File No. 33-58953
CIK #896910
Securities And Exchange Commission
Washington, D.C. 20549-1004
Amendment No. 1
to
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 and Investors'
Quality Tax-Exempt Trust, Multi-Series 252
B. Name of Depositor: Van Kampen American Capital Distributors, Inc.
C. Complete address of Depositor's principal executive offices:
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
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 W. Monroe Street One Parkview Plaza
Chicago, Illinois 60603 Oakbrook Terrace, Illinois 60181
E. Title and amount of securities being registered: 31,952* Units
F. Proposed maximum offering price to the public of the securities being
registered: ($1020 per Unit**): $32,591,040
G. Amount of filing fee, computed at one twenty-ninth of 1 percent of proposed
maximum aggregate offering price to the public:
$11,238.27 ($351.72 previously paid)
H. Approximate date of proposed sale to the public:
as soon as practicable after the Effective Date of the Registration Statement
/ X /: Check box if it is proposed that this filing will become effective on
May 24, 1995 pursuant to Rule 487.
21,301 Units registered for primary distribution.
10,651 Units registered for resale by Depositor of Units previously sold
in primary distribution.
** Estimated solely for the purpose of calculating the registration
fee.
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
--
Insured Municipals Income Trust and
Investors' Quality Tax-Exempt Trust
Multi-Series 252
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 ) Introduction
expenses ) Summary of Essential Financial
) Information
) Unitholder Explanations
) Trust Information
) Trust Administration
(b) Certain information regard- ) *
ing periodic payment plan )
certificates )
(c) Certain percentages ) Introduction
) Summary of Essential Financial
) Information
) Unitholder Explanations
(d) Certain other fees, ) Unitholder Explanations
expenses or charges ) Trust Administration
payable by holders )
(e) Certain profits to be ) Unitholder Explanations
received by depositor, ) Underwriting
principal underwriter, ) Notes to Portfolios
trustee or 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 distribu- ) *
tions )
(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 secusition ) Introduction
of income ) Unitholder Explanations
(b) Reinvestment of distribu- ) *
tions )
(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 ) Introduction
securities 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 ) Trust Administration
underwriter )
(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 ) Trust Administration
trustee )
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 agree- )
ment with respect to )
replacement or elimi- ) Trust Administration
nation of portfolio )
securities )
(b) Transactions involving )
elimination of underlying ) *
securities )
(c) Policy regarding substitu- ) Trust Administration
tion or 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 (Instruc- ) Other Matters
tions 1(c) to Form S-6) )
__________________________________
* Inapplicable, omitted, answer negative or not required
Preliminary Prospectus Dated May 24, 1995
Subject To Completion
May 24, 1995
Van Kampen American Capital
Insured Municipals Income Trust
and Investors' Quality Tax-Exempt Trust, Multi-Series 252
IM-IT 350 Minnesota IM-IT 56 North Carolina Quality 82
Arizona IM-IT 13 Pennsylvania IM-IT 202
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 350 (the "IM-IT"), Arizona Insured Municipals
Income Trust, Series 13 (the "Arizona IM-IT Trust"), Minnesota Insured
Municipals Income Trust, Series 56 (the "Minnesota IM-IT Trust"), Pennsylvania
Insured Municipals Income Trust, Series 202 (the "Pennsylvania IM-IT Trust")
and North Carolina Investors' Quality Tax-Exempt Trust, Series 82 (the "North
Carolina Quality Trust"). The various trusts are collectively referred to
herein as the "Trusts". The Arizona IM-IT, Minnesota IM-IT, Pennsylvania IM-IT
and North Carolina Quality Trusts are sometimes collectively referred to
herein as the "State Trusts", while the IM-IT, Arizona IM-IT, Minnesota IM-IT
and Pennsylvania IM-IT Trusts are sometimes collectively referred to herein as
the "Insured Trusts"and the North Carolina Quality Trust is sometimes referred
to herein as the "Quality Trust". 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 Only. 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 Ratings
Group. Standard & Poor's Ratings Group 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
and the Pennsylvania IM-IT Trusts 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 and
the Pennsylvania IM-IT Trusts 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
AND INVESTORS' QUALITY TAX-EXEMPT TRUST, Multi-Series 252
Summary of Essential Financial Information
At the Close of Business on the day before the Date of Deposit:
May 23, 1995
(except for the IM-IT and the Pennsylvania IM-IT Trusts as of 8:00 A.M. Central Time
on the Date of Deposit: May 24, 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>
Arizona Minnesota
GENERAL INFORMATION IM-IT IM-IT Trust IM-IT Trust
<S> <C> <C> <C>
Principal Amount (Par Value) of Securities in Trust <F1>............................... $ 9,070,000 $ 3,000,000 $ 2,985,000
Number of Units........................................................................ 9,070 3,061 3,033
Fractional Undivided Interest in the Trust per Unit.................................... 1/9,070 1/3,061 1/3,033
Principal Amount (Par Value) of Securities per Unit <F2>............................... $ 1,000.00 $ 980.07 $ 984.17
Public Offering Price: ................................................................
Aggregate Offering Price of Securities in Portfolio................................... $ 8,625,604 $ 2,911,024 $ 2,884,403
Aggregate Offering Price of Securities per Unit....................................... $ 951.00 $ 951.00 $ 951.01
Sales Charge <F3>..................................................................... $ 49.00 $ 49.00 $ 48.99
Public Offering Price per Unit <F4>................................................... $ 1,000.00 $ 1,000.00 $ 1,000.00
Redemption Price per Unit <F4>......................................................... $ 943.51 $ 943.88 $ 943.93
Secondary Market Repurchase Price per Unit <F4>........................................ $ 951.00 $ 951.00 $ 951.01
Excess of Public Offering Price per Unit Over Redemption Price per Unit................ $ 56.49 $ 56.12 $ 56.07
Excess of Sponsor's Initial Repurchase Price per Unit Over Redemption Price per Unit... $ 7.49 $ 7.12 $ 7.08
Minimum Value of the Trust under which Trust Agreement may be terminated............... $ 1,814,000 $ 600,000 $ 597,000
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Minimum Principal Distribution........... $1.00 per Unit
First Settlement Date.................... June 1, 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%) and 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 five
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
AND INVESTORS' QUALITY TAX-EXEMPT TRUST, Multi-Series 252
Summary of Essential Financial Information
At the Close of Business on the day before the Date of Deposit:
May 23, 1995
(except for the IM-IT and the Pennsylvania IM-IT Trusts as of 8:00 A.M. Central Time
on the Date of Deposit: May 24, 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>
Pennsylvania North Carolina
GENERAL INFORMATION IM-IT Trust Quality Trust
<S> <C> <C>
Principal Amount (Par Value) of Securities in Trust <F1>............................... $ 3,050,000 $ 2,945,000
Number of Units........................................................................ 3,120 3,017
Fractional Undivided Interest in the Trust per Unit.................................... 1/3,120 1/3,017
Principal Amount (Par Value) of Securities per Unit <F2>............................... $ 977.56 $ 976.14
Public Offering Price: ................................................................
Aggregate Offering Price of Securities in Portfolio................................... $ 2,967,136 $ 2,869,182
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>......................................................... $ 943.47 $ 943.50
Secondary Market Repurchase Price per Unit <F4>........................................ $ 951.00 $ 951.00
Excess of Public Offering Price per Unit Over Redemption Price per Unit................ $ 56.53 $ 56.50
Excess of Sponsor's Initial Repurchase Price per Unit Over Redemption Price per Unit... $ 7.53 $ 7.50
Minimum Value of the Trust under which Trust Agreement may be terminated............... $ 610,000 $ 589,000
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Minimum Principal Distribution........... $1.00 per Unit
First Settlement Date.................... June 1, 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%) and 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 five
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 and Investors' Quality Tax-Exempt
Trust, Multi-Series 252 (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
Ratings Group ("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
and "A-"in the case of the Quality 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 and "A"in the case of the Quality 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 and "A-"or better in the case of the Quality Trusts by Standard &
Poor's or "Baa"or better in the case of the Insured Trusts and "A"or better in
the case of the Quality 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 and the Pennsylvania IM-IT Trusts 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 June 1, 1995. The first monthly
record date for each Trust (July 1, 1995) is 30 days from such date. The daily
rates of estimated net annual interest income per Unit accrued on a monthly
basis are $.15030, $.14701, $.14449, $.14655 and $.14825 for the IM-IT,
Arizona IM-IT, Minnesota IM-IT, Pennsylvania IM-IT and North Carolina Quality
Trusts, respectively. This amounts to $4.51, $4.41, $4.33, $4.40 and $4.45 for
the IM-IT, Arizona IM-IT, Minnesota IM-IT, Pennsylvania IM-IT and North
Carolina Quality 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 Arizona IM-IT Trust:
The Arizona IM-IT Trust accrues $4.41 to the first record date plus
$44.10 which is 10 normal distributions at $4.41, and finally adding
$4.42 which has accrued from May 1, 1996 until June 1, 1996 which completes
the 360 day cycle (30 days times the daily factor)
Total $52.93 interest earned / $1,000.00 (Date of Deposit Public Offering
Price) = 5.29% 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
<S> <C> <C>
Aggregate Number of
Units Purchased IM-IT,
State and
National
Quality Other
Trusts Trusts
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 and the Pennsylvania IM-IT Trusts 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 and the Pennsylvania
IM-IT Trusts 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 five 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 five 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 seventh calendar day following such
tender, or if the seventh calendar day is not a business day, on the first
business day prior thereto, 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 and the Commonwealth of Puerto Rico. As of
September 30, 1994 MBIA had admitted assets of $3.3 billion (unaudited), total
liabilities of $2.2 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. 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 December 31,
1994, the total capital and surplus of Financial Guaranty was approximately
$893,700,000. 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. ("Moody's"), "AAA"by Standard & Poor's Ratings Group ("Standard &
Poor's"), "AAA"by Duff & Phelps Credit Rating Co. ("Duff & Phelps") 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.
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%
Arizona IM-IT........ -- -- 100% 100%
Minnesota IM-IT...... -- -- 100% 100%
Pennsylvania IM-IT... -- -- 100% 100%
</TABLE>
The breakdown of the Preinsured Bonds is as follows: IM-IT-- AMBAC Indemnity
22%, Capital Guaranty 8%, Financial Guaranty 15%, MBIA 44% and FSA 11%;
Arizona IM-IT Trust-- AMBAC Indemnity 48%, Financial Guaranty 34% and MBIA
18%; Minnesota IM-IT Trust-- AMBAC Indemnity 25%, Capital Guaranty 25% and
MBIA 50%; Pennsylvania IM-IT Trust-- AMBAC Indemnity 31%, Financial Guaranty
36% and MBIA 33%.
IM-IT
General. The IM-IT consists of 15 issues of Securities. One of the Bonds in
the IM-IT is a general obligation of the governmental entity issuing it and is
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 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 (25%); Health Care, 2 (22%);
Water and Sewer, 3 (17%); General Purpose, 3 (10%); General Obligations, 1
(8%); Higher Education, 1 (8%); Certificates of Participation, 1 (6%) and Tax
District, 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-
Per Unit Information: Monthly Annual
<S> <C> <C>
Calculation of Estimated Net Annual Unit Income <F1>:
Estimated Annual Interest Income per Unit................................. $ 55.72 $ 55.72
Less: Estimated Annual Expense per Unit <F2>.............................. $ 1.61 $ 1.13
Less: Annual Premium on Portfolio Insurance per Unit...................... -- --
Estimated Net Annual Interest Income per Unit............................. $ 54.11 $ 54.59
Calculation of Estimated Interest Earnings per Unit:
Estimated Net Annual Interest Income per Unit............................. $ 54.11 $ 54.59
Divided by 12 and 2, respectively......................................... $ 4.51 $ 27.30
Estimated Daily Rate of Net Interest Accrual per Unit...................... $ .15030 $ .15163
Estimated Current Return Based on Public Offering Price <F1><F3><F4><F5>... 5.41% 5.46%
Estimated Long-Term Return <F3><F4><F5>.................................... 5.47% 5.51%
Estimated Initial Monthly Distribution (July 1995)......................... $ 4.51
Estimated Initial Semi-annual Distribution (December 1995)................. $ 27.29
Estimated Normal Distribution per Unit <F5>................................ $ 4.51 $ 27.30
</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 July 15, 1995
<FN>
<F1>During the first year the Trustee will reduce its fee by approximately $.61
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 $56.33. Estimated Annual Expense per Unit (excluding
insurance) will be increased to $2.22 and $1.74 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 350
(IM-IT AND QUALITY MULTI-SERIES 252)
PORTFOLIO As of May 24, 1995
<CAPTION>
Name of Issuer, Title, Interest Rate andMaturity Offering
Aggregate Date of either Bonds Deposited orBonds Contracted Redemption Price To
Principal<F1> for<F1><F5> Rating<F2> Feature<F3> IM-IT<F4>
<S> <C> <C> <C> <C> <C>
$ 250,000 Ontario, California, Redevelopment Financing
Authority (Center City and Cimarron Project) Series 2003 @ 102
1993 (MBIA Insured) #6.00% Due 8/1/2015............. AAA 2009 @ 100 S.F. $ 252,168
320,000 City of Bloomington (Monroe County, Indiana) Sewage
Works Revenue Bonds, Series 1995 (MBIA Insured) 2005 @ 102
#5.75% Due 1/1/2016.................................. AAA 2014 @ 100 S.F. 312,195
700,000 School Building Corporation of Lawrence Township
(Indiana) First Mortgage General Obligation Bonds
(Unlimited Tax) Series 1995 (Capital Guaranty 2004 @ 101
Insured) #5.90% Due 1/15/2017....................... AAA 2014 @ 100 S.F. 695,023
500,000 Rohnert Park, California, Refunding Certificates of
Participation (Rohnert Park Public Safety Facilities 2003 @ 102
Project) MBIA Insured #4.75% Due 7/1/2017........... AAA 2010 @ 100 S.F. 424,645
200,000 Department of Water and Power of the City of Los
Angeles, California, Water Works Revenue Bonds, 2005 @ 102
Issue of 1995 (FGIC Insured) #6.125% Due 5/15/2020.. AAA 2016 @ 100 S.F. 203,956
1,000,000 City of Rio Rancho, New Mexico, Water and Wastewater
System Revenue Bonds, Series 1995A (FSA Insured)** 2006 @ 100
#6.00% Due 5/15/2022................................. AAA 2016 @ 100 S.F. 1,004,510
250,000 Metropolitan Pier and Exposition Authority
(Illinois) McCormick Place Expansion Project
Refunding Bonds, Series 1994A (MBIA Insured) #0.00%
Due 6/15/2022........................................ AAA 47,582 <F6>
200,000 Municipal Authority of Westmoreland County
(Westmoreland County, Pennsylvania) Municipal
Service Revenue Bonds, Series 1993C (FGIC Insured)
#0.00% Due 8/15/2022................................. AAA 38,688 <F6>
500,000 Paramount Redevelopment Agency (Los Angeles County,
California) Redevelopment Project Area No.1, Tax
Allocation Refunding Bonds, Issue of 1993 (MBIA 2003 @ 102
Insured) 6.25% Due 8/1/2023......................... AAA 2016 @ 100 S.F. 515,305
400,000 Brea Redevelopment Agency (Orange County,
California) 1993 Tax Allocation Refunding Revenue
Bonds (Redevelopment Project AB) MBIA Insured 2003 @ 102
#5.75% Due 8/1/2023.................................. AAA 2018 @ 100 S.F. 391,092
1,000,000 Illinois Health Facilities Authority, Revenue Bonds
(Ingalls Health System Project) Series 1994 (MBIA 2004 @ 102
Insured) #6.25% Due 5/15/2024....................... AAA 2015 @ 100 S.F. 1,016,820
1,000,000 Louisiana Stadium & Exposition District, Hotel
Occupancy Tax & Stadium Revenue Refunding Bonds, 2004 @ 102
Series 1994A (FGIC Insured) #6.00% Due 7/1/2024..... AAA 2017 @ 100 S.F. 1,005,000
Name of Issuer, Title, Interest Rate andMaturity Offering
Aggregate Date of either Bonds Deposited orBonds Contracted Price To
Principal<F1> for<F1><F5> Rating<F2> Redemption Feature<F3> IM-IT<F4>
$ 1,000,000 Natrona County, Wyoming, Hospital Revenue Bonds
(Wyoming Medical Center Project) Series 1995 (AMBAC 2006 @ 101
Indemnity Insured)** #6.00% Due 9/15/2024........... AAA 2016 @ 100 S.F. $ 998,060
750,000 South Dakota Board of Regents, Dakota State
University, Housing and Auxiliary Facilities Revenue
Bonds, Series 1995 (MBIA Insured) #6.125% Due 2005 @ 100
4/1/2025............................................. AAA 2010 @ 100 S.F. 757,800
1,000,000 Rhode Island Convention Center Authority, Revenue
Bonds, Series 1993A (AMBAC Indemnity Insured) 2003 @ 102
#5.75% Due 5/15/2027................................. AAA 2021 @ 100 S.F. 962,760
$ 9,070,000 $ 8,625,604
</TABLE>
All of the Bonds in the portfolio are insured by one of the Preinsured Bond
Insurers as indicated in the Bond name. 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".
ARIZONA IM-IT TRUST
General. The Arizona IM-IT Trust consists of 11 issues of Securities. One of
the Bonds in the Arizona IM-IT Trust is a general obligation of the
governmental entity issuing it and is 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 Arizona IM-IT Trust) as follows: Industrial Revenue, 2 (34%); General
Purpose, 4 (25%); Multi-Family Mortgage Revenue, 1 (17%); Water and Sewer, 1
(17%); General Obligations, 1 (3%); Higher Education, 1 (2%) and
Transportation, 1 (2%). No Bond issue has received a provisional rating.
Risk Factors. The following brief summary regarding the economy of Arizona is
based upon information drawn from publicly available sources and is included
for the purpose of providing the information about general economic conditions
that may or may not affect issuers of the Arizona Bonds. The Sponsor has not
independently verified any of the information contained in such publicly
available documents.
