glass-Steagall
Act does permit certain agency transactions and the banking regulators have
not indicated that these particular agency transactions are not permitted
under such Act. In addition, state securities laws on this issue may differ
from the interpretations of federal law expressed herein and banks and
financial institutions may be required to register as dealers pursuant to
state law. Any quantity discount (see "Unitholder Explanations--Public
Offering--General") provided to investors will be borne by the selling dealer
or agent. For secondary market transactions, such concession or agency
commission will amount to 70% of the applicable sales charge as determined
using the table found in "Unitholder Explanations--Public Offering".
To facilitate the handling of transactions during the initial offering period,
sales of Units shall normally be limited to transactions involving a minimum
of five Units. Further purchases may be made in multiples of one Unit. The
minimum purchase in the secondary market will be one Unit.
The Sponsor reserves the right to reject, in whole or in part, any order for
the purchase of Units and to change the amount of the concession or agency
commission to dealers and others from time to time. See "Underwriting".
Sponsor and Underwriter Compensation. The Underwriters will receive a gross
sales commission equal to that percentage of the Public Offering Price of the
Units as indicated under "Unitholder Explanations--Public Offering--Offering
Price" less any reduced sales charges for quantity purchases as described
under "Unitholder Explanations--Public Offering--General".
The Sponsor will receive from the Underwriters the excess of such gross sales
commission over $35.00, $29.00, $27.00, $22.00 and $35.00 per Unit of any
IM-IT, IM-IT Limited Maturity, IM-IT Intermediate, IM-IT Short Intermediate
and other Insured Trusts, respectively, as of the Date of Deposit. In
connection with quantity sales to purchasers of any IM-IT or State Trust the
Underwriters will receive from the Sponsor commissions totalling $37.00 per
Unit for any single transaction of 100 to 249 Units, $39.00 per Unit for any
single transaction of 250 to 499 Units, $40.00 per Unit for any single
transaction of 500 to 999 Units and $39.00 per Unit for any single transaction
of 1,000 or more Units. A. G. Edwards & Sons, Inc. ("Edwards"), which acts as
a Managing Underwriter of Units of the various series of the IM-IT, will
receive from the Sponsor reimbursement for certain costs and further
compensation in the amount of $5.00 for each Unit of the IM-IT it underwrites.
Also, if The Principal Financial Securities, Inc. commits (on the Date of
Deposit) to underwrite a total of 4,000 or more Units of this series of the
IM-IT, any other series of the IM-IT and/or any series of Texas Insured
Municipals Income Trust during any calendar month, then The Principal
Financial Securities, Inc. will receive an additional $1.00 per Unit for each
of the Units of such Trust it commits to underwrite in said month. See
"Unitholder Explanations--Public Offering--General."Further, each Underwriter
who underwrites 1,000 or more Units in any Trust will receive additional
compensation from the Sponsor of $1.00 for each Unit it underwrites. In
addition, the Sponsor and certain of the Underwriters will realize a profit or
the Sponsor will sustain a loss, as the case may be, as a result of the
difference between the price paid for the Securities by the Sponsor and the
cost of such Securities to a Trust (which is based on the determination by
Interactive Data Services, Inc. of the aggregate offering price of the
underlying Securities in such Trust on the Date of Deposit). See
"Underwriting"and "Portfolio"for the applicable Trust and "Notes to
Portfolios". The Sponsor and the Underwriters may also realize profits or
sustain losses with respect to Securities deposited in each Trust which were
acquired by the Sponsor from underwriting syndicates of which they were
members. The Sponsor has participated as sole underwriter or as manager or as
a member of the underwriting syndicates from which none of the aggregate
principal amount of the Securities in the portfolios of the Fund were
acquired. The Underwriters may further realize additional profit or loss
during the initial offering period as a result of the possible fluctuations in
the market value of the Securities in each Trust after the Date of Deposit,
since all proceeds received from purchasers of Units (excluding dealer
concessions or agency commissions allowed, if any) will be retained by the
Underwriters. Affiliates of an Underwriter are entitled to the same dealer
concessions or agency commissions that are available to the Underwriter.
As stated under "Unitholder Explanations--Public Offering--Market for Units",
the Sponsor intends to, and certain of the other Underwriters may, maintain a
secondary market for the Units of the Fund. In so maintaining a market, such
person or persons will also realize profits or sustain losses in the amount of
any difference between the price at which Units are purchased and the price at
which Units are resold (which price is based on the bid prices of the
Securities in such Trust and includes a sales charge). In addition, such
person or persons will also realize profits or sustain losses resulting from a
redemption of such repurchased Units at a price above or below the purchase
price for such Units, respectively.
OTHER MATTERS
Legal Opinions. The legality of the Units offered hereby and certain matters
relating to Federal, Colorado, Missouri, New Mexico and Tennessee tax law have
been passed upon by Chapman and Cutler, 111 West Monroe Street, Chicago,
Illinois 60603, as counsel for the Sponsor. Tanner Propp & Farber has acted as
counsel for the Trustee and as special counsel to the Fund for New York tax
matters. None of the special counsel for the Fund has expressed any opinion
regarding the completeness or materiality of any matters contained in this
Prospectus other than the tax opinion set forth under "Tax Status" relating
to the Trust for which it has provided an opinion.
Independent Certified Public Accountants. The statements of condition and the
related securities portfolios at the Date of Deposit included in this
Prospectus have been audited by Grant Thornton LLP, independent certified
public accountants, as set forth in their report in this prospectus, and are
included herein in reliance upon the authority of said firm as experts in
accounting and auditing.
FEDERAL TAX STATUS
In the opinion of Chapman and Cutler, counsel for the Sponsor, under existing
law:
(1)Each Trust is not an association taxable as a corporation for Federal
income tax purposes and interest and accrued original issue discount on Bonds
which is excludable from gross income under the Internal Revenue Code of 1986
(the "Code") will retain its status when distributed to Unitholders, except to
the extent such interest is subject to the alternative minimum tax, an
additional tax on branches of foreign corporations and the environmental tax
(the "Superfund Tax"), as noted below;
(2)Each Unitholder is considered to be the owner of a pro rata portion of the
respective Trust under subpart E, subchapter J of chapter 1 of the Code and
will have a taxable event when such Trust disposes of a Bond, or when the
Unitholder redeems or sells his Units. Unitholders must reduce the tax basis
of their Units for their share of accrued interest received by the respective
Trust, if any, on Bonds delivered after the Unitholders pay for their Units to
the extent that such interest accrued on such Bonds during the period from the
Unitholder's settlement date to the date such Bonds are delivered to the
respective Trust and, consequently, such Unitholders may have an increase in
taxable gain or reduction in capital loss upon the disposition of such Units.