Arizona is the nation's sixth largest state in terms of area. Arizona's main
economic sectors include services, tourism and manufacturing. Mining and
agriculture are also significant, although they tend to be more capital than
labor intensive. Services is the single largest economic sector. Many of these
jobs are directly related to tourism.
The unemployment rate in Arizona for 1993 was 6.2% and for 1992 was 7.4%
compared to a national rate of 6.8% in 1993 and 7.4% in 1992. Job growth may
be adversely affected by the closing of a major air force base near Phoenix
and the bankruptcy of several major employers, including America West Airlines.
In 1986, the value of Arizona real estate began a steady decline, reflecting a
market which had been overbuilt in the previous decade with a resulting
surplus of completed inventory. This decline adversely affected both the
construction industry and those Arizona financial institutions which had
aggressively pursued many facets of real estate lending. In the near future,
Arizona's financial institutions are likely to continue to experience problems
until the excess inventories of commercial and residential properties are
absorbed. The problems of the financial institutions have adversely affected
employment and economic activity. Longer-term prospects are brighter. Arizona
has been, and is projected to continue to be, one of the fastest growing areas
in the United States. Over the last several decades the State has outpaced
most other regions of the country in virtually every major category of growth,
including population, personal income, gross state product and job creation.
The state operates on a fiscal year beginning July 1 and ending June 30.
Fiscal year 1995 refers to the year ended June 30, 1995.
Total General Fund revenues of $4.3 billion are expected during fiscal year
1995. Approximately 44.5% of this budgeted revenue comes from sales and use
taxes, 44.4% from income taxes (both individual and corporate) and 4.4% from
property taxes. All taxes total approximately $4.0 billion, or 93% of General
Fund revenues. Non-tax revenue includes items such as income from the state
lottery, licenses, fees and permits, and interest.
For fiscal year 1994, the budget called for expenditures of approximately $4.1
billion. These expenditures fell into the following major categories:
education (47.4%), health and welfare (26.3%), protection and safety (4.0%),
general government (15.5%) and inspection and regulation, natural resources,
transportation and other (6.8%). The States's general fund expenditures for
fiscal year 1995 are budgeted at approximately $4.7 billion.
Most or all of the Bonds of the Arizona Trust are not obligations of the State
of Arizona, and are not supported by the State's taxing powers. The particular
source of payment and security for each of the Bonds is detailed in the
instruments themselves and in related offering materials. There can be no
assurances, however, with respect to whether the market value or marketability
of any of the Bonds issued by an entity other than the State of Arizona will
be affected by the financial or other condition of the State or of any entity
located within the State. In addition, it should be noted that the State of
Arizona, as well as counties, municipalities, political subdivisions and other
public authorities of the state, are subject to limitations imposed by
Arizona's constitution with respect to ad valorem taxation, bonded
indebtedness and other matters. For example, the state legislature cannot
appropriate revenues in excess of 7% of the total personal income of the state
in any fiscal year. These limitations may affect the ability of the issuers to
generate revenues to satisfy their debt obligations.
On July 21, 1994, the Arizona Supreme Court rendered its opinion in Roosevelt
Elementary School District Number 66, et al v. Dianne Bishop, et al (the
"Roosevelt Opinion"). In this opinion, the Arizona Supreme Court held that the
present statutory financing scheme for public education in the State of
Arizona does not comply with the Arizona constitution. Subsequently, the
Arizona School Boards Association, with the approval of the appellants and the
appellees to the Roosevelt Opinion, and certain Arizona school districts,
filed with the Arizona Supreme court motions for clarification of the
Roosevelt Opinion, specifically with respect to seeking prospective
application of the Roosevelt Opinion. On July 29, 1994, the Arizona Supreme
Court clarified the Roosevelt Opinion to hold that such opinion will have
prospective effect only.
Certain other circumstances are relevant to the market value, marketability
and payment of any hospital and health care revenue bonds in the Arizona
Trust. The Arizona Legislature has in the past sought to enact health care
cost control legislation. Certain other health care regulatory laws have
expired. It is expected that the Arizona legislature will at future sessions
continue to attempt to adopt legislation concerning health care cost control
and related regulatory matters. The effect of any such legislation or of the
continued absence of any legislation restricting hospital bed increased and
limiting new hospital construction on the ability of Arizona hospitals and
other health care providers to pay debt service on their revenue bonds cannot
be determined at this time.
Arizona does not participate in the federally administered Medicaid program.
Instead, the state administers an alternative program, Arizona Health Care
Cost Containment System ("AHCCCS"), which provides health care to indigent
persons meeting certain financial eligibility requirements, through managed
care programs. In fiscal year 1994, AHCCCS was financed approximately 60% by
federal funds, 29% by state funds, and 11% by county funds.
Under state law, hospitals retain the authority to raise with notification and
review by, but not approval from, the Department of Health Services. Hospitals
in Arizona have experienced profitability problems along with those in other
states. At least two Phoenix based hospitals have defaulted on or reported
difficulties in meeting their bond obligations in recent years.
Insofar as tax-exempt Arizona public utility pollution control revenue bonds
are concerned, the issuance of such bonds and the periodic rate increases
needed to cover operation costs and debt service are subject to regulation by
the Arizona Corporation Commission, the only significant exception being the
Salt River Project Agricultural Improvement and Power District which, as a
Federal instrumentality, is exempt from rate regulation. On July 15, 1991,
several creditors of Tucson Electric Power Company ("Tucson Electric") filed
involuntary petitions under Chapter 11 of the U.S. Bankruptcy Code to force
Tucson Power to reorganize under the supervision of the bankruptcy court. On
December 31, 1991, the Bankruptcy Court approved the utility's motion to
dismiss the July petition after five months of negotiations between Tucson
Electric and its creditors to restructure the utility's debts and other
obligations. In December 1992, Tucson Electric announced that it had completed
its financial restructuring. In January 1993, Tucson Electric asked the
Arizona Corporation Commission for a 9.3% average rate increase. Tucson
Electric serves approximately 270,000 customers, primarily in the Tucson area.
Inability of any regulated public utility to secure necessary rate increases
could adversely affect, to an indeterminable extent, its ability to pay debt
service on its pollution control revenue bonds.
Based on a recent U.S. Supreme Court ruling, the State has determined to
refund $197 million, including statutory interest, in State income taxes
previously collected from Federal retirees on their pensions. This payment
will be made over a four-year period beginning with approximately $14.6
million in tax refunds in fiscal year 1994. A combination of tax refunds and
tax credits will be used to satisfy this liability.
Tax Status. For a discussion of the Federal tax status of income earned on
Arizona IM-IT Trust Units, see "Other Matters--Federal Tax Status".
The assets of the Trust will consist of interest-bearing obligations issued by
or on behalf of the State of Arizona (the "State"), its political subdivisions
and authorities (the "Bonds"), provided the interest on such Bonds received by
the Trust is exempt from State income taxes.
In the opinion of Chapman and Cutler counsel to the Sponsor, under existing
law:
For Arizona income tax purposes, each Unitholder will be treated as the owner
of a pro rata portion of the Arizona IM-IT Trust, and the income of the Trust
therefore will be treated as the income of the Unitholder under State law.
For Arizona income tax purposes, interest on the Bonds which is excludable
from Federal gross income and which is exempt from Arizona income taxes when
received by the Arizona IM-IT Trust, and which would be excludable from
Federal gross income and exempt from Arizona income taxes if received directly
by a Unitholder, will retain its status as tax-exempt interest when received
by the Arizona IM-IT Trust and distributed to the Unitholders.
To the extent that interest derived from the Arizona IM-IT Trust by a
Unitholder with respect to the Bonds is excludable from Federal gross income,
such interest will not be subject to Arizona income taxes.
Each Unitholder will receive taxable gain or loss for Arizona income tax
purposes when Bonds held in the Arizona IM-IT Trust are sold, exchanged,
redeemed or paid at maturity, or when the 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 Unitholder's share of interest, if
any, accruing on Bonds during the interval between the Unitholder's settlement
date and the date such Bonds are delivered to the Arizona IM-IT Trust, if
later.
Amounts paid by the Insurer under an insurance policy or policies issued to
the Trust, if any, with respect to the Bonds in the Trust which represent
maturing interest on defaulted obligations held by the Trustee will be exempt
from State income taxes if, and to the same extent as, such interest would
have been so exempt 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 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 Bonds,
rather than the insurer, will pa debt service on the Bonds.
Arizona law does not permit a deduction for interest paid or incurred on
indebtedness incurred or continued to purchase or carry Units in the Arizona
IM-IT Trust, the interest on which is exempt from Arizona income taxes.
Neither the Bonds nor the Units will be subject to Arizona property taxes,
sales tax or use tax.
<TABLE>
<CAPTION>
Semi-
Per Unit Information: Monthly Annual
<S> <C> <C>
Calculation of Estimated Net Annual Unit Income <F1>:
Estimated Annual Interest Income per Unit................................. $ 55.23 $ 55.23
Less: Estimated Annual Expense per Unit <F2>.............................. $ 2.30 $ 1.84
Less: Annual Premium on Portfolio Insurance per Unit...................... -- --
Estimated Net Annual Interest Income per Unit............................. $ 52.93 $ 53.39
Calculation of Estimated Interest Earnings per Unit:
Estimated Net Annual Interest Income per Unit............................. $ 52.93 $ 53.39
Divided by 12 and 2, respectively......................................... $ 4.41 $ 26.70
Estimated Daily Rate of Net Interest Accrual per Unit...................... $ .14701 $ .14829
Estimated Current Return Based on Public Offering Price <F1><F3><F4><F5>... 5.29% 5.34%
Estimated Long-Term Return <F3><F4><F5>.................................... 5.26% 5.30%
Estimated Initial Monthly Distribution (July 1995)......................... $ 4.41
Estimated Initial Semi-annual Distribution (July 1995)..................... $ 4.44
Estimated Normal Distribution per Unit <F5>................................ $ 4.41 $ 26.70
</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
Arizona 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 July 15, 1995
<FN>
<F1>During the first year the Trustee will reduce its fee by approximately $.12
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 $55.35. Estimated Annual Expense per Unit (excluding
insurance) will be increased to $2.42 and $1.96 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>
ARIZONA INSURED MUNICIPALS INCOME TRUST
SERIES 13
(IM-IT AND QUALITY MULTI-SERIES 252)
PORTFOLIO As of May 24, 1995
<CAPTION>
Offering
Price To
Aggregate Name of Issuer, Title, Interest Rate andMaturity Date of Redemption Minnesota
Principal<F1> either Bonds Deposited orBonds Contracted for<F1><F5> Rating<F2> Feature<F3> IM-IT Trust<F4>
<S> <C> <C> <C> <C> <C>
$ 460,000 Town of Prescott Valley, Arizona, Municipal Property
Corporation, Municipal Facilities Revenue Bonds, Series AAA 2005 @ 101 153,266
1995B (FGIC Insured)** #150M-5.85% Due 1/1/2009 AAA 2005 @ 101 163,476
#160M-5.90% Due 1/1/2010 #150M-5.95% Due 1/1/2011.......... AAA 2005 @ 101 $ 153,888
100,000 Catalina Foothills Unified School District No.16 of Pima
County, Arizona, School Improvement Bonds, Project of
1994, Series A (1995) AMBAC Indemnity Insured
#5.70% Due 7/1/2010........................................ AAA 2005 @ 101 100,500
55,000 University of Puerto Rico, Revenue Refunding Bonds, Series
1995N (MBIA Insured) #0.00% Due 6/1/2013.................. AAA 20,227 <F6>
50,000 City of Phoenix, Arizona, Junior Lien Street and Highway
User Revenue Refunding Bonds, Series 1992A (FGIC Insured)
#0.00% Due 7/1/2013........................................ AAA 17,518 <F6>
300,000 Sierra Vista, Arizona, Municipal Property Corporation,
Municipal Facilities Revenue Bonds (Bank Qualified) Series 2005 @ 101
1995 (AMBAC Indemnity Insured)
6.15% Due 1/1/2015......................................... AAA 2012 @ 100 S.F. 311,529
535,000 Maricopa County, Arizona, Industrial Development
Authority, Health Facilities Revenue Bonds, Evangelical
Lutheran Good Samaritan Project (AMBAC Indemnity Insured) 2003 @ 102
#5.35% Due 12/1/2018....................................... AAA 2007 @ 100 S.F. 504,665
500,000 Phoenix Housing Finance Corporation, Arizona, Tax-Exempt
Mortgage Revenue Refunding Bonds, Series 1995A (FHA
Insured Mortgage Loans-Section 8 Assisted Projects) MBIA 2003 @ 100
Insured 6.90% Due 1/1/2023................................ AAA 2005 @ 100 S.F. 527,500
500,000 Phoenix, Arizona, Civic Improvement Corporation, Junior
Lien Water System Revenue Bonds, Series 1994 (FGIC 2004 @ 102
Insured) #5.50% Due 7/1/2024.............................. AAA 2022 @ 100 S.F. 481,510
500,000 Navajo County, Arizona, Pollution Control Corporation,
Revenue Refunding Bonds (Arizona Public Service Company)
Series 1993A (AMBAC Indemnity Insured)
#5.50% Due 8/15/2028....................................... AAA 2003 @ 102 476,945
$ 3,000,000 $ 2,911,024
</TABLE>
All of the Bonds in the portfolio are insured by one of the Preinsured Bond
Insurers as indicated in the Bond name. See "Unitholder ExplanationsInsurance
on the Bonds in the Insured Trusts".
For an explanation of the footnotes used on this page, see "Notes to
Portfolios".
MINNESOTA IM-IT TRUST
General. The Minnesota IM-IT Trust consists of 11 issues of Securities. One of
the Bonds in the Minnesota IM-IT Trust is a general obligation of the
governmental entity issuing it and is 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 Minnesota IM-IT Trust) as follows: Health Care, 4 (34%); Public
Education, 3 (31%); Public Building, 1 (17%); Retail Electric/Gas, 1 (13%);
General Obligations, 1 (3%) and Wholesale Electric, 1 (2%). No Bond issue has
received a provisional rating.
Risk Factors. In the early 1980's the State of Minnesota experienced financial
difficulties due to a downturn in the State's economy resulting from the
national recession. As a consequence, the State's revenues were significantly
lower than anticipated in the July 1, 1979 to June 30, 1981 biennium and the
July 1, 1981 to June 30, 1983 biennium.
In response to revenue shortfalls, the legislature broadened and increased the
State sales tax, increased income taxes (by increasing rates and eliminating
deductions) and reduced appropriations and deferred payment of State aid,
including appropriations for and aids to local governmental units. The State's
fiscal problems affected other governmental units within the State, such as
local government, school districts and state agencies, which, in varying
degrees, also faced cash flow difficulties. In certain cases, revenues of
local governmental units and agencies were reduced by the recession.
Because of the State's fiscal problems, Standard & Poor's Corporation reduced
its rating on the State's outstanding general obligation bonds from AAA to AA+
in August 1981 and to AA in March 1982. Moody's Investors Service, Inc.
lowered its rating on the State's outstanding general obligation bonds from
Aaa to Aa in April 1982. The State's economy recovered in the July 1, 1983 to
June 30, 1985 biennium, and substantial reductions in the individual income
tax were enacted in 1984 and 1985. Standard & Poor's raised its rating on the
State's outstanding general obligation bonds to AA+ in January 1985. In 1986,
1987, 1991, 1992 and 1993, legislation was required to eliminate projected
budget deficits by raising additional revenue, reducing expenditures,
including aids to political subdivisions and higher education, reducing the
State's budget reserve (cash flow account), imposing a sales tax on purchases
by local governmental units, and making other budgetary adjustments. A budget
forecast released by the Minnesota Department of Finance on March 1, 1994
projects a balanced General Fund at the end of the current biennium, June 30,
1995, plus an increase in the State's cash flow account from $360 million to
$500 million. Total projected expenditures and transfers for the biennium are
$17.0 billion. The forecast also projects, however, a shortage of $29.5
million in the Local Government Trust Fund at June 30, 1995, against total
projected expenditures from the Fund of $1.8 billion for the biennium.
State grants and aids represent a large percentage of the total revenues of
cities, towns, counties and school districts in Minnesota. Even with respect
to Bonds that are revenue obligations of the issuer and not general
obligations of the State, there can be no assurance that the fiscal problems
referred to above will not adversely affect the market value or marketability
of the Bonds or the ability of the respective obligors to pay interest on and
principal of the Bonds.
Tax Status. For a discussion of the Federal tax status of income earned on
Minnesota IM-IT Trust Units, see "Other Matters--Federal Tax Status".
We understand that the Minnesota Trust will only have income consisting of (i)
interest from bonds issued by the State of Minnesota and its political and
governmental subdivisions, municipalities and governmental agencies and
instrumentalities and bonds issued by possessions of the United States which
would be exempt from federal and Minnesota income taxation when paid directly
to an individual, trust or estate (the "Bonds"), (ii) gain on the disposition
of such Bonds, and (iii) proceeds paid under certain insurance policies issued
to the Trustee or to the issuers of the Bonds which represent maturing
interest or principal payments on defaulted Bonds held by the Trustee.
Neither the Sponsor nor its counsel have independently examined the Bonds to
be deposited in and held in the 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 excludible from gross income
for federal income tax purposes and (iii) the interest thereon is exempt from
income tax imposed by Minnesota that is applicable to individuals, trusts and
estates (the "Minnesota Income Tax"). It should be noted that interest on the
Bonds is subject to tax in the case of corporations subject to the Minnesota
Corporate Franchise Tax or the Corporate Alternative Minimum Tax and is a
factor in the computation of the Minimum Fee applicable to financial
institutions. The opinion set forth below does not address the taxation of
persons other than full time residents of Minnesota.
The Minnesota State Legislature recently enacted legislation that provides
that interest received on certain Minnesota municipal bonds issued on or
after July 1, 1995 will be subject to Minnesota income taxation. The
Governor of Minnesota must sign the legislation in order to make it law.
No prediction can be made regarding whether the Governor will sign such
legislation. Unitholders are advised to consult their own tax advisors
regarding the tax consequences regarding this legislation.
In the opinion of Chapman and Cutler, Counsel to the Sponsor, under existing
Minnesota income tax law as of the date of this prospectus and based upon the
assumptions above:
(1)The Minnesota Trust is not an association taxable as a corporation and each
Unitholder of the Minnesota Trust will be treated as the owner of a pro rata
portion of the Minnesota Trust, and the income of such portion of the
Minnesota Trust will therefore be treated as the income of the Unitholder for
Minnesota Income Tax purposes;
(2)Income on the Bonds which is exempt from the Minnesota Income Tax when
received by a Unitholder of the Minnesota Trust and which would be exempt from
the Minnesota Income Tax if received directly by a Unitholder, will retain its
status as exempt from such tax when received by the Minnesota Trust and
distributed to such Unitholder;
(3)To the extent that interest on the Bonds, if any, which is includible in
the computation of "alternative minimum taxable income"for federal income tax
purposes, such interest will also be includible in the computation of
"alternative minimum taxable income"for purposes of the Minnesota Alternative
Minimum Tax imposed on individuals, estates and trusts and on corporations;
(4)Each Unitholder of the Minnesota Trust will recognize gain or loss for
Minnesota 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 Minnesota Trust to the extent that such a transaction results in a
recognized gain or loss to such Unitholder for federal income tax purposes;
(5)Tax cost reduction requirements relating to amortization of bond premium
may, under some circumstances, result in Unitholders realizing taxable gain
for Minnesota Income Tax purposes when their Units are sold or redeemed for an
amount equal to or less than their original cost;
(6)Proceeds, if any, paid under individual insurance policies obtained by
issuers of Bonds or the Trustee which represent maturing interest on defaulted
obligations held by the Trustee will be excludible from Minnesota net income
if, and to the same extent as, such interest would have been so excludible
from Minnesota net income if, and to the same extent as, such interest would
have been so excludible if paid in the normal course by the issuer of the
defaulted obligation 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 bonds, rather than the
insurer, will pay debt service on the bonds; and
(7)To the extent that interest derived from the Minnesota Trust by a
Unitholder with respect to any Possession Bonds is excludible 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 will not be
subject to either the Minnesota Income Tax or the Minnesota alternative
minimum tax imposed on individuals, estates and trusts. It should be noted
that interest relating to Possession Bonds is subject to tax in the case of
corporations subject to the Minnesota Corporate Franchise Tax or the Corporate
Alternative Minimum Tax.
We have not examined any of the Bonds to be deposited and held in the
Minnesota Trust or the proceedings for the issuance thereof or the opinions of
bond counsel with respect thereto, and therefore express no opinions to the
exemption from State income taxes of interest on the Bonds if received
directly by a Unitholder.
<TABLE>
<CAPTION>
Semi-
Per Unit Information: Monthly Annual
<S> <C> <C>
Calculation of Estimated Net Annual Unit Income <F1>:
Estimated Annual Interest Income per Unit................................. $ 53.87 $ 53.87
Less: Estimated Annual Expense per Unit <F2>.............................. $ 1.85 $ 1.46
Less: Annual Premium on Portfolio Insurance per Unit...................... -- --
Estimated Net Annual Interest Income per Unit............................. $ 52.02 $ 52.41
Calculation of Estimated Interest Earnings per Unit:
Estimated Net Annual Interest Income per Unit............................. $ 52.02 $ 52.41
Divided by 12 and 2, respectively......................................... $ 4.34 $ 26.21
Estimated Daily Rate of Net Interest Accrual per Unit...................... $ .14449 $ .14556
Estimated Current Return Based on Public Offering Price <F1><F3><F4><F5>... 5.20% 5.24%
Estimated Long-Term Return <F3><F4><F5>.................................... 5.26% 5.30%
Estimated Initial Monthly Distribution (July 1995)......................... $ 4.33
Estimated Initial Semi-annual Distribution (July 1995)..................... $ 4.36
Estimated Normal Distribution per Unit <F5>................................ $ 4.34 $ 26.21
</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
Minnesota 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 July 15, 1995
<FN>
<F1>During the first year the Trustee will reduce its fee by approximately $.59
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 $54.46. Estimated Annual Expense per Unit (excluding
insurance) will be increased to $2.44 and $2.05 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>
MINNESOTA INSURED MUNICIPALS INCOME TRUST
SERIES 56
(IM-IT AND QUALITY MULTI-SERIES 252)
PORTFOLIO As of May 24, 1995
<CAPTION>
Offering
Price To
Aggregate Name of Issuer, Title, Interest Rate andMaturity Date of Redemption Minnesota
Principal<F1> either Bonds Deposited orBonds Contracted for<F1><F5> Rating<F2> Feature<F3> IM-IT Trust<F4>
<S> <C> <C> <C> <C> <C>
$ 535,000 Mahtomedi, Minnesota, Independent School District No. 832, 2005 @ 100 $ 154,936
Unlimited Tax- General Obligation School Building Bonds, AAA 2005 @ 100 279,832
Series 1995A (MBIA Insured)** #155M-5.70% Due 2/1/2012 AAA 2005 @ 100 99,878
#280M-5.70% Due 2/1/2013 #100M-5.75% Due 2/1/2017........... AAA 2014 @ 100 S.F
500,000 Kasson and Mantorville, Minnesota, Independent School
District No.204, Unlimited Tax-General Obligation School
Building Bonds, Series 1995A (MBIA Insured)** 5.75% Due
2/1/2013.................................................... AAA 2004 @ 100 503,165
500,000 Benton County, Minnesota, Housing and Redevelopment
Authority, Lease Revenue Bonds (Jail Project) Series 1995A
(Bank Qualified) Capital Guaranty Insured #5.70% Due 2005 @ 100
2/1/2016.................................................... AAA 2014 @ 100 S.F 493,525
250,000 Plymouth, Minnesota, Health Facilities Authority, Revenue
Bonds, Westhealth Project, Series A (Capital Guaranty 2004 @ 102
Insured) #6.25% Due 6/1/2016............................... AAA 2012 @ 100 S.F 258,258
400,000 Southern Minnesota Municipal Power Agency, Power Supply
System Revenue Bonds, Series A (Escrowed to Maturity) MBIA 2003 @ 102
Insured #5.75% Due 1/1/2018................................ AAA 2013 @ 100 S.F 402,000
250,000 City of Minneapolis and the City of Saint Paul Housing and
Redevelopment Authority (Minnesota) Health Care System
Revenue Bonds (HealthSpan) Series 1993A (AMBAC Indemnity 2003 @ 102
Insured) #4.75% Due 11/15/2018............................. AAA 2014 @ 100 S.F 214,970
50,000 Southern Minnesota Municipal Power Agency, Power Supply
System Revenue Refunding Bonds, Series 1994A (MBIA Insured)
#0.00% Due 1/1/2021........................................ AAA 11,066 <F6>
250,000 Saint Paul Housing and Redevelopment Authority, Minnesota,
Hospital Facility Revenue Bonds (St. Paul-Ramsey Medical
Center Project) Series 1993 (AMBAC Indemnity Insured) 2003 @ 102
#5.55% Due 5/15/2023........................................ AAA 2014 @ 100 S.F 239,330
250,000 City of St. Louis Park, Minnesota, Health Care Facilities
Revenue Bonds (HealthSystem Minnesota Obligated Group) 2003 @ 102
Series 1993A (AMBAC Indemnity Insured) #5.20% Due 7/1/2023. AAA 2017 @ 100 S.F 227,443
$ 2,985,000 $ 2,884,403
</TABLE>
All of the Bonds in the portfolio are insured by one of the Preinsured Bond
Insurers as indicated in the Bond name. 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".
PENNSYLVANIA IM-IT TRUST
General. The Pennsylvania IM-IT Trust consists of 8 issues of Securities.Four
of the Bonds in the Pennsylvania 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 Pennsylvania IM-IT Trust) as follows: General Obligations, 4 (61%);
General Purpose, 2 (20%); Health Care, 1 (16%) and Higher Education, 1 (3%).
No Bond issue has received a provisional rating.
Risk Factors. Investors should be aware of certain factors that might affect
the financial conditions of the Commonwealth of Pennsylvania. Pennsylvania
historically has been identified as a heavy industry state although that
reputation has changed recently as the industrial composition of the
Commonwealth diversified when the coal, steel and railroad industries began to
decline. A more diversified economy was necessary as the traditionally strong
industries in the Commonwealth declined due to a long-term shift in jobs,
investment and workers away from the northeast part of the nation. The major
sources of growth in Pennsylvania are in the service sector, including trade,
medical and the health services, education and financial institutions.
Pennsylvania's agricultural industries are also an important component of the
Commonwealth's economic structure, accounting for more than $3.6 billion in
crop and livestock products annually, while agribusiness and food related
industries support $39 billion in economic activity annually.
Non-agricultural employment in the Commonwealth declined by 5.1 percent during
the recessionary period from 1980 to 1983. In 1984, the declining trend was
reversed as employment grew by 2.9 percent over 1983 levels. From 1983 to
1990, Commonwealth employment continued to grow each year, increasing an
additional 14.3 percent. For the last three years, unemployment in the
Commonwealth has declined 1.2 percent. The growth in employment experienced in
Pennsylvania is comparable to the growth in employment in the Middle Atlantic
Region which has occurred during this period.
Back to back recessions in the early 1980s reduced the manufacturing sector's
employment levels moderately during 1980 and 1981, sharply during 1982, and
even further in 1983. Non-manufacturing employment has increased steadily
since 1980 to its 1993 level of 81.6 percent of total Commonwealth employment.
Consequently, manufacturing employment constitutes a diminished share of total
employment within the Commonwealth. Manufacturing, contributing 18.4 percent
of 1993 non-agricultural employment, has fallen behind both the services
sector and the trade sector as the largest single source of employment within
the Commonwealth. In 1993 the services sector accounted for 29.9 percent of
all non-agricultural employment while the trade sector accounted for 22.4
percent.
From 1983 to 1989, Pennsylvania's annual average unemployment rate dropped
from 11.8 percent to 4.5 percent, falling below the national rate in 1986 for
the first time in over a decade. Pennsylvania's annual average unemployment
rate remained below the national average from 1986 until 1990. Slower economic
growth caused the unemployment rate in the Commonwealth to rise to 6.9 percent
in 1991 and 7.5 percent in 1992. The resumption of faster economic growth
resulted in a decrease in the Commonwealth's unemployment rate to 7.1 percent
in 1993. As of July 1994, the seasonally adjusted unemployment rate for the
Commonwealth was 6.5 percent compared to 6.1 percent for the United States.
The five year period from fiscal 1989 through fiscal 1993 was marked by public
health and welfare costs growing at a rate double the growth rate for all the
state expenditures. Rising caseloads, increased utilization of services and
rising prices joined to produce the rapid rise of public health and welfare
costs at a time when a national recession caused tax revenues to stagnate and
even decline. During the period from fiscal 1989 through fiscal 1993, public
health and welfare costs rose by an average annual rate of 10.9 percent while
tax revenues were growing at an average annual rate of 5.5 percent.
Consequently, spending on other budget programs was restrained to a growth
rate below 5.0 percent and sources of revenues other than taxes became larger
components of fund revenues. Among those sources are transfers from other
funds and hospital and nursing home pooling of contributions to use as federal
matching funds.
Tax revenues declined in fiscal 1991 as a result of the recession in the
economy. A $2.7 billion tax increase enacted for fiscal 1992 brought financial
stability to the General Fund. That tax increase included several taxes with
retroactive effective dates which generated some one-time revenues during
fiscal 1992. The absence of those revenues in fiscal 1993 contributed to the
decline in tax revenues shown for fiscal 1993.
It should be noted that the creditworthiness of obligations issued by local
Pennsylvania issuers may be unrelated to the creditworthiness of obligations
issued by the Commonwealth of Pennsylvania, and there is no obligation on the
part of the Commonwealth to make payment on such local obligations in the
event of default.
Financial information for the principal operating funds of the Commonwealth is
maintained on a budgetary basis of accounting. A budgetary basis of accounting
is used for the purpose of ensuring compliance with the enacted operating
budget and is governed by applicable statutes of the Commonwealth and by
administrative procedures. The Commonwealth also prepares annual financial
statements in accordance with generally accepted accounting principles
("GAAP"). The budgetary basis financial information maintained by the
Commonwealth to monitor and enforce budgetary control is adjusted at fiscal
year-end to reflect appropriate accruals for financial reporting in conformity
with GAAP.
Fiscal 1991 Financial Results. GAAP Basis: During fiscal 1991 the General Fund
experienced an $861.2 million operating deficit resulting in a fund balance
deficit of $980.9 million at June 30, 1991. The operating deficit was a
consequence of the effect of a national recession that restrained budget
revenues and pushed expenditures above budgeted levels. At June 30, 1991, a
negative unreserved-undesignated balance of $1,146.2 million was reported.
During fiscal 1991 the balance then available in the Tax Stabilization Reserve
Fund was used to maintain vital state spending.
Budgetary Basis: A deficit of $453.6 million was recorded by the General Fund
at June 30, 1991. The deficit was a consequence of higher-than-budgeted
expenditures and lower-than-estimated revenues during the fiscal year brought
about by the national economic recession that began during the fiscal year.
The budgetary basis deficit at June 30, 1991 was carried into the 1992 fiscal
year and funded in the fiscal 1992 budget. A number of actions were taken
throughout the fiscal year by the Commonwealth to mitigate the effects of the
recession on budget revenues and expenditures. Actions taken, together with
normal appropriation lapses, produced $871 million in expenditure reductions
and increases in revenues and other transfers for the fiscal year. The most
significant of these actions were a $214 million transfer from the
Pennsylvania Industrial Development Authority, a $134 million transfer from
the Tax Stabilization Reserve Fund, and a pooled financing program to match
federal Medicaid funds replacing $145 million of state funds.
Fiscal 1992 Financial Results. GAAP Basis: During fiscal 1992 the General Fund
reported a $1.1 billion operating surplus. This operating surplus was achieved
through legislated tax rate increases and tax base broadening measures enacted
in August 1991 and by controlling expenditures through numerous cost reduction
measures implemented throughout the fiscal year. As a result of the fiscal
1992 operating surplus, the fund balance increased to $87.5 million and the
unreserved-undesignated deficit dropped to $138.6 million from its fiscal 1991
level of $1,146.2 million.
Budgetary Basis: Eliminating the budget deficit carried into fiscal 1992 from
fiscal 1991 and providing revenues for fiscal 1992 budgeted expenditures
required tax revisions that were estimated to have increased receipts for the
1992 fiscal year by over $2.7 billion. Total revenues for the fiscal year were
$14,516.8 million, a $2,654.5 million increase over cash revenues during
fiscal 1991. Originally based on forecasts for an economic recovery, the
budget revenue estimates were revised downward during the fiscal year to
reflect continued recessionary economic activity. Largely due to the tax
revisions enacted for the budget, corporate tax receipts totalled $3,761.2
million, up from $2,656.3 million in fiscal 1991, sales tax receipts increased
by $302 million to $4,499.7 million, and personal income tax receipts totalled
$4,807.4 million, an increase of $1,443.8 million over receipts in fiscal
1991.
As a result of the lowered revenue estimate during the fiscal year, increased
emphasis was placed on restraining expenditure growth and reducing expenditure
levels. A number of cost reductions were implemented during the fiscal year
that contributed to $296.8 million of appropriation lapses. These
appropriation lapses were responsible for the $8.8 million surplus at fiscal
year-end, after accounting for the required ten percent transfer of the
surplus to the Tax Stabilization Reserve Fund.
Spending increases in the fiscal 1992 budget were largely accounted for by
increases for education, social services and corrections programs.
Commonwealth funds for the support of public schools were increased by 9.8
percent to provide a $438 million increase to $4.9 billion for fiscal 1992.
The fiscal 1992 budget provided additional funds for basic and special
education and included provisions designed to help restrain the annual
increase of special education costs, an area of recent rapid cost increases.
Child welfare appropriations supporting county operated child welfare programs
were increased $67 million, more than 31.5 percent over fiscal 1991. Other
social service areas such as medical and cash assistance also received
significant funding increases as costs rose quickly as a result of the
economic recession and high inflation rates of medical care costs. The costs
of corrections programs, reflecting the marked increase in the prisoner
population, increased by 12 percent. Economic development efforts, largely
funded from bond proceeds in fiscal 1991, were continued with General Fund
appropriations for fiscal 1992.
The budget included the use of several Medicaid pooled financing transactions.
These pooling transactions replaced $135 million of Commonwealth funds,
allowing total spending under the budget to increase by an equal amount.
Fiscal 1993 Financial Results. GAAP Basis: The fund balance of the General
Fund increased by $611.4 million during the fiscal year, led by an increase in
the unreserved balance of $576.8 million over the prior fiscal year balance.
At June 30, 1993, the fund balance totalled $698.9 and the
unreserved/undesignated balance totalled $64.4 million. A continuing recovery
of the Commonwealth's financial condition from the effects of the national
economic recession of 1990 and 1991 is demonstrated by this increase in the
balance and a return to a positive unreserved/undesignated balance. The
previous positive unreserved/undesignated balance was recorded in fiscal 1987.
For the second consecutive fiscal year the increase in the
unreserved/undesignated balance exceeded the increase recorded in the
budgetary basis unappropriated surplus during the fiscal year.
Budgetary Basis: The 1993 fiscal year closed with revenues higher than
anticipated and expenditures about as projected, resulting in an ending
unappropriated balance surplus (prior to the ten percent transfer to the Tax
Stabilization Reserve Fund) of $242.3 million, slightly higher than estimated
in May 1993. Cash revenues were $41.5 million above the budget estimate and
totalled $14.633 billion representing less than a one percent increase over
revenues for the 1992 fiscal year. A reduction in the personal income tax rate
in July 1992 and the one-time receipt of revenues from retroactive corporate
tax increases in fiscal 1992 were responsible, in part, for the low revenue
growth in fiscal 1993.
Appropriations less lapses totalled $13.870 billion representing a 1.1 percent
increase over expenditures during fiscal 1992. The low growth in spending is a
consequence of a low rate of revenue growth, significant one-time expenses
during fiscal 1992, increased tax refund reserves to cushion against adverse
decisions on pending litigations, and the receipt of federal funds for
expenditures previously paid out of Commonwealth funds.