Gain or loss upon the sale or redemption of Units is measured by comparing the
proceeds of such sale or redemption with the adjusted basis of the Units. If
the Trustee disposes of Bonds (whether by sale, payment on maturity,
redemption or otherwise), gain or loss is recognized to the Unitholder. The
amount of any such gain or loss is measured by comparing the Unitholder's pro
rata share of the total proceeds from such disposition with the Unitholder's
basis for his or her fractional interest in the asset disposed of. In the case
of a Unitholder who purchases Units, such basis (before adjustment for earned
original issue discount and amortized bond premium, if any) is determined by
apportioning the cost of the Units among each of the Trust assets ratably
according to value as of the date of acquisition of the Units. The tax cost
reduction requirements of the Code relating to amortization of bond premium
may, under some circumstances, result in the Unitholder realizing a taxable
gain when his Units are sold or redeemed for an amount equal to his original
cost;
(3)Any proceeds paid under an insurance policy or policies dated the Date of
Deposit, issued to an Insured Trust by AMBAC Indemnity, Financial Guaranty or
a combination thereof with respect to the Bonds which represent maturing
interest on defaulted obligations held by the Trustee will be excludable from
Federal gross income if, and to the same extent as, such interest would have
been so excludable if paid by the issuer of the defaulted obligations provided
that, at the time such policies are purchased, the amounts paid for such
policies are reasonable, customary and consistent with the reasonable
expectation that the issuer of the obligations, rather than the insurer, will
pay debt service on the obligations; and
(4)Any proceeds paid under individual policies obtained by issuers of Bonds
which represent maturing interest on defaulted obligations held by the Trustee
will be excludable from Federal gross income if, and to the same extent as,
such interest would have been excludable if paid in the normal course by the
issuer of the defaulted obligations provided that, at the time such policies
are purchased, the amounts paid for such policies are reasonable, customary
and consistent with the reasonable expectation that the issuer of the
obligations, rather than the insurer, will pay debt service on the obligations.
Sections 1288 and 1272 of the Code provide a complex set of rules governing
the accrual of original issue discount. These rules provide that original
issue discount accrues either on the basis of a constant compound interest
rate or ratably over the term of the Bond, depending on the date the Bond was
issued. In addition, special rules apply if the purchase price of a Bond
exceeds the original issue price plus the amount of original issue discount
which would have previously accrued based upon its issue price (its "adjusted
issue price") to prior owners. The application of these rules will also vary
depending on the value of the Bond on the date a Unitholder acquires his Units
and the price the Unitholder pays for his Units. Investors with questions
regarding these Code sections should consult with their tax advisers.
"The Revenue Reconciliation Act of 1993"(the "Tax Act") subjects tax-exempt
bonds to the market discount rules of the Code effective for bonds purchased
after April 30, 1993. In general, market discount is the amount (if any) by
which the stated redemption price at maturity exceeds an investor's purchase
price (except to the extent that such difference, if any, is attributable to
original issue discount not yet accrued), subject to a statutory de minimis
rule. Market discount can arise based on the price a Trust pays for Bonds or
the price a Unitholder pays for his or her Units. Under the Tax Act, accretion
of market discount is taxable as ordinary income; under prior law the
accretion had been treated as capital gain. Market discount that accretes
while a Trust holds a Bond would be recognized as ordinary income by the
Unitholders when principal payments are received on the Bond, upon sale or at
redemption (including early redemption), or upon the sale or redemption of his
or her Units, unless a Unitholder elects to include market discount in taxable
income as it accrues. The market discount rules are complex and Unitholders
should consult their tax advisers regarding these rules and their application.
In the case of certain corporations, the alternative minimum tax and the
Superfund Tax for taxable years beginning after December 31, 1986 depends upon
the corporation's alternative minimum taxable income, which is the
corporation's taxable income with certain adjustments. One of the adjustment
items used in computing the alternative minimum taxable income and the
Superfund Tax of a corporation (other than an S Corporation, Regulated
Investment Company, Real Estate Investment Trust, or REMIC) is an amount equal
to 75% of the excess of such corporation's "adjusted current earnings"over an
amount equal to its alternative minimum taxable income (before such adjustment
item and the alternative tax net operating loss deduction). "Adjusted current
earnings"includes all tax exempt interest, including interest on all of the
Bonds in the Fund. Unitholders are urged to consult their tax advisers with
respect to the particular tax consequences to them including the corporate
alternative minimum tax, the Superfund Tax and the branch profits tax imposed
by Section 884 of the Code.
Counsel for the Sponsor has also advised that under Section 265 of the Code,
interest on indebtedness incurred or continued to purchase or carry Units of a
Trust is not deductible for Federal income tax purposes. The Internal Revenue
Service has taken the position that such indebtedness need not be directly
traceable to the purchase or carrying of Units (however, these rules generally
do not apply to interest paid on indebtedness incurred to purchase or improve
a personal residence). Also, under Section 265 of the Code, certain financial
institutions that acquire Units would generally not be able to deduct any of
the interest expense attributable to ownership of such Units. Investors with
questions regarding this issue should consult with their tax advisers.
In the case of certain of the Bonds in the Fund, the opinions of bond counsel
indicate that interest on such Bonds received by a "substantial user"of the
facilities being financed with the proceeds of these Bonds, or persons related
thereto, for periods while such Bonds are held by such a user or related
person, will not be excludible from Federal gross income, although interest on
such Bonds received by others would be excludible from Federal gross income.
"Substantial user"and "related person"are defined under U.S. Treasury
Regulations. Any person who believes that he or she may be a "substantial
user"or a "related person"as so defined should contact his or her tax adviser.
In the opinion of Tanner Propp & Farber, special counsel to the Fund for New
York tax matters, under existing law, the Fund and each Trust are not
associations taxable as corporations and the income of each Trust will be
treated as the income of the Unitholders under the income tax laws of the
State and City of New York.
All statements of law in the Prospectus concerning exclusion from gross income
for Federal, state or other tax purposes are the opinions of counsel and are
to be so construed.
At the respective times of issuance of the Bonds, opinions relating to the
validity thereof and to the exclusion of interest thereon from Federal gross
income are rendered by bond counsel to the respective issuing authorities.
Neither the Sponsor nor Chapman and Cutler has made any special review for the
Fund of the proceedings relating to the issuance of the Bonds or of the basis
for such opinions.