By state statute, ten percent of the budgetary basis unappropriated surplus at
the end of a fiscal year is to be transferred to the Tax Stabilization Reserve
Fund. The transfer for the fiscal 1993 balance was $24.2 million. The
remaining unappropriated surplus of $218.0 million was carried forward into
the 1994 fiscal year.
Fiscal 1994 Financial Results (Budgetary Basis). Commonwealth revenues during
the fiscal year totalled $15,210.7 million, $38.6 million above the fiscal
year estimate, and 3.9 percent over Commonwealth revenues during the previous
fiscal year. The sales tax was an important contributor to the higher than
estimated revenues. Collections from the sales tax were $5.124 billion, a 6.1
percent increase from the prior fiscal year and $81.3 million above estimate.
The strength of collections from the sales tax offset the lower than budgeted
performance of the personal income tax which ended the fiscal year $74.4
million below estimate. The shortfall in the personal income tax was largely
due to shortfalls in income not subject to withholding such as interest,
dividends and other income. Tax refunds in fiscal 1994 were reduced
substantially below the $530 million amount provided in fiscal 1993. The
higher fiscal 1993 amount and the reduced fiscal 1994 amount occurred because
reserves of approximately $160 million were added to fiscal 1993 tax refunds
to cover potential payments if the Commonwealth lost litigation known as
Philadelphia Suburban Corp v. Commonwealth. Those reserves were carried into
fiscal 1994 until the litigation was decided in the Commonwealth's favor in
December 1993 and $147.3 million of reserves for tax refunds were released.
Expenditures, excluding pooled financing expenditures and net of all fiscal
1994 appropriation lapses, totalled $14,934.4 million representing a 7.2
percent increase over fiscal 1993 expenditures. Medical assistance and
corrections spending contributed to the rate of spending growth for the fiscal
year.
The Commonwealth maintained an operating balance on a budgetary basis for
fiscal 1994 producing a fiscal year ending unappropriated surplus of $335.8
million. By state statute, ten percent ($33.6 million) of that surplus will be
transferred to the Tax Stabilization Reserve Fund and the remaining balance
will be carried over into the fiscal 1995 fiscal year.
Fiscal 1995 Budget. The fiscal 1995 budget was approved by the Governor on
June 16, 1994 and provided for $15,652.9 million of appropriations from
Commonwealth funds, an increase of 3.9 percent over appropriations, including
supplemental appropriations, for fiscal 1994. Medical assistance expenditures
represent the largest single increase in the budget ($221 million)
representing a nine percent increase over the prior fiscal year. The budget
includes a reform of the state-funded public assistance program that added
certain categories of eligibility to the program but also limited the
availability of such assistance to other eligible persons. Education subsidies
to local school districts were increased by $132.2 million to continue the
increased funding for the poorest school districts in the state.
The budget also includes tax reductions totalling an estimated $166.4 million.
Low income working families will benefit from an increase of the dependent
exemption to $3,000 from $1,500 for the first dependent and from $1,000 for
all additional dependents. A reduction to the corporate net income tax rate
from 12.25 percent to 9.99 percent to be phased in over a period of four years
was enacted. A net operating loss provision has been added to the corporate
net income tax and will be phased in over three years with a $500,000 per firm
annual cap on losses used to offset profits. Several other tax changes to the
sales tax, the inheritance tax and the capital stock and franchise tax were
also enacted.
The fiscal 1995 budget projects a $4 million fiscal year-end unappropriated
surplus. No assumption as to appropriation lapses in fiscal 1995 has been made.
Proposed Fiscal 1996 Budget. On March 7, 1995, Pennsylvania Governor Tom Ridge
presented his proposed budget to the General Assembly for the fiscal year
beginning July 1, 1995. The proposed budget includes spending growth of 2.3%.
It includes a reduction of the Corporate Net Income Tax from 10.99% to 9.99%
retroactive to January 1, 1995, resulting in a projected tax cut of $143
million in the next fiscal year. The proposed budget includes a proportionate
increase in funds for crime-fighting and a proportionate decrease in funds for
welfare. The General Assembly will proceed with its consideration of the
fiscal 1996 budget.
All outstanding general obligation bonds of the Commonwealth are rated AA- by
S&P and A1 by Moody's.
Any explanation concerning the significance of such ratings must be obtained
from the rating agencies. There is no assurance that any ratings will continue
for any period of time or that they will not be revised or withdrawn.
The City of Philadelphia ("Philadelphia") is the largest city in the
Commonwealth, with an estimated population of 1,585,577 according to the 1990
Census. Philadelphia functions both as a city of the first class and a county
for the purpose of administering various governmental programs.
For the fiscal year ending June 30, 1991, Philadelphia experienced a
cumulative General Fund balance deficit of $153.5 million. The audit findings
for the fiscal year ending June 30, 1992, place the Cumulative General Fund
balance deficit at $224.9.
Legislation providing for the establishment of the Pennsylvania
Intergovernmental Cooperation Authority ("PICA") to assist first class cities
in remedying fiscal emergencies was enacted by the General Assembly and
approved by the Governor in June, 1991. PICA is designed to provide assistance
through the issuance of funding debt to liquidate budget deficits and to make
factual findings and recommendations to the assisted city concerning its
budgetary and fiscal affairs. An intergovernmental cooperation agreement
between Philadelphia and PICA was approved by City Council on January 3, 1992,
and approved by the PICA Board and signed by the Mayor on January 8, 1992. At
this time, Philadelphia is operating under a five year fiscal plan approved by
PICA on April 6, 1992. Full implementation of the five year plan was delayed
due to labor negotiations that were not completed until October 1992, three
months after the expiration of the old labor contracts. The terms of the new
labor contracts are estimated to cost approximately $144.0 million more than
what was budgeted in the original five year plan. An amended five year plan
was approved by PICA in May 1993. The audit findings show a surplus of
approximately $3 million for the fiscal year ending June 30, 1993. The fiscal
1994 budget projects no deficit and a balanced budget for the year ending June
30, 1994. The Mayor's latest update of the five year financial plan was
approved by PICA on May 2, 1994.
In June 1992, PICA issued $474,555,000 of its Special Tax Revenue Bonds to
provide financial assistance to Philadelphia and to liquidate the cumulative
General Fund balance deficit. PICA issued $643,430,000 in July 1993 and
$178,675,000 in August 1993 of Special Tax Revenue Bonds to refund certain
general obligation bonds of the City and to fund additional capital projects.
As of the date hereof, the ratings on the City's long-term obligations
supported by payments from the City's General Fund are rated Ba by Moody's and
BB by S&P. Any explanation concerning the significance of such ratings must be
obtained from the rating agencies. There is no assurance that any ratings will
continue for any period of time or that they will not be revised or withdrawn.
The foregoing information constitutes only a brief summary of some of the
financial difficulties 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 the Bonds in the Pennsylvania 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 Pennsylvania 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
Pennsylvania IM-IT Trust Units, see "Other Matters--Federal Tax Status".
In the opinion of Saul, Ewing, Remick & Saul, counsel to the Fund for
Pennsylvania tax matters, under existing law:
(1)Units evidencing fractional undivided interest in the Pennsylvania IM-IT
Trust, which are represented by obligations issued by the Commonwealth of
Pennsylvania, any public authority, commission, board or other agency created
by the Commonwealth of Pennsylvania, any political subdivision of the
Commonwealth of Pennsylvania or any public authority created by any such
political subdivision are not taxable under any of the personal property taxes
presently in effect in Pennsylvania;
(2)distributions of interest income to Unitholders that would not be taxable
it received directly by a Pennsylvania resident are not subject to personal
income tax under the Pennsylvania Tax Reform Code of 1971; nor will such
interest be taxable under the Philadelphia School District Investment Income
Tax imposed on Philadelphia resident individuals;
(3)a Unitholder will have a taxable event under the Pennsylvania state and
local income taxes referred to in the preceding paragraph upon the redemption
or sale of his Units. Units will be taxable under the Pennsylvania inheritance
and estate taxes;
(4)a Unitholder which is a corporation will have a taxable event under the
Pennsylvania Corporate Net Income Tax when it redeems or sells its Units.
Interest income distributed to Unitholders which are corporations is not
subject to Pennsylvania Corporate Net Income Tax or Mutual Thrift Institutions
Tax. However, banks, title insurance companies and trust companies may be
required to take the value of the Units into account in determining the
taxable value of their shares subject to the Shares Tax;
(5)under Act No. 68 of December 3, 1993, gains derived by the Fund from the
sale, exchange or other disposition of Bonds may be subject to Pennsylvania
personal or corporate income taxes. Those gains which are distributed by the
Fund to Unitholders who are individuals may be subject to Pennsylvania
Personal Income Tax. For Unitholders which are corporations, the distributed
gains may be subject to Corporate Net Income Tax or Mutual Thrift Institutions
Tax. Gains which are not distributed by the Fund may nevertheless be taxable
to Unitholders if derived by the Fund from the sale, exchange or other
disposition of Bonds issued on or after February 1, 1994. Gains which are not
distributed by the Fund will remain nontaxable to Unitholders if derived by
the Fund from the sale, exchange or other disposition of Bonds issued prior to
February 1, 1994;
(6)any proceeds paid under insurance policies issued to the Trustee or
obtained by the issuers of the Bonds with respect to the Bonds which represent
maturing interest on defaulted obligations held by the Trustee will be
excludable from Pennsylvania 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; and
(7)the Fund is not taxable as a corporation under Pennsylvania tax laws
applicable to corporations.
On December 3, 1993, changes to Pennsylvania laws affecting taxation of income
and gains from the sale of Commonwealth of Pennsylvania and local obligations
were enacted. Among these changes was the repeal of the exemption from tax of
gains realized upon the sale or other disposition of such obligations. The
Pennsylvania Department of Revenue has issued proposed regulations concerning
these changes. The opinions expressed above are based on our analysis of the
law and proposed regulations but are subject to modification upon review of
final regulations or other guidance that may be issued by the Department of
Revenue or future court decisions.
In rendering its opinion, Saul, Ewing, Remick & Saul has not, for timing
reasons, made an independent review of proceedings related to the issuance of
the Bonds. It has relied on Van Kampen American Capital Distributors, Inc. for
assurance that the Bonds have been issued by the Commonwealth of Pennsylvania
or by or on behalf of municipalities or other governmental agencies within the
Commonwealth.
<TABLE>
<CAPTION>
Semi-
Per Unit Information: Monthly Annual
<S> <C> <C>
Calculation of Estimated Net Annual Unit Income:
Estimated Annual Interest Income per Unit............................. $ 55.19 $ 55.19
Less: Estimated Annual Expense per Unit <F1>.......................... $ 2.43 $ 1.98
Less: Annual Premium on Portfolio Insurance per Unit.................. -- --
Estimated Net Annual Interest Income per Unit......................... $ 52.76 $ 53.21
Calculation of Estimated Interest Earnings per Unit:
Estimated Net Annual Interest Income per Unit......................... $ 52.76 $ 53.21
Divided by 12 and 2, respectively..................................... $ 4.40 $ 26.61
Estimated Daily Rate of Net Interest Accrual per Unit.................. $ .14655 $ .14780
Estimated Current Return Based on Public Offering Price <F2><F3><F4>... 5.28% 5.32%
Estimated Long-Term Return <F2><F3><F4>................................ 5.27% 5.31%
Estimated Initial Monthly Distribution (July 1995)..................... $ 4.40
Estimated Initial Semi-annual Distribution (July 1995)................. $ 4.43
Estimated Normal Distribution per Unit <F4>............................ $ 4.40 $ 26.61
</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
Pennsylvania 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 July 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>
PENNSYLVANIA INSURED MUNICIPALS INCOME TRUST
SERIES 202
(IM-IT AND QUALITY MULTI-SERIES 252)
PORTFOLIO As of May 24, 1995
<CAPTION>
Offering
Price To
Aggregate Name of Issuer, Title, Interest Rate andMaturity Date of Redemption Pennsylvania
Principal<F1> either Bonds Deposited orBonds Contracted for<F1><F5> Rating<F2> Feature<F3> IM-IT Trust<F4>
<S> <C> <C> <C> <C> <C>
$ 500,000 Pennsylvania Intergovernmental Cooperation Authority,
Special Tax Revenue Bonds (City of Philadelphia Funding
Program) Series 1993 (AMBAC Indemnity Insured) #5.75% Due 2003 @ 100
6/15/2015................................................... AAA 2010 @ 100 S.F. $ 496,625
350,000 Hampton Township School District (Allegheny County,
Pennsylvania) General Obligation Bonds, Refunding Series 2005 @ 100
1995A (AMBAC Indemnity Insured) #5.90% Due 11/15/2015...... AAA 2011 @ 100 S.F. 353,770
500,000 Fairview School District (Erie County, Pennsylvania)
General Obligation Bonds, Series 1995 (FGIC Insured) 2005 @ 100
#6.00% Due 2/15/2019........................................ AAA 2016 @ 100 S.F. 508,865
500,000 Punxsutawney Area School District (Jefferson and Indiana
Counties, Pennsylvania) General Obligation Bonds, Series 2005 @ 100
1995 (MBIA Insured) #5.90% Due 4/15/2020................... AAA 2016 @ 100 S.F. 505,470
500,000 Delaware County Authority (Commonwealth of Pennsylvania)
Hospital Revenue Bonds (Crozer-Chester Medical Center) 2003 @ 102
Series 1994 (MBIA Insured) #5.30% Due 12/15/2020........... AAA 2012 @ 100 S.F. 465,210
500,000 County of Cambria, Commonwealth of Pennsylvania, General
Obligation Refunding Bonds, Series 1994A (FGIC Insured) 2004 @ 102
#6.20% Due 8/15/2021........................................ AAA 2017 @ 100 S.F. 517,715
100,000 Municipal Authority of Westmoreland County (Westmoreland
County, Pennsylvania) Municipal Service Revenue Bonds,
Series 1993C (FGIC Insured) #0.00% Due 8/15/2022........... AAA 19,344 <F6>
100,000 Delaware County Authority (Commonwealth of Pennsylvania)
University Revenue Bonds, Series 1995 (Villanova
University) AMBAC Indemnity Insured #5.80% Due 8/1/2025.... AAA 2005 @ 102 100,137
$ 3,050,000 $ 2,967,136
</TABLE>
All of the Bonds in the portfolio are insured by one of the Preinsured Bond
Insurers as indicated in the Bond name. 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".
NORTH CAROLINA QUALITY TRUST
General. The North Carolina Quality Trust consists of 8 issues of Securities.
One of the Bonds in the North Carolina Quality Trust is a general obligation
of the governmental entity issuing it and is 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 North Carolina Quality Trust) as follows: Health
Care, 2 (34%); Certificates of Participation, 3 (26%); Wholesale Electric, 1
(17%); General Obligations, 1 (13%) and General Purpose, 1 (10%). No Bond
issue has received a provisional rating.
Risk Factors. See Portfolio for a list of the Debt Obligations included in the
North Carolina Trust. The portions of the following discussion regarding the
financial condition of the State government may not be relevant to general
obligation or revenue bonds issued by political subdivisions of the State.
Those portions and the sections which follow regarding the economy of the
State are included for the purpose of providing information about general
economic conditions that may or may not affect issuers of the North Carolina
obligations. None of the information is relevant to any Puerto Rico or Guam
Debt Obligations which may be included in the Portfolio of the North Carolina
Trust.
General obligations of a city, town or county in North Carolina are payable
from the general revenues of the entity, including ad valorem tax revenues on
property within the jurisdiction. Revenue bonds issued by North Carolina
political subdivisions include (1) revenue bonds payable exclusively from
revenue-producing governmental enterprises and (2) industrial revenue bonds,
college and hospital revenue bonds and other "private activity bonds"which are
essentially non-governmental debt issues and which are payable exclusively by
private entities such as non-profit organizations and business concerns of all
sizes. State and local governments have no obligation to provide for payment
of such private activity bonds and in many cases would be legally prohibited
from doing so. The value of such private activity bonds may be affected by a
wide variety of factors relevant to particular localities or industries,
including economic developments outside of North Carolina.
Section 23-48 of the North Carolina General Statutes appears to permit any
city, town, school district, county or other taxing district to avail itself
of the provisions of Chapter 9 of the United States Bankruptcy Code, but only
with the consent of the Local Government Commission of the State and of the
holders of such percentage or percentages of the indebtedness of the issuer as
may be required by the Bankruptcy Code (if any such consent is required).
Thus, although limitations apply, in certain circumstances political
subdivisions might be able to seek the protection of the Bankruptcy Code.
State Budget and Revenues. The North Carolina State Constitution requires that
the total expenditures of the State for the fiscal period covered by each
budget not exceed the total of receipts during the fiscal period and the
surplus remaining in the State Treasury at the beginning of the period. The
State's fiscal year runs from July 1st through June 30th.
In 1990 and 1991, the State had difficulty meeting its budget projections. The
General Assembly responded by enacting a number of new taxes and fees to
generate additional revenue and reduce allowable departmental operating
expenditures and continuation funding. The spending reductions were based on
recommendations from the Governor, the Government Performance Audit Committee
and selected reductions identified by the General Assembly.
The State, like the nation, has experienced economic recovery since 1991. In
the opinion of the State Controller, the growth in the economy and the
legislative actions taken in 1991 had a positive effect on the State's revenue
collections over the past several years. The State had a budget surplus of
approximately $865 million at the end of fiscal 1993-94. After review of the
1994-95 continuation budget adopted in 1993, the General Assembly approved
spending expansion funds, in part to restore certain employee salaries to
budgeted levels, which amounts had been deferred to balance the budgets in
1989-1993, and to authorize funding for new initiatives for economic
development, education, human services and environmental programs. (The
cutback in funding for infrastructure and social development projects had been
cited by agencies rating State obligations, following the 1991 reductions, as
cause for concern about the long-term consequences of those reductions on the
economy of the State and the State's fiscal prospects).
Based on projected growth in State tax and fee revenues, the General Fund
balance budgeted forecast for the end of the 1994-95 fiscal year is
approximately $300 million.
The General Assembly of North Carolina is currently in session and is
considering various bills (including the 1995-1997 biennium budget and tax
reduction measures) that, if enacted, could have an impact on the State.