In the case of corporations, the alternative tax rate applicable to long-term
capital gains is 35%, effective for long-term capital gains realized in
taxable years beginning on or after January 1, 1993. For taxpayers other than
corporations, net capital gains are subject to a maximum marginal stated tax
rate of 28%. However, it should be noted that legislative proposals are
introduced from time to time that affect tax rates and could affect relative
differences at which ordinary income and capital gains are taxed. Under the
Code, taxpayers must disclose to the Internal Revenue Service the amount of
tax-exempt interest earned during the year.
Section 86 of the Code, in general, provides that 50% of Social Security
benefits are includible in gross income to the extent that the sum of
"modified adjusted gross income"plus 50% of the Social Security benefits
received exceeds a "base amount". The base amount is $25,000 for unmarried
taxpayers, $32,000 for married taxpayers filing a joint return and zero for
married taxpayers who do not live apart at all times during the taxable year
and who file separate returns. Modified adjusted gross income is adjusted
gross income determined without regard to certain otherwise allowable
deductions and exclusions from gross income and by including tax-exempt
interest. To the extent that Social Security benefits are includible in gross
income, they will be treated as any other item of gross income.
In addition, under the Tax Act, for taxable years beginning after December 31,
1993, up to 85% of Social Security benefits are includible in gross income to
the extent that the sum of "modified adjusted gross income"plus 50% of Social
Security benefits received exceeds an "adjusted base amount." The adjusted
base amount is $34,000 for unmarried taxpayers, $44,000 for married taxpayers
filing a joint return, and zero for married taxpayers who do not live apart at
all times during the taxable year and who file separate returns.
Although tax-exempt interest is included in modified adjusted gross income
solely for the purpose of determining what portion, if any, of Social Security
benefits will be included in gross income, no tax-exempt interest, including
that received from a Trust, will be subject to tax. A taxpayer whose adjusted
gross income already exceeds the base amount or the adjusted base amount must
include 50% or 85%, respectively, of his Social Security benefits in gross
income whether or not he receives any tax-exempt interest. A taxpayer whose
modified adjusted gross income (after inclusion of tax-exempt interest) does
not exceed the base amount need not include any Social Security benefits in
gross income.
For a discussion of the state tax status of income earned on Units of a Trust,
see "Tax Status"for the applicable Trust. Except as noted therein, the
exemption of interest on state and local obligations for Federal income tax
purposes discussed above does not necessarily result in exemption under the
income or other tax laws of any State or City. The laws of the several States
vary with respect to the taxation of such obligations.
DESCRIPTION OF SECURITIES RATINGS
Standard & Poor's, A Division of the McGraw-Hill Companies. A Standard &
Poor's corporate or municipal bond rating is a current assessment of the
creditworthiness of an obligor with respect to a specific debt obligation.
This assessment of creditworthiness may take into consideration obligors such
as guarantors, insurers or lessees.
The bond rating is not a recommendation to purchase or sell a security,
inasmuch as it does not comment as to market price.
The ratings are based on current information furnished to Standard & Poor's by
the issuer and obtained by Standard & Poor's from other sources it considers
reliable. The ratings may be changed, suspended or withdrawn as a result of
changes in, or unavailability of, such information.
The ratings are based, in varying degrees, on the following considerations:
I. Likelihood of default--capacity and willingness of the obligor as to the
timely payment of interest and repayment of principal in accordance with the
terms of the obligation.
II. Nature of and provisions of the obligation.
III. Protection afforded by, and relative position of, the obligation in the
event of bankruptcy, reorganization or other arrangements under the laws of
bankruptcy and other laws affecting creditors' rights.
AAA--This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay principal and
interest.
AA--Bonds rated AA also qualify as high-quality debt obligations. Capacity to
pay principal and interest is very strong, and in the majority of instances
they differ from AAA issues only in small degree.
A--Bonds rated A have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions.
BBB--Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity to pay interest and repay
principal for debt in this category than in higher rated categories.
Plus (+) or Minus (-): To provide more detailed indications of credit quality,
the ratings from "AA" to "BBB" may be modified by the addition of a plus or
minus sign to show relative standing within the major rating categories.
Provisional Ratings: A provisional rating ("p") assumes the successful
completion of the project being financed by the issuance of the bonds being
rated and indicates that payment of debt service requirements is largely or
entirely dependent upon the successful and timely completion of the project.
This rating, however, while addressing credit quality subsequent to
completion, makes no comment on the likelihood of, or the risk of default upon
failure of, such completion. Accordingly, the investor should exercise his own
judgment with respect to such likelihood and risk.
Moody's Investors Service, Inc. A brief description of the applicable Moody's
Investors Service, Inc. ("Moody's") rating symbols and their meanings follows:
Aaa--Bonds which are rated Aaa are judged to be the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edge". Interest payments are protected by a large, or by an exceptionally
stable, margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues. With the occasional
exception of oversupply in a few specific instances, the safety of obligations
of this class is so absolute that their market value is affected solely by
money market fluctuations.
Aa--Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known
as high grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuations of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in Aaa
securities. These Aa bonds are high grade, their market value virtually immune
to all but money market influences, with the occasional exception of
oversupply in a few specific instances.
A--Bonds which are rated A possess many favorable investment attributes and
are to be considered as higher medium grade obligations. Factors giving
security to principal and interest are considered adequate, but elements may
be present which suggest a susceptibility to impairment sometime in the
future. The market value of A-rated bonds may be influenced to some degree by
credit circumstances during a sustained period of depressed business
conditions. During periods of normalcy, bonds of this quality frequently move
in parallel with Aaa and Aa obligations, with the occasional exception of
oversupply in a few specific instances.
Baa--Bonds which are rated Baa are considered as medium grade obligations;
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Moody's bond rating symbols may contain numerical modifiers of a generic
rating classification. The modifier 1 indicates that the bond ranks at the
high end of its category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates that the issue ranks in the lower end of its generic
rating category.
Con--Bonds for which the security depends upon the completion of some act or
the fulfillment of some condition are rated conditionally. These are bonds
secured by (a) earnings of projects under construction, (b) earnings of
projects unseasoned in operating experience, (c) rentals which begin when
facilities are completed, or (d) payments to which some other limiting
condition attaches. Parenthetical rating denotes probable credit stature upon
completion of construction or elimination of basis of condition.
*As published by the rating companies.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors of Van Kampen American Capital Distributors, Inc.
and the Unitholders of Insured Municipals Income Trust, 181st Insured
Multi-Series (IM-IT, Colorado IM-IT, Missouri IM-IT, New Mexico IM-IT and
Tennessee IM-IT Trusts):
We have audited the accompanying statements of condition and the related
portfolios of Insured Municipals Income Trust, 181st Insured Multi-Series
(IM-IT, Colorado IM-IT, Missouri IM-IT, New Mexico IM-IT and Tennessee IM-IT
Trusts) as of July 20, 1995. The statements of condition and portfolios are
the responsibility of the Sponsor. Our responsibility is to express an opinion
on such financial statements based on our audit.
We conducted our audit 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. Our
procedures included confirmation of irrevocable letters of credit deposited to
purchase tax-exempt securities by correspondence with the Trustee. An audit
also includes assessing the accounting principles used and significant
estimates made by the Sponsor, as well as evaluating the overall financial
statement presentation. We believe our audit provides 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 Insured Municipals Income
Trust, 181st Insured Multi-Series (IM-IT, Colorado IM-IT, Missouri IM-IT, New
Mexico IM-IT and Tennessee IM-IT Trusts) as of July 20, 1995, in conformity
with generally accepted accounting principles.
Chicago, Illinois GRANT THORNTON LLP
July 20, 1995
<TABLE>
INSURED MUNICIPALS INCOME TRUST
181st INSURED MULTI-SERIES
Statements of Condition
As of July 20, 1995
<CAPTION>
INVESTMENT IN SECURITIES Colorado Missouri
IM-IT IM-IT Trust IM-IT Trust
<S> <C> <C> <C>
Contracts to purchase tax-exempt securities <F1><F2><F4>... $ 8,587,573 $ 2,876,787 $ 3,801,165
Accrued interest to the First Settlement Date <F1><F4>..... 77,036 30,376 54,265
Total...................................................... $ 8,664,609 $ 2,907,163 $ 3,855,430
LIABILITY AND INTEREST OF UNITHOLDERS
Liability--
Accrued interest payable to Sponsor <F1><F4> $ 77,036 $ 30,376 $ 54,265
Interest of Unitholders-- .................................
Cost to investors <F3>..................................... 9,030,330 3,025,000 3,997,000
Less: Gross underwriting commission <F3>................... 442,427 148,213 195,835
Net interest to Unitholders <F1><F3><F4>................... 8,587,573 2,876,787 3,801,165
Total...................................................... $ 8,664,609 $ 2,907,163 $ 3,855,430
<FN>
<F1>The aggregate value of the Securities listed under "Portfolio" for each Trust
herein, and their cost to such Trust are the same. The value of the Securities
is determined by Interactive Data Services, Inc. on the bases set forth under
"Unitholder Explanations--Public Offering--Offering Price". The contracts to
purchase tax-exempt Securities are collateralized by irrevocable letters of
credit which have been deposited with the Trustee in and for the following
amounts:
</TABLE>
<TABLE>
<CAPTION>
Accrued
Principal Offering Price Interest to
Amount of of Bonds Expected
Amount of Bonds Under Under Delivery
Letter of Credit Contracts Contracts Dates
<S> <C> <C> <C> <C>
IM-IT $ 8,661,902 $ 9,075,000 $ 8,587,573 $ 74,329
Colorado IM-IT Trust $ 2,905,087 $ 3,000,000 $ 2,876,787 $ 28,300
Missouri IM-IT Trust $ 3,852,410 $ 3,900,000 $ 3,801,165 $ 51,245
<FN>
<F2>Insurance coverage providing for timely payment, when due, of all principal
and interest on the Bonds in the Insured Trusts has been obtained either by
such Trusts, by a prior owner of the Bonds, by the Sponsor prior to the
deposit of such Bonds or by the issuers of the Bonds involved. Such insurance
does not guarantee the market value of the Bonds or the value of the Units.
The insurance obtained by the Insured Trusts is effective only while Bonds
thus insured are held in such Trusts. Neither the bid nor offering prices of
the underlying Bonds or of the Units, absent situations in which bonds are in
default in payment of principal or interest or in significant risk of such
default, include value, if any, attributable to the insurance obtained by such
Trusts.
<F3>The aggregate public offering price (exclusive of interest) and the aggregate
sales charge are computed on the bases set forth under "Unitholder
Explanations--Public Offering--Offering Price" and "Trust
Administration--General--Sponsor and Underwriter Profits"and assume all single
transactions involve less than 100 Units. For single transactions involving
100 or more Units, the sales charge is reduced (see "Unitholder
Explanations--Public Offering--General") resulting in an equal reduction in
both the Cost to investors and the Gross underwriting commission while the Net
interest to Unitholders remains unchanged.
<F4>The Trustee will advance to the Trust the amount of net interest accrued to
July 25, 1995, the First Settlement Date, for distribution to the Sponsor as
the Unitholder of record as of the First Settlement Date.
</TABLE>
<TABLE>
INSURED MUNICIPALS INCOME TRUST
181st INSURED MULTI-SERIES
Statements of Condition (Continued)
As of July 20, 1995
<CAPTION>
INVESTMENT IN SECURITIES New Mexico Tennessee
IM-IT Trust IM-IT Trust
<S> <C> <C>
Contracts to purchase tax-exempt securities <F1><F2><F4>... $ 2,921,484 $ 2,865,376
Accrued interest to the First Settlement Date <F1><F4>..... 18,794 47,049
Total...................................................... $ 2,940,278 $ 2,912,425
LIABILITY AND INTEREST OF UNITHOLDERS
Liability--
Accrued interest payable to Sponsor <F1><F4> $ 18,794 $ 47,049
Interest of Unitholders-- .................................
Cost to investors <F3>..................................... 3,072,000 3,013,000
Less: Gross underwriting commission <F3>................... 150,516 147,624
Net interest to Unitholders <F1><F3><F4>................... 2,921,484 2,865,376
Total...................................................... $ 2,940,278 $ 2,912,425
<FN>
<F1>The aggregate value of the Securities listed under "Portfolio" for each
Trust herein, and their cost to such Trust are the same. The value of the
Securities is determined by Interactive Data Services, Inc. on the bases set
forth under "Unitholder Explanations--Public Offering--Offering Price". The
contracts to purchase tax-exempt Securities are collateralized by irrevocable
letters of credit which have been deposited with the Trustee in and for the
following amounts:
</TABLE>
<TABLE>
<CAPTION>
Accrued
Principal Interest to
Amount of Offering Price Expected
Amount of Bonds Under of Bonds Under Delivery
Letter of Credit Contracts Contracts Dates
<S> <C> <C> <C> <C>
New Mexico IM-IT Trust $ 2,938,018 $ 2,995,000 $ 2,921,484 $ 16,534
Tennessee IM-IT Trust $ 2,910,180 $ 2,950,000 $ 2,865,376 $ 44,804
<FN>
<F2>Insurance coverage providing for timely payment, when due, of all principal
and interest on the Bonds in the Insured Trusts has been obtained either by
such Trusts, by a prior owner of the Bonds, by the Sponsor prior to the
deposit of such Bonds or by the issuers of the Bonds involved. Such insurance
does not guarantee the market value of the Bonds or the value of the Units.