The Governor has proposed General Fund spending of $10.1 billion for the
1995-96 and $10.2 billion for 1996-97. This recommendation includes $343.1
million and $419.2 million for tax relief in 1995-96 and 1996-97,
respectively. The Governor's proposed budget incorporates a projected revenue
growth of 5.7% for 1995-96 and 6.7% for 1996-97, before adjustments for
proposed tax relief and revenues earmarked for local governments. After such
adjustments, the projected growth rate is .7% for 1995-96 and 6.1% for 1996-97.
The budget includes recommendations for shifting existing resources to
high-priority areas like children's programs, education, crime prevention and
economic development, while reducing the size of state government.
The budget is based upon estimated revenues and a multitude of existing and
assumed State and non-state factors, including State and national economic
conditions, international activity and federal government policies and
legislation. The Congress of the United States is considering a number of
matters affecting the federal government's relationship with state governments
that, if enacted into law, could affect fiscal and economic policies of the
states, including North Carolina.
In April 1995, the North Carolina General Assembly repealed, effective for
taxable years beginning on or after January 1, 1995, the tax levied on various
forms of intangible personal property. The intangibles tax revenues receivable
by counties and municipalities will no longer be received. Instead, the
legislature has provided for specific appropriations to counties and
municipalities.
It is unclear what effect these developments at the State level may have on
the value of the Debt Obligations in the North Carolina Trust.
Litigation. Litigation against the State includes the following. None of the
cases, in the reported opinion of the Department of the Treasurer, would have
a material adverse affect on the State's ability to meet its obligations.
Leandro et al v. State of North Carolina and State Board of Education - In
May, 1994 students and boards of education in five counties in the State filed
suit in state court requesting a declaration that the public education system
of North Carolina, including its system of funding, violates the State
constitution by failing to provide adequate or substantially equal educational
opportunities and denying due process of law and violates various statutes
relating to public education. The suit is similar to a number of suits in
other states, some of which resulted in holdings that the respective systems
of public education funding were unconstitutional under the applicable state
law. The defendants in such suit have filed a motion to dismiss, which was
denied. The North Carolina Attorney General's Office believes that sound legal
arguments supports the state's position.
Francisco Case - In August, 1994 a class action lawsuit was filed in state
court against the Superintendent of Public Instruction and the State Board of
Education on behalf of a class of parents and their children who are
characterized as limited English proficient. The complaint alleges that the
State has failed to provide funding for the education of these students and
has failed to supervise local school systems in administering programs for
them. The complaint does not allege an amount in controversy, but asks the
Court to order the defendants to fund a comprehensive program to ensure equal
educational opportunities for children with limited english proficiency. The
North Carolina Attorney General's Office believes that sound legal arguments
supports the state's position.
Swanson Case -- State Tax Refunds -- Federal Retirees. In Davis v. Michigan
(1989), the United States Supreme Court ruled that a Michigan income tax
statute which taxed federal retirement benefits while exemption those paid by
state and local governments violated the constitutional doctrine of
intergovernmental tax immunity. At the time of the Davis decision, North
Carolina law contained similar exemptions in favor of state and local
retirees. Those exemptions were repealed prospectively, beginning with the
1989 tax year. All public pension and retirement benefits are now entitles to
a $4,000 annual exclusion.
Following Davis, federal retirees filed a class action suit in federal court
in 1989 seeking damages equal to the North Carolina income tax paid on federal
retirement income by the class members. A companion suit was filed in state
court in 1990. The complaints alleged that the amount in controversy exceeded
$140 million. The North Carolina Department of Revenue estimated refunds and
interest liability of $280.89 million as of June 30, 1994. In 1991, the North
Carolina Supreme Court ruled in favor of the State in the state court action,
concluding that Davis could only applied prospectively and that the taxes
collected form the federal retirees were thus not improperly collected. In
1993, the United States Supreme Court vacated that decision and remanded the
case back to the North Carolina Supreme Court. The North Carolina Supreme
Court then ruled in favor of the State on the grounds that the federal
retirees had failed to comply with state procedures for challenging
unconstitutional taxes. Plaintiffs petitioned the United Sates Supreme Court
for review of that decision and the Supreme Court denied that petition. The
United States District Court has ruled in favor of the defendants in the
companion federal case, and a petition for reconsideration was denied.
Plaintiffs have appealed to the United States Court of Appeals. No decision
has been rendered. The North Carolina Attorney General's Office believes that
sound legal arguments support the State's position. The plaintiffs are also
seeking relief through state legislation.
Bailey case -- States Tax Refunds -- State Retirees. State and local
government retirees filed a class action suit in 1990 as a result of the
repeal of the income tax exemptions for states and local government retirement
benefits. The original suit was dismissed after the North Carolina Supreme
Court ruled in 1991 that the plaintiffs had failed to comply with state law
requirements for challenging unconstitutional taxes and the United States
Supreme Court denied review. In 1992, many of the same plaintiffs filed a new
lawsuit alleging essentially the same claims, including breach of contract,
unconstitutional impairment of contract rights by the State in taxing benefits
that were allegedly promised to be tax-exempt and violation of several state
constitutional provisions. The North Carolina Attorney General's Office
estimates that the amount in controversy is approximately $40-$45 million
annually for the tax years 1989 through 1992. The case has been tried in
Superior Court but a decision has not yet been made by the trial judge. The
North Carolina Attorney General's Office believes that sound legal arguments
support the State's position.
Faulkenbury v. Teachers' and State Employees' Retirement System, Peele v.
Teachers' and State Employees' Retirement System, and Woodard v. Local
Governmental Employees' Retirement System - Plaintiffs are disability retirees
who brought class actions in state court challenging changes in the formula
for payment of disability retirement benefits and claiming impairment of
contract rights, breach of fiduciary duty, violation of other federal
constitutional rights, and violation of state constitutional and statutory
rights. The State estimates that the cost in damages and higher prospective
benefit payments to plaintiffs and class members would probably amount to $50
million or more in Faulkenbury, $50 million or more in Peele, and $15 million
or more in Woodward, all ultimately payable, at least initially, from the
state retirement system funds. Upon review in Faulkenbury, the North Carolina
Court of Appeals and Supreme Court have held that claims made in Faulkenbury
substantially similar to those in Peele and Woodward, for breach of fiduciary
duty and violation of federal constitutional rights brought under the federal
Civil Rights Act either do not state a cause of action or are otherwise barred
by the statute of limitations. In 1994 plaintiffs took voluntary dismissals of
their claims for impairment of contract rights in violation of the United
States Constitution and filed new actions in federal court asserting the same
claims along with claims for violation of constitutional rights in the
taxation of retirement benefits. The remaining state court claims in all cases
yet to be heard. The federal court actions have been stayed pending the trial
in state court. The North Carolina Attorney General's Office believes that
sound legal arguments support the state's position.
Fulton Case - The State's intangible personal property tax levied on certain
shares of stock has been challenged by the plaintiff on grounds that it
violates the Commerce Clause of the United States Constitution by
discriminating against stock issued by corporations that do all or part of
their business outside the State. The plaintiff in the action is a North
Carolina corporation that does all or part of its business outside the State.
The plaintiff seeks to invalidate the tax in its entirety and to recover tax
paid on the value of its shares in other corporations. The North Carolina
Court of Appeals invalidated the taxable percentage deduction and excised it
from the statute beginning with the 1994 tax year. The effect of this ruling
was to increase collections by rendering all stock taxable on 100% of its
value. The North Carolina Supreme Court reversed the Court of Appeals and held
that the tax is valid and constitutional. The plaintiff's petition for review
by the U.S. Supreme Court was granted. Net collections from the tax for the
fiscal year ended June 30, 1993 amounted to $120.6 million. The North Carolina
Attorney General's Office believes that sound legal arguments support the
state's position.
General. The population of the State has increased 13% from 1980, from
5,880,095 to 6,656,589 as reported by the 1990 federal census and the State
rose from twelfth to tenth in population. The State's estimate of population
as of June 30, 1994 is 7,064,470. Notwithstanding its rank in population size,
North Carolina is primarily a rural state, having only five municipalities
with populations in excess of 100,000.
The labor force has undergone significant change during recent years as the
State has moved from an agricultural to a service and goods producing economy.
Those persons displaced by farm mechanization and farm consolidations have, in
large measure, sought and found employment in other pursuits. Due to the wide
dispersion of non-agricultural employment, the people have been able to
maintain, to a large extent, their rural habitation practices. During the
period 1980 to 1994, the State labor force grew about 26% (from 2,855,200 to
3,609,000). Per capita income during the period 1980 to 1993 grew from $7,999
to $18,702, an increase of 133.8%.
The current economic profile of the State consists of a combination of
industry, agriculture and tourism. As of November 1994, the State was reported
to rank ninth among the states in non-agricultural employment and eighth in
manufacturing employment. Employment indicators have varied somewhat in the
annual periods since June of 1990, but have demonstrated an upward trend since
1991. The following table reflects the fluctuations in certain key employment
categories.
<TABLE>
<CAPTION>
Category (All Seasonally Adjusted) June 1990 June 1991 June 1992 June 1993 June 1994
<S> <C> <C> <C> <C> <C>
Civilian Labor Force 3,312,000 3,228,000 3,495,000 3,504,000 3,560,000
Nonagricultural Employment 3,129,000 3,059,000 3,135,000 3,203,400 3,358,700
Goods Producing Occupations (mining, construction and
manufacturing) 1,023,100 973,600 980,800 993,600 1,021,500
Service Occupations 2,106,300 2,085,400 2,154,200 2,209,800 2,337,200
Wholesale/Retail Occupations 732,500 704,100 715,100 723,200 749,000
Government Employees 496,400 496,700 513,400 515,400 554,600
Miscellaneous Services 587,300 596,300 638,300 676,900 731,900
Agricultural Employment 58,900 88,700 102,800 88,400 53,000
</TABLE>
The seasonally adjusted unemployment rate in January 1995 was estimated to be
3.8% of the labor force (down from 4.0% in January 1994), as compared with
5.7% nationwide (down from 6.7% in January 1994).
As of 1993, the State was tenth in the nation in gross agricultural income of
which nearly the entire amount (approximately $5.3 billion) was from
commodities. According to the State Commissioner of Agriculture, in 1993, the
State ranked first in the nation in the production of flue-cured tobacco,
total tobacco, turkeys and sweet potatoes; second in the value of poultry and
eggs, hog production, trout and the production of cucumbers for pickles;
fourth in commercial broilers, blueberries and peanuts; sixth in burley
tobacco and net farm income.
The diversity of agriculture in North Carolina and a continuing push in
marketing efforts have protected farm income from some of the wide variations
that have been experienced in other states where most of the agricultural
economy is dependent on a small number of agricultural commodities. North
Carolina is the third most diversified agricultural state in the nation.
Tobacco production is the leading source of agricultural income in the State,
accounting for 20% of gross agricultural income. Tobacco farming in North
Carolina has been and is expected to continue to be affected by major Federal
legislation and regulatory measures regarding tobacco production and marketing
and by international competition. Measures adverse to tobacco farming could
have negative effects on farm income and the North Carolina economy generally.
The poultry industry provides nearly 34% of gross agricultural income. The
pork industry has been expanding and accounted for 17% of gross agricultural
income in 1993.
The number of farms has been decreasing; in 1994 there were approximately
58,000 farms in the State (down from approximately 72,000 in 1987, a decrease
of about 19% in seven years). However, a strong agribusiness sector also
supports farmers with farm inputs (fertilizer, insecticide, pesticide and farm
machinery) and processing of commodities produced by farmers (vegetable
canning and cigarette manufacturing). North Carolina's agriculture industry,
including food, fiber and forest products, contributes over $42 billion
annually to the State's economy.
The State Department of Commerce, Travel and Tourism Division reports that in
1993 more than $8.3 billion was spent on tourism in the State. The Department
estimates that two-thirds of total expenditures came from out-of-state
travelers, and that approximately 250,000 people were employed in
tourism-related jobs.
Bond Ratings. Currently, Moody's rates North Carolina general obligation bonds
as Aaa and Standard & Poor's rates such bonds as AAA. Standard & Poor's also
reaffirmed its stable outlook for the State in January 1994.
Standard & Poor's reports that North Carolina's rating reflects the State's
strong economic characteristics, sound financial performance, and low debt
levels.
The Sponsor believes the information summarized above describes some of the
more significant events relating to the North Carolina Trust. The sources of
this information are the official statements of issuers located in North
Carolina, State agencies, publicly available documents, publications of rating
agencies and statements by, or news reports of statements by State officials
and employees and by rating agencies. The Sponsor and its counsel have not
independently verified any of the information contained in the official
statements and other sources and counsel have not expressed any opinion
regarding the completeness or materiality of any matters contained in this
Prospectus other than the tax opinions set forth below under North Carolina
Taxes.
Tax Status. For a discussion of the Federal tax status of income earned on
North Carolina Quality Trust Units, see "Other Matters--Federal Tax Status".
The portfolio of the North Carolina Quality Trust consists of bonds issued by
the State of North Carolina or municipalities, authorities or political
subdivisions thereof (the "Bonds").
In the opinion of Hunton & Williams, special counsel to the Fund for North
Carolina tax matters, under existing North Carolina law:
Upon the establishing of the North Carolina Quality Trust and the Units
thereunder:
(1)The North Carolina Quality Trust is not an "association"taxable as a
corporation under North Carolina law with the result that income of the North
Carolina Quality Trust will be deemed to be income of the Unitholders.
(2)Interest on the Bonds that is exempt from North Carolina income tax when
received by the North Carolina Quality Trust will retain its tax-exempt status
when received by the Unitholders.
(3)Unitholders will realize a taxable event when the North Carolina Quality
Trust disposes of a Bond (whether by sale, exchange, redemption or payment at
maturity) or when a Unitholder redeems or sells his Units (or any of them),
and taxable gains for Federal income tax purposes may result in gain taxable
as ordinary income for North Carolina income tax purposes. However, when a
Bond has been issued under an act of the North Carolina General Assembly that
provides that all income from such Bond, including any profit made from the
sale thereof, shall be free from all taxation by the State of North Carolina,
any such profit received by the North Carolina Quality Trust will retain its
tax-exempt status in the hands of the Unitholders.
(4)Unitholders must amortize their proportionate shares of any premium on a
Bond. Amortization for each taxable year is accomplished by lowering the
Unitholder's basis (as adjusted) in his Units with no deduction against gross
income for the year.
(5)The Units are exempt from the North Carolina tax on intangible personal
property so long as the corpus of the North Carolina Quality Trust remains
composed entirely of Bonds or, pending distribution, amounts received on the
sale, redemption or maturity of the Bonds and the Trustee periodically
supplies to the North Carolina Department of Revenue at such times as required
by the Department of Revenue a complete description of the North Carolina
Quality Trust and also the name, description and value of the obligations held
in the corpus of the North Carolina Quality Trust.
The opinion of Hunton & Williams is based, in part, on the opinion of Chapman
and Cutler regarding Federal tax status.
<TABLE>
<CAPTION>
Semi-
Per Unit Information: Monthly Annual
<S> <C> <C>
Calculation of Estimated Net Annual Unit Income:
Estimated Annual Interest Income per Unit............................. $ 55.78 $ 55.78
Less: Estimated Annual Expense per Unit <F1>.......................... $ 2.41 $ 1.96
Estimated Net Annual Interest Income per Unit......................... $ 53.37 $ 53.82
Calculation of Estimated Interest Earnings per Unit:
Estimated Net Annual Interest Income per Unit......................... $ 53.37 $ 53.82
Divided by 12 and 2, respectively..................................... $ 4.45 $ 26.91
Estimated Daily Rate of Net Interest Accrual per Unit.................. $ .14825 $ .14950
Estimated Current Return Based on Public Offering Price <F2><F3><F4>... 5.34% 5.38%
Estimated Long-Term Return <F2><F3><F4>................................ 5.36% 5.41%
Estimated Initial Monthly Distribution (July 1995)..................... $ 4.45
Estimated Initial Semi-annual Distribution (November 1995)............. $ 22.42
Estimated Normal Distribution per Unit <F4>............................ $ 4.45 $ 26.91
</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 North
Carolina Quality 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--May and November
Distribution Dates............. FIFTEENTH day of the month as follows: monthly--each month; semi-annual--May
and November commencing July 15, 1995
<FN>
<F1>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>
NORTH CAROLINA INVESTORS' QUALITY TAX-EXEMPT TRUST
SERIES 82
(IM-IT AND QUALITY MULTI-SERIES 252)
PORTFOLIO As of May 24, 1995
<CAPTION>
Offering
Price To
North
Name of Issuer, Title, Interest Rate and Maturity Date Rating<F2> Carolina
Aggregate of either Bonds Deposited or Bonds Contracted Standard Redemption Quality
Principal<F1> for<F1><F5> & Poor's Moody's Feature<F3> Trust<F4>
<S> <C> <C> <C> <C> <C>
$ 300,000 City of Fayetteville, North Carolina, Public Works
Commission Revenue Refunding Bonds, Series 1993 (FGIC 2003 @ 100
Insured) #4.75% Due 3/1/2014........................... AAA Aaa 2011 @ 100 S.F. $ 264,195
500,000 North Carolina Municipal Power Agency No. 1, Catawba
Electric Revenue Refunding Bonds, Series 1992 (MBIA 2003 @ 100
Insured) #5.75% Due 1/1/2015........................... AAA Aaa 2013 @ 100 S.F. 492,575
150,000 Charlotte, North Carolina, Certificates of
Participation, Law Enforcement Facilities Project, 2004 @ 102
Series 1995A 6.10% Due 12/1/2015....................... AA N/R 2005 @ 100 S.F. 153,857
370,000 Charlotte, North Carolina, Water and Sewer (Unlimited
Tax) General Obligation Bonds, Series 1994 #5.90% Due
2/1/2017................................................ AAA Aaa 2004 @ 102 374,306
500,000 North Carolina Medical Care Commission, Hospital
Revenue Bonds (Rex Hospital) Series 1993 #6.25% Due 2003 @ 102
6/1/2017................................................ A+ A1 2011 @ 100 S.F. 510,380
500,000 Thomasville, North Carolina, Certificates of
Participation, City Hall and Utility System
Improvements Projects, Series 1992 (FSA Insured) 2003 @ 102
#6.00% Due 6/1/2017..................................... AAA Aaa 2011 @ 100 S.F. 511,710
500,000 North Carolina Medical Care Commission, Hospital
Revenue Bonds (Moore Regional Hospital Project) Series 2003 @ 102
1993 #5.00% Due 10/1/2018.............................. A+ A1 2014 @ 100 S.F. 431,705
125,000 Chapel Hill, North Carolina, Parking Facilities
Refunding Certificates of Participation, Series 1994 2003 @ 102
#6.45% Due 12/1/2023.................................... A+ A1 2019 @ 100 S.F. 130,454
$ 2,945,000 $ 2,869,182
</TABLE>
For an explanation of the footnotes used on this page, see "Notes to
Portfolios".
As of the Date of Deposit: May 24, 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 January 27,1995 to May 23,1995. These
Securities have expected settlement dates ranging from May 24,1995 to June
29,1995 (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.................... $-- $ 8,559,515 $ 66,089 $ 510,888 $ 8,557,600
Arizona IM-IT............ $-- $ 2,839,491 $ 71,533 $ 169,413 $ 2,889,225
Minnesota IM-IT.......... $-- $ 2,866,834 $ 17,569 $ 165,170 $ 2,862,925
Pennsylvania IM-IT....... $-- $ 2,937,988 $ 29,148 $ 172,200 $ 2,943,625
North Carolina Quality... $-- $ 2,846,351 $ 22,831 $ 168,293 $ 2,846,544
</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% 5 to 28 days
Arizona IM-IT............ 15% 5 days
Minnesota IM-IT.......... 35% 7 to 15 days
Pennsylvania IM-IT....... -- --
North Carolina Quality... -- --
</TABLE>
On the Date of Deposit, the offering side evaluations of the Securities in the
IM-IT, Arizona IM-IT, Minnesota IM-IT, Pennsylvania IM-IT and North Carolina
Quality Trusts were higher than the bid side evaluations of such Securities by
0.75%, 0.73%, 0.72%, 0.77% and 0.77%, 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 5%, 4%, 2% and
3% of the aggregate principal amount of the Securities in the IM-IT, Arizona
IM-IT Trust, Minnesota IM-IT Trust and Pennsylvania 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>
IM-IT
Name Address Units
<S> <C> <C>
Van Kampen American Capital Dist., Inc. One Parkview Plaza, Oakbrook Terrace, Illinois 60181 3,820
A.G. Edwards & Sons, Inc. One North Jefferson Avenue, St. Louis, Missouri 63103 1,500
Southwest Securities Inc. 1201 Elm Street, Suite 4300, Dallas, Texas 75270 500
Edward D. Jones & Co. 201 Progress Parkway, Maryland Heights, Missouri 63043 400
Dean Witter Reynolds, Incorporated 2 World Trade Center, 59th Floor, New York, New York 10048 250
J.J.B. Hilliard, W.L. Lyons, Inc. 501 South Fourth Street, Louisville, Kentucky 40202 250
William R. Hough & Company 100 Second Avenue South, 8th Floor, St. Petersburg, Florida 33701 250
Stifel, Nicolaus & Company, Incorporated 500 North Broadway, St. Louis, Missouri 63102 250
B.C. Ziegler and Company 215 North Main Street, West Bend, Wisconsin 53095 250
Advest, Inc. 280 Trumbull Street, Hartford, Connecticut 06103 100
Robert W. Baird & Co. Inc. 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202 100
Fidelity Capital Markets 164 Northern Avenue, Boston, Massachusetts 02215 100
First Miami Securities 20660 West Dixie Highway, North Miami Beach, Florida 33180 100
First of Michigan Corporation 100 Renaissance Center, 26th Floor, Detroit, Michigan 48243 100
Gruntal & Co., Incorporated 14 Wall Street, New York, New York 10005 100
Huntleigh Securities Corporation 222 South Central, 3rd Floor, St. Louis, Missouri 63105 100
Kemper Securities, Inc. 77 West Wacker Drive, 28th Floor, Chicago, Illinois 60601 100
Oppenheimer & Co., Inc. World Financial Center, 8th Floor, New York, New York 10281 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
Smith Barney Inc. 388 Greenwich Street, 23rd Floor, New York, New York 10013 100
9,070
</TABLE>
<TABLE>
<CAPTION>
Arizona
IM-IT Trust
Name Address Units
<S> <C> <C>
Van Kampen American Capital Dist., Inc. One Parkview Plaza, Oakbrook Terrace, Illinois 60181 2,011
J.J.B. Hilliard, W.L. Lyons, Inc. 501 South Fourth Street, Louisville, Kentucky 40202 300
A.G. Edwards & Sons, Inc. One North Jefferson Avenue, St. Louis, Missouri 63103 250
Dean Witter Reynolds, Incorporated 2 World Trade Center, 59th Floor, New York, New York 10048 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
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
3,061
</TABLE>
<TABLE>
<CAPTION>
Minnesota
IM-IT Trust
Name Address Units
<S> <C> <C>
Van Kampen American Capital Dist., Inc. One Parkview Plaza, Oakbrook Terrace, Illinois 60181 2,733
Dean Witter Reynolds, Incorporated 2 World Trade Center, 59th Floor, New York, New York 10048 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
3,033
</TABLE>
<TABLE>
<CAPTION>
Pennsylvania
IM-IT Trust
Name Address Units
<S> <C> <C>
Van Kampen American Capital Dist., Inc. One Parkview Plaza, Oakbrook Terrace, Illinois 60181 1,670
Four Falls Corporate Center, Suite 212, Route 23,
Boenning & Scattergood, Inc. West Conshohocken, Pennsylvania 19428 250
Gruntal & Co., Incorporated 14 Wall Street, New York, New York 10005 250
Prudential Securities Inc. 1 New York Plaza, 14th Floor, New York, New York 10292-2014 250
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
A.G. Edwards & Sons, Inc. One North Jefferson Avenue, St. Louis, Missouri 63103 100
Janney Montgomery Scott Inc. 1801 Market Street, 11th Floor, Philadelphia, Pennsylvania 19103 100
Legg Mason Wood Walker, Inc. 111 South Calvert Street, Baltimore, Maryland 21202 100
W.H. Newbolds Son & Co. 1500 Walnut Street, Philadelphia, Pennsylvania 19102 100
Parker/Hunter, Incorporated 600 Grant Street, Pittsburgh, Pennsylvania 15219 100
3,120
</TABLE>
<TABLE>
<CAPTION>
North Carolina
Quality Trust
Name Address Units
<S> <C> <C>
Van Kampen American Capital Dist., Inc. One Parkview Plaza, Oakbrook Terrace, Illinois 60181 2,517
Dean Witter Reynolds, Incorporated 2 World Trade Center, 59th Floor, New York, New York 10048 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
Prudential Securities Inc. 1 New York Plaza, 14th Floor, New York, New York 10292-2014 100
Wheat, First Securities, Inc. River Front Plaza, 901 East Byrd Street, Richmond, Virginia 23219 100
3,017
</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 and Investors' Quality Tax-Exempt
Trust or to any 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.) 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
California Insured Municipals Income Trust....................... Double tax-exemption for California residents by investing
in insured California municipal securities
New York Insured Municipals Income Trust......................... Double and in certain cases triple tax-exemption for New York
residents by investing in insured New York municipal securities
Pennsylvania Insured Municipals Income Trust..................... Double and in certain cases triple tax-exemption for Pennsylvania
residents by investing in insured Pennsylvania municipal
securities
Insured Municipals Income Trust, Insured Multi-Series............ Tax-exempt income by investing in insured municipal securities;
(Premium Bond Series, National, Limited Maturity, Intermediate, all issuers of bonds in a state trust are located in such state
Short Intermediate, Discount, Alabama, Arizona, Arkansas, or in territories or possessions of the United States--
California, California Intermediate, California Intermediate providing exemptions from all state income tax for residents of
Laddered Maturity, California Premium, Colorado, Connecticut, such state (except for the Oklahoma IM-IT Trust where a portion
Florida, Florida Intermediate, Florida Intermediate Laddered of the income of the Trust may be subject to the Oklahoma state
Maturity, Georgia, Louisiana, Massachusetts, Massachusetts income tax)
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 York
Intermediate Laddered Maturity, New York Limited Maturity,
Ohio, Ohio Intermediate, Ohio Intermediate Laddered Maturity,
Ohio Premium, Oklahoma, Pennsylvania, Pennsylvania Intermediate,
Pennsylvania Intermediate Laddered Maturity, Pennsylvania
Premium, Tennessee, Texas, Texas Intermediate Laddered
Maturity, Washington, West Virginia
Insured Tax Free Bond Trust...................................... Tax-exempt income by investing in insured municipal securities
Insured Tax Free Bond Trust, Insured Multi-Series................ Tax-exempt income by investing in insured municipal securities;
(National, Limited Maturity, New York) all issuers of bonds in a state trust are located in such state--
providing exemptions from state income tax for residents
of such state
Investors' Quality Tax-Exempt Trust.............................. Tax-exempt income by investing in municipal securities
Investors' Quality Tax-Exempt Trust, Multi-Series ............... Tax-exempt income by investing in municipal securities; all
(National, National AMT, Intermediate, Alabama, Arizona, issuers of bonds in a state trust are located in such state or in
Arkansas, California, Colorado, Connecticut, Delaware, territories or possessions of the United States--providing
Florida, Georgia, Hawaii, Kansas, Kentucky, Maine, Maryland, exemptions from state income tax for residents of such state
Massachusetts, Michigan, Minnesota, Missouri, Nebraska,
New Jersey, New York, North Carolina, Ohio, Oregon,
Pennsylvania, South Carolina, Virginia)
Investors' Quality Municipals Trust, AMT Series.................. 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 minimum tax
Investors' Corporate Income Trust................................ Taxable income by investing in corporate bonds
Investors' Governmental Securities--Income Trust................. Taxable income by investing in government-backed GNMA securities
Van Kampen Merritt International Bond Income Trust............... High current income through an investment in a diversified
portfolio of foreign currency denominated corporate debt
obligations
Van Kampen Merritt Insured Income Trust.......................... 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 securities
Van Kampen American Capital Insured Income Trust................. 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 securities
Van Kampen Merritt Utility Income Trust.......................... High dividend income and capital appreciation by investing in
common stock of electric utilities
Van Kampen Merritt 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 Dow Jones Industrial Average*
Van Kampen Merritt Select Equity and Treasury Trust.............. 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 time of the creation of the trust were components
of the Dow Jones Industrial Average*
Van Kampen Merritt Blue Chip Opportunity 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
Dow Jones Industrial Average*
Van Kampen Merritt Blue Chip Opportunity and Treasury Trust ..... Protect Unitholders' capital and provide the potential for
capital appreciation and income by investing a portion of its
capital 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 time of the creation of the trust were components of the
Dow Jones Industrial Average*
Van Kampen Merritt Emerging Markets Income Trust................. 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 the framework of
the Brady Plan
Van Kampen Merritt Global Telecommunications Trust............... 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
equipment for or services to the telecommunications industry
Van Kampen Merritt Global Energy Trust........................... Provide the potential for capital appreciation and income
consistent with the preservation of invested capital, by the
energy industry investing in a portfolio of equity securities
diversified within the energy industry
Strategic Ten Trust.............................................. Provide an above average total return through a combination of
(United States, United Kingdom, and Hong Kong Portfolios) potential capital appreciation and dividend income, consistent
with preservation of invested capital, by investing in a portfolio
of common stocks of the ten companies in a recognized stock
exchange index having the highest dividend yields
Van Kampen Merritt Brand Name Equity Trust....................... Provide the potential for capital appreciation and income
consistent with the preservation of invested capital, by
investing in a portfolio of equity securities diversified within
the non-durable consumer products industry
____________________
*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>
<TABLE>
<CAPTION>
Name of Mutual Fund Fund Investment Objective
<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>
<CAPTION>
Name of Closed-end Fund Fund Investment Objective
<S> <C>
High current income exempt from Federal income taxes with
safety of principal by investing in a diversified portfolio of
Van Kampen Merritt Municipal Income Trust...........................investment grade municipal securities
High current income exempt from Federal and California income
taxes with safety of principal by investing in a diversified
Van Kampen Merritt California Municipal Trust.......................portfolio of investment grade California municipal securities
High current income while seeking to preserve shareholders'
capital by investing in a diversified portfolio of high yield
Van Kampen Merritt Intermediate Term High Income Trust..............fixed income securities
High current income while seeking to preserve shareholders'
capital by investing in a diversified portfolio of high yield
Van Kampen Merritt Limited Term High Income Trust...................fixed income securities
High current income, consistent with preservation of capital
by investing in interests in floating or variable rate senior
Van Kampen Merritt Prime Rate Income Trust..........................loans
High current income exempt from Federal income tax, consistent
Van Kampen Merritt Investment Grade Municipal Trust.................with 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
Van Kampen Merritt California Quality Municipal Trust...............portfolio of 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
Van Kampen Merritt Florida Quality Municipal Trust..................investment grade Florida 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 diversified portfolio of investment grade
Van Kampen Merritt New York Quality Municipal Trust.................New York municipal securities
High current income exempt from Federal and Ohio income taxes
with safety of principal by investing in a diversified
Van Kampen Merritt Ohio Quality Municipal Trust.....................portfolio of 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 investment grade Pennsylvania
Van Kampen Merritt Pennsylvania Quality Municipal Trust.............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 respect to timely payment of
Van Kampen Merritt Trust for Insured Municipals.....................principal and interest
High level of current income exempt from Federal and
California income taxes, consistent with preservation of
Van Kampen Merritt Trust for Investment Grade CA capital by investing in a diversified portfolio of California
Municipals.........................................................municipal securities
High level of current income exempt from Federal income taxes,
consistent with preservation of capital. The Fund also seeks
Van Kampen Merritt Trust for Investment Grade FL to offer its Shareholders the opportunity to own securities
Municipals.........................................................exempt from Florida intangible personal property taxes
High level of current income exempt from Federal income taxes
Van Kampen Merritt Trust for Investment Grade NJ and New Jersey gross income taxes, consistent with
Municipals ........................................................preservation of capital
High level of current income exempt from Federal as well as
Van Kampen Merritt Trust for Investment Grade NY from New York State and New York City income taxes, consistent
Municipals.........................................................with preservation of capital
High level of current income exempt from Federal and
Pennsylvania income taxes and, where possible under local law,
Van Kampen Merritt Trust for Investment Grade PA local income and property taxes, consistent with preservation
Municipals.........................................................of capital
High level of current income exempt from Federal income tax,
consistent with preservation of capital by investing in a
Van Kampen Merritt Municipal Opportunity Trust......................diversified portfolio of municipal securities
High level of current income exempt from Federal income tax,
consistent with preservation of capital by investing in a
Van Kampen Merritt Advantage Municipal Income Trust.................diversified portfolio of municipal securities
High level of current income exempt from Federal and
Pennsylvania income taxes and, where possible under local law,
local income and property taxes, consistent with preservation
Van Kampen Merritt Advantage Pennsylvania Municipal Income Trust....of capital
Provide common shareholders with a high level of current
income exempt from Federal income taxes, consistent with
Van Kampen Merritt Strategic Sector Municipal Trust.................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
High level of current income exempt from Federal and
Van Kampen Merritt California Value Municipal California income taxes, consistent with preservation of
Income Trust.......................................................capital
High level of current income exempt from Federal income taxes
Van Kampen Merritt Massachusetts Value Municipal and Massachusetts personal income taxes, consistent with
Income Trust......................................................preservation of capital
High level of current income exempt from Federal income taxes
Van Kampen Merritt New Jersey Value Municipal and New Jersey gross income tax, consistent with preservation
Income Trust.......................................................of capital
High level of current income exempt from Federal as well as
Van Kampen Merritt New York Value Municipal New York State and New York City income taxes, consistent with
Income Trust.......................................................preservation of capital
Van Kampen Merritt Ohio Value Municipal Income High level of current income exempt from Federal and Ohio
Trust..............................................................income taxes, consistent with preservation of capital
High level of current income exempt from Federal and
Van Kampen Merritt Pennsylvania Value Municipal Pennsylvania income taxes, consistent with preservation of
Income Trust......................................................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 Florida intangible personal property
Van Kampen Merritt Florida Municipal Opportunity Trust .............taxes
Provide common shareholders with a high level of current
income exempt from Federal income tax, consistent with
Van Kampen Merritt Advantage Municipal Income Trust II..............preservation of capital
To provide common shareholders with a high level of current
income exempt from Federal income tax, consistent with
Van Kampen Merritt Select Sector Municipal Trust....................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 and Investors' Quality Tax-Exempt
Trust, Multi-Series 1 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 $4,626, $1,530, $1,522, $1,556, $1,502 for the IM-IT, Arizona IM-IT,
Minnesota IM-IT, Pennsylvania IM-IT and North Carolina Quality Trusts,
respectively. Assuming in the alternative that all Unitholders had elected the
monthly distribution plan such fees would have initially amount to $8,254,
$2,730, $2,716, $2,776, $2,680 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. The
Sponsor, in connection with the Quality Trusts, may direct the Trustee to
dispose of Securities upon default in payment of principal or interest,
institution of certain legal proceedings, default under other documents
adversely affecting debt service, default in payment of principal or interest
on other obligations of the same issuer, decline in projected income pledged
for debt service on revenue bonds or decline in price or the occurrence of
other market or credit factors, including advance refunding (i.e., the
issuance of refunding securities and the deposit of the proceeds thereof in
trust or escrow to retire the refunded securities on their respective
redemption dates), so that in the opinion of the Sponsor the retention of such
Securities would be detrimental to the interest of the Unitholders. 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
Quality, 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. In
connection with quantity sales to purchasers of any Pennsylvania IM-IT Trust
the Underwriters will receive from the Sponsor commissions totalling $35.00
per Unit for any single transaction of 100 to 249 Units, $36.00 per Unit for
any single transaction of 250 to 499 units, $37.00 per Unit for any single
transaction of 500 to 999 Units and $38.00 per Unit for any single transaction
of 1,000 or more Units. In addition, any Underwriter that sells a total of 25%
or 1,500 Units, whichever is greater, of any Pennsylvania IM-IT Trust will
receive an additional $2.00 per each such Unit. 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, Arizona and Minnesota tax law have been passed upon by
Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois 60603, as
counsel for the Sponsor. Hunton & Williams has acted as special counsel to the
Fund for North Carolina tax matters. Saul, Ewing, Remick & Saul has acted as
special counsel to the Fund for Pennsylvania tax matters. 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 Ratings Group. A Standard & Poor's Ratings Group ("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.