The insurance obtained by the Insured Trusts is effective only while Bonds
thus insured are held in such Trusts. Neither the bid nor offering prices of
the underlying Bonds or of the Units, absent situations in which bonds are in
default in payment of principal or interest or in significant risk of such
default, include value, if any, attributable to the insurance obtained by such
Trusts.
<F3>The aggregate public offering price (exclusive of interest) and the aggregate
sales charge are computed on the bases set forth under "Unitholder
Explanations--Public Offering--Offering Price" and "Trust
Administration--General--Sponsor and Underwriter Profits" and assume all single
transactions involve less than 100 Units. For single transactions involving
100 or more Units, the sales charge is reduced (see "Unitholder
Explanations--Public Offering--General") resulting in an equal reduction in
both the Cost to investors and the Gross underwriting commission while the Net
interest to Unitholders remains unchanged.
<F4>The Trustee will advance to the Trust the amount of net interest accrued to
July 25, 1995, the First Settlement Date, for distribution to the Sponsor as
the Unitholder of record as of the First Settlement Date.
</TABLE>
EQUIVALENT TAXABLE ESTIMATED CURRENT RETURN TABLES
As of the date of this prospectus, the following tables show the approximate
taxable estimated current returns for individuals that are equivalent to
tax-exempt estimated current returns under combined Federal and State taxes
(where applicable) using the published Federal and State tax rates (where
applicable) scheduled to be in effect in 1995. They incorporate increased tax
rates for higher income taxpayers that were included in the Revenue
Reconciliation Act of 1993. These tables illustrate approximately what you
would have to earn on taxable investments to equal the tax-exempt estimated
current return in your income tax bracket. For cases in which more than one
State bracket falls within a Federal bracket, the highest State bracket is
combined with the Federal bracket. The combined State and Federal tax rates
shown reflect the fact that State tax payments are currently deductible for
Federal tax purposes. The tables do not show the approximate taxable estimated
current returns for individuals that are subject to the alternative minimum
tax. The taxable equivalent estimated current returns may be somewhat higher
than the equivalent returns indicated in the following tables for those
individuals who have adjusted gross incomes in excess of $114,700. The tables
do not reflect the effect of limitations on itemized deductions and the
deduction for personal exemptions. They were designed to phase out certain
benefits of these deductions for higher income taxpayers. These limitations,
in effect, raise the marginal maximum Federal tax rate to approximately 44
percent for taxpayers filing a joint return and entitled to four personal
exemptions and to approximately 41 percent for taxpayers filing a single
return entitled to only one personal exemption. These limitations are subject
to certain maximums, which depend on the number of exemptions claimed and the
total amount of the taxpayer's itemized deductions. For example, the
limitation on itemized deductions will not cause a taxpayer to lose more than
80% of his allowable itemized deductions, with certain exceptions. See "Other
Matters--Federal Tax Status"for a more detailed discussion of recent Federal
tax legislation, including a discussion of provisions affecting corporations.
IM-IT
<TABLE>
<CAPTION>
Taxable Income ($1,000's) Tax-Exempt Estimated Current Return
Single Joint Tax
Return Return Bracket 5% 5 1/2% 6% 6 1/2% 7% 7 1/2% 8%
Equivalent Taxable Estimated Current Return
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0 - 23.35 $ 0 - 39.00 15% 5.88% 6.47% 7.06% 7.65% 8.24% 8.82% 9.41%
23.35 - 56.55 39.00 - 94.25 28 6.94 7.64 8.33 9.03 9.72 10.42 11.11
56.55 - 117.95 94.25 - 143.60 31 7.25 7.97 8.70 9.42 10.14 10.87 11.59
117.95 - 256.50 143.60 - 256.50 36 7.81 8.59 9.38 10.16 10.94 11.72 12.50
Over 256.50 Over 256.50 39.6 8.28 9.11 9.93 10.76 11.59 12.42 13.25
</TABLE>
COLORADO
<TABLE>
<CAPTION>
Taxable Income ($1,000's) Tax-Exempt Estimated Current Return
Single Joint Tax
Return Return Bracket 5% 5 1/2% 6% 6 1/2% 7% 7 1/2% 8%
Equivalent Taxable Estimated Current Return
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0 - 23.35 $ 0 - 39.00 19.3% 6.20% 6.82% 7.43% 8.05% 8.67% 9.29% 9.91%
23.35 - 56.55 39.00 - 94.25 31.6 7.31 8.04 8.77 9.50 10.23 10.96 11.70
56.55 - 117.95 94.25 - 143.60 34.5 7.63 8.40 9.16 9.92 10.69 11.45 12.21
117.95 - 256.50 143.60 - 256.50 39.2 8.22 9.05 9.87 10.69 11.51 12.34 13.16
Over 256.50 Over 256.50 42.6 8.71 9.58 10.45 11.32 12.20 13.07 13.94
</TABLE>
MISSOURI
<TABLE>
<CAPTION>
Taxable Income ($1,000's) Tax-Exempt Estimated Current Return
Single Joint Tax
Return Return Bracket* 5% 5 1/2% 6% 6 1/2% 7% 7 1/2% 8%
Equivalent Taxable Estimated Current Return
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0 - 23.35 $ 0 - 39.00 19.4% 6.20% 6.82% 7.44% 8.06% 8.68% 9.31% 9.93%
23.35 - 56.55 39.00 - 94.25 32.3 7.39 8.12 8.86 9.60 10.34 11.08 11.82
56.55 - 117.95 94.25 - 143.60 35.1 7.70 8.47 9.24 10.02 10.79 11.56 12.33
117.95 - 256.50 143.60 - 256.50 39.8 8.31 9.14 9.97 10.80 11.63 12.46 13.29
Over 256.50 Over 256.50 43.2 8.80 9.68 10.56 11.44 12.32 13.20 14.08
</TABLE>
*The combined State and Federal tax bracket is computed by taking into account
the deductibility of State tax in determining Federal tax and the limited
deductibility of Federal tax in determining State tax. Specifically, the
deduction allowed for Federal income tax liability may not exceed $5,000 and
$10,000 for single and joint taxpayers, respectively. Accordingly, the
combined tax bracket reflects cross-deductibility of each tax determining the
other only for levels of income corresponding to the 15% Federal tax bracket.