As published by the rating companies.
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.
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 and Investors' Quality
Tax-Exempt Trust, Multi-Series 252 (IM-IT, Arizona IM-IT, Minnesota IM-IT,
Pennsylvania IM-IT and North Carolina Quality Trusts):
We have audited the accompanying statements of condition and the related
portfolios of Insured Municipals Income Trust and Investors' Quality
Tax-Exempt Trust, Multi-Series 252 (IM-IT, Arizona IM-IT, Minnesota IM-IT,
Pennsylvania IM-IT and North Carolina Quality Trusts) as of May 24, 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 and Investors' Quality Tax-Exempt Trust, Multi-Series 252 (IM-IT,
Arizona IM-IT, Minnesota IM-IT, Pennsylvania IM-IT and North Carolina Quality
Trusts) as of May 24, 1995, in conformity with generally accepted accounting
principles.
Chicago, Illinois GRANT THORNTON LLP
May 24, 1995
<TABLE>
INSURED MUNICIPALS INCOME TRUST
and INVESTORS' QUALITY TAX-EXEMPT TRUST
MULTI-SERIES 252
Statements of Condition
As of May 24, 1995
<CAPTION>
INVESTMENT IN SECURITIES Arizona Minnesota
IM-IT IM-IT Trust IM-IT Trust
<S> <C> <C> <C>
Contracts to purchase tax-exempt securities <F1><F2><F4>... $ 8,625,604 $ 2,911,024 $ 2,884,403
Accrued interest to the First Settlement Date <F1><F4>..... 79,829 50,454 26,332
Total...................................................... $ 8,705,433 $ 2,961,478 $ 2,910,735
LIABILITY AND INTEREST OF UNITHOLDERS
Liability-- ...............................................
Accrued interest payable to Sponsor <F1><F4> $ 79,829 $ 50,454 $ 26,332
Interest of Unitholders-- .................................
Cost to investors <F3>..................................... 9,070,000 3,061,000 3,033,000
Less: Gross underwriting commission <F3>................... 444,396 149,976 148,597
Net interest to Unitholders <F1><F3><F4>................... 8,625,604 2,911,024 2,884,403
Total...................................................... $ 8,705,433 $ 2,961,478 $ 2,910,735
<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 Interest to
Amount of Amount of Price of Expected
Letter of Bonds Under Bonds Under Delivery
Credit Contracts Contracts Dates
<S> <C> <C> <C> <C>
IM-IT....................$8,707,478 $9,070,000 $8,625,604 $81,874
Arizona IM-IT Trust......$2,959,235 $3,000,000 $2,911,024 $48,211
Minnesota IM-IT Trust....$2,911,191 $2,985,000 $2,884,403 $26,788
<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
June 1, 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
and INVESTORS' QUALITY TAX-EXEMPT TRUST
MULTI-SERIES 252
Statements of Condition (Continued)
As of May 24, 1995
<CAPTION>
INVESTMENT IN SECURITIES Pennsylvania North Carolina
IM-IT Trust Quality Trust
<S> <C> <C>
Contracts to purchase tax-exempt securities <F1><F2><F4>... $ 2,967,136 $ 2,869,182
Accrued interest to the First Settlement Date <F1><F4>..... 48,422 63,929
Total...................................................... $ 3,015,558 $ 2,933,111
LIABILITY AND INTEREST OF UNITHOLDERS
Liability-- ...............................................
Accrued interest payable to Sponsor <F1><F4> $ 48,422 $ 63,929
Interest of Unitholders-- .................................
Cost to investors <F3>..................................... 3,120,000 3,017,000
Less: Gross underwriting commission <F3>................... 152,864 147,818
Net interest to Unitholders <F1><F3><F4>................... 2,967,136 2,869,182
Total...................................................... $ 3,015,558 $ 2,933,111
<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 Interest to
Amount of Amount of Price of Expected
Letter of Bonds Under Bonds Under Delivery
Credit Contracts Contracts Dates
<S> <C> <C> <C> <C>
Pennsylvania IM-IT Trust........$3,013,306 $3,050,000 $2,967,136 $46,170
North Carolina Quality Trust... $2,930,469 $2,945,000 $2,869,182 $61,287
<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
June 1, 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
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Single Joint Tax
Return Return Bracket 5% 5 1/2% 6% 6 1/2% 7% 7 1/2% 8%
Equivalent Taxable Estimated Current Return
$ 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>
ARIZONA
<TABLE>
<CAPTION>
Taxable Income ($1,000's) Tax-Exempt Estimated Current Return
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Single Joint Tax
Return Return Bracket 5% 5 1/2% 6% 6 1/2% 7% 7 1/2% 8%
Equivalent Taxable Estimated Current Return
$ 0 - 23.35 $ 0 - 39.00 18% 6.13% 6.74% 7.35% 7.97% 8.58% 9.19% 9.80%
39.00 - 94.25 31 7.31 8.04 8.77 9.50 10.23 10.96 11.70
23.35 - 56.55 31.7 7.42 8.16 8.90 9.64 10.39 11.13 11.87
56.55 - 117.95 94.25 - 143.60 34.6 7.74 8.51 9.29 10.06 10.84 11.61 12.38
143.60 - 256.50 39.3 8.35 9.18 10.02 10.85 11.69 12.52 13.36
117.95 - 256.50 39.6 8.39 9.23 10.07 10.91 11.74 12.58 13.42
Over 256.50 Over 256.50 43 8.90 9.79 10.68 11.57 12.46 13.35 14.23
</TABLE>
MINNESOTA
<TABLE>
<CAPTION>
Taxable Income ($1,000's) Tax-Exempt Estimated Current Return
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Single Joint Tax
Return Return Bracket 5% 5 1/2% 6% 6 1/2% 7% 7 1/2% 8%
Equivalent Taxable Estimated Current Return
$ 0 - 23.35 $ 0 - 39.00 21.8% 6.39% 7.03% 7.67% 8.31% 8.95% 9.59% 10.23%
23.35 - 56.55 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>
PENNSYLVANIA
<TABLE>
<CAPTION>
Taxable Income ($1,000's) Tax-Exempt Estimated Current Return
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Single Joint Tax
Return Return Bracket* 5% 5 1/2% 6% 6 1/2% 7% 7 1/2% 8%
Equivalent Taxable Estimated Current Return
$ 0 - 23.35 $ 0 - 39.00 17.4 % 6.05% 6.66% 7.26% 7.87% 8.47% 9.08% 9.69%
23.35 - 56.55 39.00 - 94.25 30 7.14 7.86 8.57 9.29 10.00 10.71 11.43
56.55 - 117.95 94.25 - 143.60 32.9 7.45 8.20 8.94 9.69 10.43 11.18 11.92
117.95 - 256.50 143.60 - 256.50 37.8 8.04 8.84 9.65 10.45 11.25 12.06 12.86
Over 256.50 Over 256.50 41.3 8.52 9.37 10.22 11.07 11.93 12.78 13.63
</TABLE>
* The table does not reflect the effect of the exemption of the Trust from
local personal property taxes and from the Philadelphia School District
Investment Net Income Tax; accordingly, residents of Pennsylvania subject to
such taxes would need a higher taxable estimated current return than those
shown to equal the tax-exempt estimated current return of the Trust.
NORTH CAROLINA
<TABLE>
<CAPTION>
Taxable Income ($1,000's) Tax-Exempt Estimated Current Return
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Single Joint Tax
Return Return Bracket 5% 5 1/2% 6% 6 1/2% 7% 7 1/2% 8%
Equivalent Taxable Estimated Current Return
$ 0 - 23.35 $ 0 - 39.00 21% 6.33% 6.96% 7.59% 8.23% 8.86% 9.49% 10.13%
23.35 - 56.55 39.00 - 94.25 33 7.46 8.21 8.96 9.70 10.45 11.19 11.94
56.55 - 117.95 94.25 - 143.60 36.4 7.86 8.65 9.43 10.22 11.01 11.79 12.58
117.95 - 256.50 143.60 - 256.50 41 8.47 9.32 10.17 11.02 11.86 12.71 13.56
Over 256.50 Over 256.50 44.3 8.98 9.87 10.77 11.67 12.57 13.46 14.36
</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>
July 1995 - March 2005 $ 4.51 $ 4.51
April 2005 4.51 $ 82.69 87.20
May 2005 - July 2005 4.13 4.13
August 2005 4.13 27.56 31.69
September 2005 - May 2006 4.00 4.00
June 2006 3.41 220.51 223.92
July 2006 2.89 110.25 113.14
August 2006 - May 2007 2.35 2.35
June 2007 2.30 22.05 24.35
July 2007 2.24 2.24
August 2007 2.24 55.13 57.37
September 2007 - December 2015 1.96 1.96
January 2016 1.96 35.28 37.24
February 2016 - January 2017 1.80 1.80
February 2017 1.60 77.18 78.78
March 2017 - June 2017 1.43 1.43
July 2017 1.43 55.12 56.55
August 2017 - June 2022 1.21 1.21
July 2022 1.21 27.57 28.78
August 2022 1.21 1.21
September 2022 1.21 22.05 23.26
October 2022 - July 2023 1.21 1.21
August 2023 1.21 44.10 45.31
September 2023 - September 2024 1.01 1.01
October 2024 .72 110.25 110.97
November 2024 - May 2027 .47 .47
June 2027 .19 110.26 110.45
</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 $ 27.29 $ 27.29
June 1996 - December 2004 27.30 27.30
April 2005 $ 82.69 82.69
June 2005 26.54 26.54
August 2005 27.56 27.56
December 2005 24.48 24.48
June 2006 23.61 220.51 244.12
July 2006 110.25 110.25
December 2006 14.82 14.82
June 2007 14.22 22.05 36.27
August 2007 55.13 55.13
December 2007 12.48 12.48
June 2008 - December 2015 11.91 11.91
January 2016 35.28 35.28
June 2016 11.08 11.08
December 2016 10.91 10.91
February 2017 77.18 77.18
June 2017 9.21 9.21
July 2017 55.12 55.12
December 2017 7.59 7.59
June 2018 - June 2022 7.39 7.39
July 2022 27.57 27.57
September 2022 22.05 22.05
December 2022 7.39 7.39
June 2023 7.39 7.39
August 2023 44.10 44.10
December 2023 6.57 6.57
June 2024 6.15 6.15
October 2024 110.25 110.25
December 2024 4.77 4.77
June 2025 - December 2026 2.89 2.89
June 2027 2.61 110.26 112.87
</TABLE>
Arizona 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>
July 1995 - June 2003 $ 4.41 $ 4.41
July 2003 4.41 $ 163.34 167.75
August 2003 - December 2006 3.53 3.53
January 2007 3.53 248.29 251.82
February 2007 - June 2007 2.31 2.31
July 2007 2.31 32.66 34.97
August 2007 - May 2013 2.16 2.16
June 2013 2.16 17.97 20.13
July 2013 2.16 16.34 18.50
August 2013 - November 2018 2.16 2.16
December 2018 2.16 174.78 176.94
January 2019 - June 2024 1.40 1.40
July 2024 1.40 163.34 164.74
August 2024 - August 2028 .67 .67
September 2028 .28 163.35 163.63
</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>
July 1995 $ 4.44 $ 4.44
January 1996 - January 2003 26.70 26.70
July 2003 26.70 $ 163.34 190.04
January 2004 - July 2006 21.35 21.35
January 2007 21.35 248.29 269.64
July 2007 14.00 32.66 46.66
January 2008 - January 2013 13.09 13.09
June 2013 17.97 17.97
July 2013 13.09 16.34 29.43
January 2014 - July 2018 13.09 13.09
December 2018 174.78 174.78
January 2019 12.34 12.34
July 2019 - January 2024 8.49 8.49
July 2024 8.49 163.34 171.83
January 2025 - July 2028 4.07 4.07
September 2028 .96 163.35 164.31
</TABLE>
Minnesota 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>
July 1995 $ 4.33 $ 4.33
August 1995 - January 2004 4.34 4.34
February 2004 4.34 $ 164.85 169.19
March 2004 - December 2004 3.61 3.61
January 2005 3.61 131.88 135.49
February 2005 - May 2006 2.99 2.99
June 2006 2.99 82.43 85.42
July 2006 - January 2012 2.57 2.57
February 2012 2.57 51.10 53.67
March 2012 - January 2013 2.33 2.33
February 2013 2.33 92.32 94.65
March 2013 - January 2016 1.90 1.90
February 2016 1.90 164.85 166.75
March 2016 - January 2017 1.13 1.13
February 2017 1.13 32.97 34.10
March 2017 - November 2018 .98 .98
December 2018 .81 82.43 83.24
January 2019 - December 2020 .66 .66
January 2021 .66 16.49 17.15
February 2021 - May 2023 .66 .66
June 2023 .46 82.42 82.88
July 2023 .29 82.43 82.72
</TABLE>
Minnesota IM-IT Trust (continued)
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>
July 1995 $ 4.36 $ 4.36
January 1996 - January 2004 26.21 26.21
February 2004 $ 164.85 164.85
July 2004 22.53 22.53
January 2005 21.79 131.88 153.67
July 2005 - January 2006 18.06 18.06
June 2006 82.43 82.43
July 2006 17.63 17.63
January 2007 - January 2012 15.51 15.51
February 2012 51.10 51.10
July 2012 14.32 14.32
January 2013 14.08 14.08
February 2013 92.32 92.32
July 2013 11.92 11.92
January 2014 - January 2016 11.48 11.48
February 2016 164.85 164.85
July 2016 7.62 7.62
January 2017 6.85 6.85
February 2017 32.97 32.97
July 2017 6.07 6.07
January 2018 - July 2018 5.92 5.92
December 2018 82.43 82.43
January 2019 5.43 5.43
July 2019 - July 2020 3.99 3.99
January 2021 3.99 16.49 20.48
July 2021 - January 2023 3.99 3.99
June 2023 82.42 82.42
July 2023 3.43 82.43 85.86
</TABLE>
Pennsylvania 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>
July 1995 - February 2005 $ 4.40 $ 4.40
March 2005 4.00 $ 160.25 164.25
April 2005 3.65 3.65
May 2005 3.24 160.26 163.50
June 2005 - November 2005 2.88 2.88
December 2005 2.59 112.18 114.77
January 2006 - August 2006 2.34 2.34
September 2006 1.91 160.25 162.16
October 2006 - July 2007 1.53 1.53
August 2007 1.53 32.06 33.59
September 2007 - June 2015 1.38 1.38
July 2015 .97 160.25 161.22
August 2015 - December 2020 .62 .62
January 2021 .25 160.26 160.51
September 2022 32.05 32.05
</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>
July 1995 $ 4.43 $ 4.43
January 1996 - January 2005 26.61 26.61
March 2005 $ 160.25 160.25
May 2005 160.26 160.26
July 2005 21.23 21.23
December 2005 112.18 112.18
January 2006 16.60 16.60
July 2006 14.17 14.17
September 2006 160.25 160.25
January 2007 10.47 10.47
July 2007 9.27 9.27
August 2007 32.06 32.06
January 2008 8.50 8.50
July 2008 - January 2015 8.35 8.35
July 2015 7.95 160.25 168.20
January 2016 - July 2020 3.81 3.81
January 2021 3.44 160.26 163.70
September 2022 32.05 32.05
</TABLE>
North Carolina Quality Trust
Monthly
<TABLE>
<CAPTION>
Estimated Estimated Estimated
Distribution Dates Interest Principal Total
(Each Month) Distribution Distribution Distribution
<S> <C> <C> <C> <C> <C> <C>
July 1995 - May 2005 $ 4.45 $ 4.45
June 2005 4.45 $ 331.45 335.90
July 2005 - November 2005 2.83 2.83
December 2005 2.83 41.43 44.26
January 2006 - November 2006 2.61 2.61
December 2006 2.61 49.72 52.33
January 2007 - February 2014 2.36 2.36
March 2014 2.36 99.44 101.80
April 2014 - December 2014 1.98 1.98
January 2015 1.98 165.72 167.70
February 2015 - January 2017 1.20 1.20
February 2017 1.20 122.64 123.84
March 2017 - September 2018 .61 .61
October 2018 .61 165.73 166.34
</TABLE>
Semi-annual
<TABLE>
<CAPTION>
Distribution Dates Estimated Estimated Estimated
(Each May and November Interest Principal Total
Unless Otherwise Indicated) Distribution Distribution Distribution
<S> <C> <C> <C> <C> <C> <C>
November 1995 $ 22.42 $ 22.42
May 1996 - May 2005 26.91 26.91
June 2005 $ 331.45 331.45
November 2005 18.75 18.75
December 2005 41.43 41.43
May 2006 16.02 16.02
November 2006 15.80 15.80
December 2006 49.72 49.72
May 2007 14.55 14.55
November 2007 - November 2013 14.30 14.30
March 2014 99.44 99.44
May 2014 13.53 13.53
November 2014 11.98 11.98
January 2015 165.72 165.72
May 2015 8.85 8.85
November 2015 - November 2016 7.28 7.28
February 2017 122.64 122.64
May 2017 5.50 5.50
November 2017 - May 2018 3.71 3.71
October 2018 3.09 165.73 168.82
</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 10
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 29
ARIZONA IM-IT TRUST 33
MINNESOTA IM-IT TRUST 38
PENNSYLVANIA IM-IT TRUST 42
NORTH CAROLINA QUALITY TRUST 50
NOTES TO PORTFOLIOS 57
UNDERWRITING 59
TRUST ADMINISTRATION 62
Fund Administration and Expenses 62
Sponsor 62
Compensation of Sponsor and Evaluator 66
Trustee 66
Trustee's Fee 67
Portfolio Administration 68
Sponsor Purchases of Units 68
Insurance Premiums 69
Miscellaneous Expenses 69
General 69
Amendment or Termination 69
Limitation on Liabilities 70
Unit Distribution 71
Sponsor and Underwriter Compensation 71
OTHER MATTERS 72
Legal Opinions 72
Independent Certified Public Accountants 72
FEDERAL TAX STATUS 72
DESCRIPTION OF SECURITIES RATINGS 76
REPORT OF INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS 78
STATEMENTS OF CONDITION 79
EQUIVALENT TAXABLE ESTIMATED CURRENT RETURN
TABLES 81
ESTIMATED CASH FLOWS TO UNITHOLDERS 83
</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
May 24, 1995
Insured MunicipalsIncome Trust and Investors' Quality Tax-Exempt
Trust,Multi-Series 252
IM-IT 350
Arizona IM-IT 13
Minnesota IM-IT 56
Pennsylvania IM-IT 202
North Carolina Quality 82
A Wealth of Knowledge A Knowledge of Wealthsm
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 Amendment of Registration Statement comprises the following papers
and documents:
The facing sheet and the Cross-Reference sheet
The Prospectus and the signatures
The consents of independent public accountants, ratings services
and legal counsel
The following exhibits:
1.1 Copy of Trust Agreement.
1.5 Form of Master Agreement Among Underwriters.
3.1 Opinion and consent of counsel as to legality of securities being
registered.