NEW MEXICO
<TABLE>
<CAPTION>
Taxable Income ($1,000's) Tax-Exempt Estimated Current Return
Single Joint Tax
Return Return Bracket 5% 5 1/2% 6% 6 1/2% 7% 7 1/2% 8%
Equivalent Taxable Estimated Current Return
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0 - 23.35 $ 0 - 39.00 20.1% 6.26% 6.88% 7.51% 8.14% 8.76% 9.39% 10.01%
23.35 - 56.55 33.7 7.54 6.96 7.59 8.23 8.86 9.49 10.13
39.00 - 94.25 34.1 7.59 8.35 9.10 9.86 10.62 11.38 12.14
56.55 - 117.95 94.25 - 143.60 36.9 7.92 8.72 9.51 10.30 11.09 11.89 12.68
117.95 - 256.50 143.60 - 256.50 41.4 8.53 9.39 10.24 11.09 11.95 12.80 13.65
Over 256.50 Over 256.50 44.7 9.04 9.95 10.85 11.75 12.66 13.56 14.47
</TABLE>
TENNESSEE
<TABLE>
<CAPTION>
Taxable Income ($1,000's) Tax-Exempt Estimated Current Return
Single Joint Tax
Return Return Bracket 5% 5 1/2% 6% 6 1/2% 7% 7 1/2% 8%
Equivalent Taxable Estimated Current Return
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0 - 23.35 $ 0 - 39.00 20.1% 6.26% 6.88% 7.51% 8.14% 8.76% 9.39% 10.01%
23.35 - 56.55 39.00 - 94.25 32.3 7.39 8.12 8.86 9.60 10.34 11.08 11.82
56.55 - 117.95 94.25 - 143.60 35.1 7.70 8.47 9.24 10.02 10.79 11.56 12.33
117.95 - 256.50 143.60 - 256.50 39.8 8.31 9.14 9.97 10.80 11.63 12.46 13.29
Over 256.50 Over 256.50 43.2 8.80 9.68 10.56 11.44 12.32 13.20 14.08
</TABLE>
A comparison of tax-free and equivalent taxable estimated current returns with
the returns on various taxable investments is one element to consider in
making an investment decision. The Sponsor may from time to time in its
advertising and sales materials compare the then current estimated returns on
the Trusts and returns over specified periods on other similar Van Kampen
American Capital sponsored unit investment trusts with returns on taxable
investments such as corporate or U.S. Government bonds, bank CDs and money
market accounts or money market funds, each of which has investment
characteristics that may differ from those of the Trusts. U.S. Government
bonds, for example, are backed by the full faith and credit of the U.S.
Government and bank CDs and money market accounts are insured by an agency of
the federal government. Money market accounts and money market funds provide
stability of principal, but pay interest at rates that vary with the condition
of the short-term debt market. The investment characteristics of the Trusts
are described more fully elsewhere in this Prospectus.
ESTIMATED CASH FLOWS TO UNITHOLDERS
The tables below set forth the per Unit estimated monthly and semi-annual
distributions of interest and principal to Unitholders. The tables assume no
changes in expenses, no changes in the current interest rates, no exchanges,
redemptions, sales or prepayments of the underlying Securities prior to
maturity or expected retirement date and the receipt of principal upon
maturity or expected retirement date. To the extent the foregoing assumptions
change actual distributions will vary.
IM-IT
Monthly
<TABLE>
<CAPTION>
Estimated Estimated Estimated
Distribution Dates Interest Principal Total
(Each Month) Distribution Distribution Distribution
<S> <C> <C> <C> <C> <C> <C>
September 1995 $ 5.49 $ 5.49
October 1995 - June 2015 4.58 4.58
July 2015 4.58 $ 110.74 115.32
August 2015 - May 2020 4.09 4.09
June 2020 4.09 110.74 114.83
July 2020 3.56 110.74 114.30
August 2020 - July 2022 3.07 3.07
August 2022 2.90 66.45 69.35
September 2022 - May 2023 2.75 2.75
June 2023 2.75 83.05 85.80
July 2023 - January 2024 2.35 2.35
February 2024 2.35 110.74 113.09
March 2024 - June 2024 1.83 1.83
July 2024 1.83 19.38 21.21
August 2024 - August 2025 1.83 1.83
September 2025 1.72 155.04 156.76
October 2025 - November 2025 1.07 1.07
December 2025 .87 83.06 83.93
January 2026 .57 44.30 44.87
February 2026 - May 2026 .47 .47
June 2026 .20 110.74 110.94
</TABLE>
IM-IT (continued)
Semi-annual
<TABLE>
<CAPTION>
Distribution Dates Estimated Estimated Estimated
(Each June and December Interest Principal Total
Unless Otherwise Indicated) Distribution Distribution Distribution
<S> <C> <C> <C> <C> <C> <C>
December 1995 $ 19.39 $ 19.39
June 1996 - June 2015 27.70 27.70
July 2015 $ 110.74 110.74
December 2015 25.27 25.27
June 2016 - December 2019 24.79 24.79
June 2020 24.79 110.74 135.53
July 2020 110.74 110.74
December 2020 19.08 19.08
June 2021 - June 2022 18.58 18.58
August 2022 66.45 66.45
December 2022 17.15 17.15
June 2023 16.69 83.05 99.74
December 2023 14.23 14.23
February 2024 110.74 110.74
June 2024 12.16 12.16
July 2024 19.38 19.38
December 2024 - June 2025 11.13 11.13
September 2025 155.04 155.04
December 2025 8.51 83.06 91.57
January 2026 44.30 44.30
June 2026 2.73 110.74 113.47
</TABLE>
Colorado IM-IT Trust
Monthly
<TABLE>
<CAPTION>
Estimated Estimated Estimated
Distribution Dates Interest Principal Total
(Each Month) Distribution Distribution Distribution
<S> <C> <C> <C> <C> <C> <C>
September 1995 $ 5.19 $ 5.19
October 1995 - March 2005 4.33 4.33
April 2005 4.33 $ 198.34 202.67
May 2005 3.40 3.40
June 2005 3.32 33.06 36.38
July 2005 - November 2012 3.25 3.25
December 2012 3.25 99.17 102.42
January 2013 - May 2015 2.80 2.80
June 2015 2.60 82.65 85.25
July 2015 - September 2015 2.42 2.42
October 2015 2.14 115.70 117.84
November 2015 - November 2017 1.90 1.90
December 2017 1.90 165.29 167.19
January 2018 - November 2023 1.23 1.23
December 2023 .87 165.29 166.16
January 2024 - November 2025 .55 .55
December 2025 .22 132.23 132.45
</TABLE>
Semi-annual
<TABLE>
<CAPTION>
Distribution Dates Estimated Estimated Estimated
(Each January and July Interest Principal Total
Unless Otherwise Indicated) Distribution Distribution Distribution
<S> <C> <C> <C> <C> <C> <C>
January 1996 $ 22.68 $ 22.68
July 1996 - January 2005 26.17 26.17
April 2005 $ 198.34 198.34
June 2005 33.06 33.06
July 2005 23.14 23.14
January 2006 - July 2012 19.64 19.64
December 2012 99.17 99.17
January 2013 19.20 19.20
July 2013 - January 2015 16.96 16.96
June 2015 82.65 82.65
July 2015 16.37 16.37
October 2015 115.70 115.70
January 2016 12.80 12.80
July 2016 - July 2017 11.50 11.50
December 2017 165.29 165.29
January 2018 10.82 10.82
July 2018 - July 2023 7.44 7.44
December 2023 165.29 165.29
January 2024 6.39 6.39
July 2024 - July 2025 3.35 3.35
December 2025 2.46 132.23 134.69
</TABLE>
Missouri IM-IT Trust
Monthly
<TABLE>
<CAPTION>
Estimated Estimated Estimated
Distribution Dates Interest Principal Total
(Each Month) Distribution Distribution Distribution
<S> <C> <C> <C> <C> <C> <C>
September 1995 $ 5.20 $ 5.20
October 1995 - March 2005 4.34 4.34
April 2005 4.34 $ 125.09 129.43
May 2005 - June 2006 3.77 3.77
July 2006 3.77 250.19 253.96
August 2006 2.54 125.09 127.63
September 2006 - September 2016 1.95 1.95
October 2016 1.95 150.11 152.06
November 2016 - November 2019 1.38 1.38
December 2019 1.04 150.12 151.16
January 2020 - October 2023 .75 .75
November 2023 .75 50.03 50.78
December 2023 - June 2024 .53 .53
July 2024 .53 125.10 125.63
</TABLE>
Semi-annual
<TABLE>
<CAPTION>
Distribution Dates Estimated Estimated Estimated
(Each January and July Interest Principal Total
Unless Otherwise Indicated) Distribution Distribution Distribution
<S> <C> <C> <C> <C> <C> <C>
January 1996 $ 22.71 $ 22.71
July 1996 - January 2005 26.22 26.22
April 2005 $ 125.09 125.09
July 2005 24.51 24.51
January 2006 22.81 22.81
July 2006 22.81 250.19 273.00
August 2006 125.09 125.09
January 2007 12.42 12.42
July 2007 - July 2016 11.83 11.83
October 2016 150.11 150.11
January 2017 10.08 10.08
July 2017 - July 2019 8.33 8.33
December 2019 150.12 150.12
January 2020 7.36 7.36
July 2020 - July 2023 4.54 4.54
November 2023 50.03 50.03
January 2024 4.10 4.10
July 2024 3.21 125.10 128.31
</TABLE>
New Mexico IM-IT Trust
Monthly
<TABLE>
<CAPTION>
Estimated Estimated Estimated
Distribution Dates Interest Principal Total
(Each Month) Distribution Distribution Distribution
<S> <C> <C> <C> <C> <C> <C>
September 1995 $ 5.26 $ 5.26
October 1995 - May 2004 4.39 4.39
June 2004 4.39 $ 113.93 118.32
July 2004 - May 2005 3.84 3.84
June 2005 3.84 190.43 194.27
July 2005 - May 2006 2.91 2.91
June 2006 2.79 43.94 46.73
July 2006 - December 2009 2.69 2.69
January 2010 2.69 113.93 116.62
February 2010 - May 2013 2.21 2.21
June 2013 2.21 24.42 26.63
July 2013 - May 2018 2.21 2.21
June 2018 2.21 162.76 164.97
July 2018 - May 2023 1.56 1.56
June 2023 1.56 162.76 164.32
July 2023 - June 2025 .78 .78
July 2025 .78 162.76 163.54
</TABLE>
Semi-annual
<TABLE>
<CAPTION>
Distribution Dates Estimated Estimated Estimated
(Each January and July Interest Principal Total
Unless Otherwise Indicated) Distribution Distribution Distribution
<S> <C> <C> <C> <C> <C> <C>
January 1996 $ 23.00 $ 23.00
July 1996 - January 2004 26.55 26.55
June 2004 $ 113.93 113.93
July 2004 26.00 26.00
January 2005 23.26 23.26
June 2005 190.43 190.43
July 2005 22.32 22.32
January 2006 17.62 17.62
June 2006 43.94 43.94
July 2006 17.29 17.29
January 2007 - July 2009 16.32 16.32
January 2010 16.32 113.93 130.25
July 2010 - January 2013 13.38 13.38
June 2013 24.42 24.42
July 2013 - January 2018 13.38 13.38
June 2018 162.76 162.76
July 2018 12.74 12.74
January 2019 - January 2023 9.47 9.47
June 2023 162.76 162.76
July 2023 8.68 8.68
January 2024 - January 2025 4.75 4.75
July 2025 4.75 162.76 167.51
</TABLE>
Tennessee IM-IT Trust
Monthly
<TABLE>
<CAPTION>
Estimated Estimated Estimated
Distribution Dates Interest Principal Total
(Each Month) Distribution Distribution Distribution
<S> <C> <C> <C> <C> <C> <C>
September 1995 $ 5.21 $ 5.21
October 1995 - May 2007 4.35 4.35
June 2007 4.34 $ 180.88 185.22
July 2007 - September 2013 3.51 3.51
October 2013 3.51 124.46 127.97
November 2013 - August 2015 2.95 2.95
September 2015 2.95 124.46 127.41
October 2015 - December 2015 2.38 2.38
January 2016 2.38 76.34 78.72
February 2016 - February 2020 2.06 2.06
March 2020 1.96 41.48 43.44
April 2020 1.86 165.95 167.81
May 2020 - May 2021 1.09 1.09
June 2021 .85 99.57 100.42
July 2021 - August 2021 .64 .64
September 2021 .64 165.95 166.59
</TABLE>
Semi-annual
<TABLE>
<CAPTION>
Distribution Dates Estimated Estimated Estimated
(Each January and July Interest Principal Total
Unless Otherwise Indicated) Distribution Distribution Distribution
<S> <C> <C> <C> <C> <C> <C>
January 1996 $ 22.78 $ 22.78
July 1996 - January 2007 26.30 26.30
June 2007 $ 180.88 180.88
July 2007 25.45 25.45
January 2008 - July 2013 21.23 21.23
October 2013 124.46 124.46
January 2014 19.55 19.55
July 2014 - July 2015 17.86 17.86
September 2015 124.46 124.46
January 2016 15.55 76.34 91.89
July 2016 - January 2020 12.48 12.48
March 2020 41.48 41.48
April 2020 165.95 165.95
July 2020 9.26 9.26
January 2021 6.64 6.64
June 2021 99.57 99.57
July 2021 5.95 5.95
September 2021 1.31 165.95 167.26
</TABLE>
No person is authorized to give any information or to make any representations
not contained in this Prospectus; and any information or representation not
contained herein must not be relied upon as having been authorized by the
Fund, the Sponsor or the Underwriters. This Prospectus does not constitute an
offer to sell, or a solicitation of an offer to buy, securities in any state
to any person to whom it is not lawful to make such offer in such state.
<TABLE>
<CAPTION>
Title Page
<S> <C>
INTRODUCTION 2
SUMMARY OF ESSENTIAL FINANCIAL INFORMATION 3
UNITHOLDER EXPLANATIONS 7
Settlement of Bonds in the Trusts 7
The Fund 7
Objectives and Securities Selection 8
Risk Factors 9
Replacement Bonds 12
Bond Redemptions 13
Distributions 14
Change of Distribution Option 14
Certificates 14
Estimated Current Returns and Estimated Long-Term Returns 15
Interest Earning Schedule 15
Calculation of Estimated Net Annual Interest Income 15
Accrued Interest 16
Accrued Interest 16
Public Offering 16
General 16
Offering Price 18
Market for Units 19
Distributions of Interest and Principal 20
Reinvestment Option 20
Redemption of Units 21
Reports Provided 22
Insurance on the Bonds in the Insured Trusts 23
IM-IT TRUST 30
COLORADO IM-IT TRUST 33
MISSOURI IM-IT TRUST 39
NEW MEXICO IM-IT TRUST 43
TENNESSEE IM-IT TRUST 47
NOTES TO PORTFOLIOS 53
UNDERWRITING 55
TRUST ADMINISTRATION 57
Fund Administration and Expenses 57
Sponsor 57
Compensation of Sponsor and Evaluator 61
Trustee 62
Trustee's Fee 62
Portfolio Administration 63
Sponsor Purchases of Units 63
Insurance Premiums 64
Miscellaneous Expenses 64
General 64
Amendment or Termination 64
Limitation on Liabilities 65
Unit Distribution 66
Sponsor and Underwriter Compensation 66
OTHER MATTERS 67
Legal Opinions 67
Independent Certified Public Accountants 67
FEDERAL TAX STATUS 67
DESCRIPTION OF SECURITIES RATINGS 71
REPORT OF INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS 73
STATEMENTS OF CONDITION 74
EQUIVALENT TAXABLE ESTIMATED CURRENT RETURN
TABLES 76
ESTIMATED CASH FLOWS TO UNITHOLDERS 78
</TABLE>
This Prospectus contains information concerning the Fund and the Sponsor, but
does not contain all of the information set forth in the registration
statements and exhibits relating thereto, which the Fund has filed with the
Securities and Exchange Commission, Washington, D.C., under the Securities Act
of 1933 and the Investment Company Act of 1940, and to which reference is
hereby made.
PROSPECTUS
July 20, 1995
Insured Municipals
Income Trust, 181st
Insured Multi-Series
IM-IT 353
Colorado IM-IT 75
Missouri IM-IT 91
New Mexico IM-IT 18
Tennessee IM-IT 32
A Wealth of Knowledge A Knowledge of Wealth(sm)
VAN KAMPEN AMERICAN CAPITAL
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
2800 Post Oak Boulevard
Houston, Texas 77056
Please retain this Prospectus for future reference.
Contents of Registration Statement
This Registration Statement comprises the following papers and documents:
The facing sheet
The Cross-Reference Sheet
The Prospectus
The signatures
The consents of independent public accountants, rating services and
legal counsel
The following exhibits:
1.1 Copy of Trust Agreement (to be supplied by amendment).
1.4 Copy of Municipal Bond Fund Portfolio Insurance Policy issued by
AMBAC Indemnity Corporation and/or Financial Guaranty Insurance
Company for each IM-IT Trust (to be supplied by amendment).
1.5 Copy of Master Agreement Among Underwriters (to be supplied by
amendment).
3.1 Opinion and consent of counsel as to legality of securities being
registered (to be supplied by amendment).
3.2 Opinion and consent of counsel as to Federal income tax status of
securities being registered (to be supplied by amendment).
3.3 Opinion and consent of counsel as to income tax status of the Fund
under New York law (to be supplied by amendment).
4.1 Consent of Interactive Data Services, Inc. (to be supplied by
amendment).
4.2 Consent of Standard & Poor's Ratings Group (to be supplied by
amendment).
4.3 Consent of Grant Thornton LLP (to be supplied by amendment).
4.4 Financial Data Schedule (to be supplied by amendment).
Signatures
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Insured Municipals Income Trust, 182nd Insured Multi-Series
has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized in the City of Chicago and
State of Illinois on the 21st day of July, 1995.
Insured Municipals Income Trust,
182nd Insured Multi-Series
(Registrant)
By Van Kampen American Capital
Distributors, Inc.
(Depositor)
By Sandra A. Waterworth
Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on July 21, 1995.
Signature Title
Don G. Powell Chairman and Chief )
Executive Officer )
William R. Rybak Senior Vice President and )
Chief Financial Officer )
Ronald A. Nyberg Director )
William R. Molinari Director )
By Sandra A. Waterworth
(Attorney-in-fact*)
________________________________________________________________________
* An executed copy of each of the related powers of attorney was filed
with the Securities and Exchange Commission in connection with the
Registration Statement on Form S-6 of Insured Municipals Income Trust
and Investors' Quality Tax-Exempt Trust, Multi-Series 203 (File No. 33-
65744) and with the Registration Statement on From S-6 of Insured
Municipals Income Trust, 170th Insured Multi-Series (File No. 33-55891)
and the same are hereby incorporated herein by this reference.