3.2 Opinion of counsel as to the Federal,
Arizona and Minnesota income tax status of securities being
registered.
3.3 Opinion and consent of counsel as to New York income tax status of
the Fund under New York law.
3.4 Opinion and consent of counsel as to income tax status to
Pennsylvania residents of Units of the Pennsylvania IM-IT Trust.
3.5 Opinion and consent of counsel as to income tax status to North
Carolina residents of Units of the North Carolina IM-IT Trust.
4.1 Consent of Interactive Data Services, Inc.
4.2 Consent of Standard & Poor's Ratings Group with respect to the
Insured Trusts.
4.3 Consent of Grant Thornton LLP.
4.4 Financial Data Schedule.
Signatures
The Registrant, Insured Municipals Income Trust and Investors'
Quality Tax-Exempt Trust, Multi-Series 252, hereby identifies Insured
Municipals Income Trust and Investors' Quality Tax-Exempt Trust, Multi-
Series 189 and Multi-Series 213 for purposes of the representations
required by Rule 487 and represents the following: (1) that the portfolio
securities deposited in the series as to the securities of which this
Registration Statement is being filed do not differ materially in type or
quality from those deposited in such previous series; (2) that, except to
the extent necessary to identify the specific portfolio securities
deposited in, and to provide essential financial information for, the
series with respect to the securities of which this Registration
Statement is being filed, this Registration Statement does not contain
disclosures that differ in any material respect from those contained in
the registration statements for such previous series as to which the
effective date was determined by the Commission or the staff; and (3)
that it has complied with Rule 460 under the Securities Act of 1933.
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Insured Municipals Income Trust and Investors' Quality Tax-
Exempt Trust, Multi-Series 252 has duly caused this Amendment to the
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 24th day of May, 1995.
Insured Municipals Income Trust and
Investors' Quality Tax-Exempt
Trust, Multi-Series 252
By Sandra A. Waterworth
Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below by the
following persons, in the capacities indicated on May 24, 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 )
Sandra A. Waterworth
(Attorney-in-fact*)
* A 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.
Exhibit 1.1
--
Insured Municipals Income Trust and
Investors' Quality Tax-Exempt Trust
Multi-Series 252
Trust Agreement
Dated: May 24, 1995
This Trust Agreement between Van Kampen American Capital
Distributors, Inc., as Depositor, American Portfolio Evaluation Services,
a division of Van Kampen American Capital Investment Advisory Corp., as
Evaluator, and The Bank of New York, as Trustee, sets forth certain
provisions in full and incorporates other provisions by reference to the
document entitled "Standard Terms and Conditions of Trust For Van Kampen
American Capital Distributors, Inc. Tax-Exempt Trust, Dated March 16,
1995" (herein called the "Standard Terms and Conditions of Trust"), and
such provisions as are set forth in full and such provisions as are
incorporated by reference constitute a single instrument. All references
herein to Articles and Sections are to Articles and Sections of the
Standard Terms and Conditions of Trust.
Witnesseth That:
In consideration of the premises and of the mutual agreements herein
contained, the Depositor and the Trustee agree as follows:
Part I
Standard Terms and Conditions of Trust
Subject to the provisions of Part II hereof, all the provisions
contained in the Standard Terms and Conditions of Trust are herein
incorporated by reference in their entirety and shall be deemed to be a
part of this instrument as fully and to the same extent as though said
provisions had been set forth in full in this instrument.
Part II
Special Terms and Conditions of Trust
The following special terms and conditions are hereby agreed to:
(a) The Bonds defined in Section 1.01(4), listed in the
Schedules hereto, have been deposited in the Trusts under this Trust
Agreement.
(b) The fractional undivided interest in and ownership of the
various Trusts represented by each Unit thereof is the amount set
forth under "Summary of Essential Financial Information-Fractional
Undivided Interest in the Trust per Unit" in the Prospectus.
(c) The approximate amounts, if any, which the Trustee shall
be required to advance out of its own funds and cause to be paid to
the Depositor pursuant to Section 3.05 shall be the amount per Unit
that the Trustee agreed to reduce its fee or pay Trust expenses set
forth in the footnotes to the "Per Unit Information" for each Trust
in the Prospectus times the number of units in such Trust referred
to in Part II (b) of this Trust Agreement.
(d) The First General Record Date and the amount of the second
distribution of funds from the Interest Account of each Trust shall
be the record date for the Interest Account and the amount set forth
under "Per Unit Information" for each Trust in the Prospectus.
(e) The First Settlement Date shall be the date set forth
under "Summary of Essential Financial Information-First Settlement
Date" in the Prospectus.
(f) Any monies held to purchase "when issued" bonds will be
held in noninterest bearing accounts.
(g) The Evaluation Time for purpose of sale, purchase or
redemption of Units shall be 4:00 P.M. Eastern time.
(h) As set forth in Section 3.05, the Record Dates and
Distribution Dates for each Trust are those dates set forth in the
section entitled "Per Unit Information" for each Trust as appears in
the Prospectus.
(i) As set forth in Section 3.15, the Evaluator's Annual
Supervisory Fee shall be that amount set forth in "Summary of
Essential Financial Information-Evaluator's Annual Supervisory Fee"
in the Prospectus.
(j) As set forth in Section 4.03, the Evaluator's Annual
Evaluation Fee shall be that amount, and computed on that basis, set
forth in "Summary of Essential Financial Information-Evaluator's
Annual Evaluation Fee" in the Prospectus.
(k) The Trustee's annual compensation as set forth under
Section 6.04, under each distribution plan shall be that amount as
specified in the Prospectus under the section entitled "Per Unit
Information" for each Trust and will include a fee to induce the
Trustee to advance funds to meet scheduled distributions.
(l) The sixth paragraph of Section 3.05 is hereby revoked and
replaced by the following paragraph:
Unitholders desiring to receive semi-annual
distributions and who purchase their Units prior to the Record
Date for the second distribution under the monthly plan of
distribution may elect at the time of purchase to receive
distributions on a semi-annual basis by notice to the Trustee.
Such notice shall be effective with respect to subsequent
distributions until changed by further notice to the Trustee.
Unitholders desiring to receive semi-annual distributions and
who purchse their Units prior to the Record Date for the first
distribution may elect at the time of purchase to receive
distributions on a semi-annual basis by notice to the Trustee.
Such notice shall be effective with respect to subsequent
distributions until changed by further notice to the Trustee.
Changes in the plan of distribution will become effective as of
opening of business on the day after the next succeeding semi-
annual Record Date and such distributions will continue until
further notice.
(m) Sections 8.02(d) and 8.02(e) are hereby revoked and
replaced with the following:
(d) distribute to each Unitholder of such Trust such
holder's pro rata share of the balance of the Interest Account
of such Trust;
(e) distribute to each Unitholder of such Trust such
holder's pro rata share of the balance of the Principal Account
of such Trust; and
In Witness Whereof, Van Kampen American Capital Distributors, Inc.
has caused this Trust Agreement to be executed by one of its Vice
Presidents or Assistant Vice Presidents and its corporate seal to be
hereto affixed and attested by its Secretary or one of its Vice
Presidents or Assistant Secretaries, American Portfolio Evaluation
Services, a division of Van Kampen American Capital Investment Advisory
Corp., has caused this Trust Indenture and Agreement to be executed by
its President or one of its Vice Presidents and its corporate seal to be
hereto affixed and attested to by its Secretary, its Assistant Secretary
or one of its Assistant Vice Presidents and The Bank of New York, has
caused this Trust Agreement to be executed by one of its Vice Presidents
and its corporate seal to be hereto affixed and attested to by one of its
Vice Presidents, Assistant Vice Presidents or Assistant Treasurers; all
as of the day, month and year first above written.
VAN KAMPEN AMERICAN CAPITAL
DISTRIBUTORS, INC., Depositor
By Sandra A. Waterworth
Vice President
[Seal]
Attest:
By Gina M. Scumaci
Assistant Secretary
American Portfolio Evaluation
Services a division of Van Kampen
American Capital Investment
Advisory Corp.
By Dennis J. Mcdonnell
President
[Seal]
Attest:
By Scott E. Martin
Secretary
The Bank Of New York
By Jeffrey Bieselin
Vice President
[Seal]
Attest:
By Norbert Loney
Assistant Treasurer
Schedules to Trust Agreement
Securities Initially Deposited
Insured Municipals Income Trust and
Investors' Quality Tax-Exempt Trust
Multi-Series 252
(Note: Incorporated herein and made a part hereof as indicated below
are the corresponding "Portfolios" of each of the Trusts as set
forth in the Prospectus.)
Exhibit 1.5
Dated: June 1, 1992
--
Master Agreement Among Underwriters
For Unit Investment Trusts Sponsored by
Van Kampen American Capital Distributors, Inc.
Van Kampen American Capital Distributors, Inc.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
Gentlemen:
1. The Trust. We understand that you, Van Kampen American Capital
Distributors, Inc. (the "Sponsor"), are entering into this agreement (the
"Agreement") in counterparts with us and other firms who may be
underwriters for issues of various series of unit investment trusts for
which you will act as Sponsor. This Agreement shall apply to any
offering after May 1, 1992 of units of fractional undivided interest in
such various series unit investment trusts in which we elect to act as an
underwriter (underwriters with respect to each such trust being
hereinafter called "Underwriters") after receipt of a notice from you
stating the name and size of the trust and that our participation as an
Underwriter in the proposed offering shall be subject to the provisions
of this Agreement. The issuer of the units of fractional undivided
interests in a series of a unit investment trust offered in any offering
of units made pursuant to this Agreement is hereinafter referred to as
the "Trust" and the reference to "Trust" in this Agreement applies only
to such Trust, and such units of such Trust offered are hereinafter
called the "Units". Each Trust is or will be registered as a "unit
investment trust" under the Investment Company Act of 1940 (the "1940
Act") by appropriate filings with the Securities and Exchange Commission
(the "Commission"). Additionally, each Trust is or will be registered
with the Commission under the Securities Act of 1933 (the "1933 Act") on
Form S-6 or its successor forms, including a proposed form of prospectus
(the "Preliminary Prospectus").
The registration statement as finally amended and revised at the
time it becomes effective is herein referred to as the "Registration
Statement" and the related prospectus is herein referred to as the
"Prospectus", except that if the prospectus filed by the Trust pursuant
to Rule 424(b) under the 1933 Act shall differ from the prospectus on
file at the time the Registration Statement shall become effective, the
term "Prospectus" shall refer to the prospectus filed pursuant to Rule
424(b) from and after the date on which it shall have been filed.
The following provisions of this Agreement shall apply separately to
each individual offering of Units by a Trust.
We understand that as of the date upon which we have agreed to
underwrite Units of the Trust the Commission shall not have issued any
order preventing or restraining the use of any Preliminary Prospectus
and, further, that each Preliminary Prospectus shall conform in all
material respects to the requirements of the 1933 Act and the Rules and
Regulations thereunder and, as of its date, shall not include any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein not misleading; and when the Registration
Statement becomes effective, it and the Prospectus, and any amendments or
supplements thereto, will contain all statements that are required to be
stated therein in accordance with the 1933 Act and the Rules and
Regulations thereunder and will in all material respects conform to the
requirements of the 1933 Act and the Rules and Regulations thereunder,
and neither the Registration Statement nor the Prospectus, nor any
amendment or supplement thereto, will contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that you make no representation or warranty as to
information contained in or omitted from any Preliminary Prospectus, the
Registration Statement, the Prospectus or any such amendment or
supplement, in reliance upon and in conformity with, written information
furnished to you by or on behalf of any Underwriter specifically for use
in the preparation thereof.
2. Designation and Authority of Representative. You are hereby
authorized to act as our representative (the "Representative") in
connection with all matters to which this Agreement relates and to take
the action provided herein to be taken by you as you may otherwise deem
necessary or advisable. We understand that we have no obligations under
this Agreement with respect to any Trust in which we choose not to
participate as an Underwriter.
You will be under no liability to us for any act or omission except
for obligations expressly assumed by you herein and no obligations on
your part will be implied or inferred herefrom. The rights and
liabilities of the respective parties hereto are several and not joint,
and nothing herein or hereunder will constitute then a partnership,
association or separate entity.
3. Profit or Loss in Acquisition of Securities. It is understood
that the acquisition of securities (the "Securities") for deposit in the
portfolio of the Trust shall be at your cost and risk. We acknowledge
that you will share with us any net deposit profits in the amounts and to
the extent, if any, indicated under "Sponsor and Underwriter
Compensation" in the Prospectus. For the purposes of determining the
number of Units underwritten, we understand that we will be credited for
that number of Units set forth opposite our name in the section entitled
"Underwriting" in the prospectus.
We agree that you shall have no liability (as Representative or
otherwise) with respect to the issue form, validity, legality,
enforceability, value of, or title to the Securities, except for the
exercise of due care in determining the genuineness of such Securities
and the conformance thereof with the descriptions and qualifications
appearing in the Prospectus.
4. Purchase of Units. Promptly after you make a determination to
offer Units of a Trust and you inquire as to whether we desire to
participate in such offering, we will advise you promptly as to the
number of Units which we will purchase or of our decision not to
participate in such offering. Such advice may be written or oral. The
delivery to the Sponsor of a completed Schedule A to this Agreement shall
constitute adequate written advice. Oral advice shall be binding but
shall be promptly confirmed in writing by us by means of telegraph,
telegram or other form of wire or facsimile transmission. Such written
confirmation shall contain the information requested by Schedule A to
this Agreement. You may rely on and we hereby commit on the terms and
conditions of this Agreement to purchase and pay for the number of Units
of the Trust set forth in such advice (the "Unit Commitment"). Our Unit
Commitment may be increased only by mutual agreement between us and you
at any time prior to the date as of which the Trust Agreement for the
Trust is executed (the "Date of Deposit"). We agree that you in your
sole discretion reserve the right to decrease our Unit Commitment at any
time prior to the Date of Deposit and if you so elect to make such a
decrease, you will notify us of such an election by telephone and
promptly confirm the same in writing.
The price to be paid for such Units shall be the Public Offering
Price per Unit (as defined in the Prospectus) as first determined on the
Date of Deposit or such later determination on such Date of Deposit as
you shall advise us, less the sum per Unit indicated under "Sponsor and
Underwriter Compensation" in the Prospectus. Further, each Underwriter
who underwrites that number of Units indicated under "Sponsor and
Underwriter Compensation" in the Prospectus will receive from the Sponsor
that additional compensation indicated under such section of the
Prospectus for each Unit it underwrites, providing the Trust size is in
excess of that number of Units, if any, indicated under such section of
the Prospectus. At the Date of Deposit, we will become the owner of the
Units and be entitled to the benefits (except for interest, if any,
accruing from the Date of Deposit to the First Settlement Date) as well
as the risks inherent therein. We acknowledge that those persons, if
any, named in the Prospectus under "Sponsor and Underwriter Compensation"
are Managing or Co-Managing Underwriters of the Trust, as indicated
therein, and we acknowledge that those persons specifically named therein
will receive as additional compensation those respective per Unit amounts
set forth in such section of the Prospectus.
You are authorized to retain custody of our Units until the
Registration Statement relating thereto has become effective under the
1933 Act and you shall have received payment from us for such Units.
You are authorized to file an amendment to said Registration
Statement describing the Securities and furnishing information based
thereon or relating thereto and any further amendments or supplements to
the Registration Statement or Prospectus which you may deem necessary or
advisable. We will furnish to you upon your request such information as
will be required to insure that the Registration Statement and Prospectus
are current insofar as they relate to us and we thereafter continue to
furnish you with such information as may be necessary to keep current and
correct the information previously supplied.
We understand that the Trust will also take action with respect to
the offering and sale of Units in accordance with the Blue Sky or
securities laws of certain states in which it is proposed that the Units
may be offered and sold.
5. Public Offering. You agree that you will advise us promptly
when the Registration Statement has become effective, and we agree that
when we are advised that the Units are released for public offering, we
will make a public offering thereof by means of the Prospectus under the
1933 Act, as amended, which describes the deposit of Securities and
related information. The Public Offering Price and the terms and
conditions of the public offering shall be as set forth in the Prospectus
and shall rely with respect to the offering price of the Securities upon
the determination of the Evaluator named in the Prospectus. Public
advertisement of the offering, if any, shall be made by you on behalf of
the Underwriters on such date as you shall determine. We agree that
before we use any Trust advertising material which we have created, we
will obtain your prior approval to use such advertising materials.
6. Public Offering Price. We agree that each day while this
Agreement is in effect and the evaluation of the Trust is made by the
Evaluator named in the Prospectus, we will contact you for such
evaluation and of the resultant Public Offering Price for the purpose of
the offering and sale of the respective Units to the public. We agree as
required by Section 22(d) of the 1940 Act to offer and sell our Units at
the current Public Offering Price described in the Prospectus.
7. Permitted Transactions. It is agreed that part or all of the
Units purchased by us may be sold to dealers, or other entities with whom
we can legally grant a concession or agency commission, only at the then
effective Public Offering Price, less the concession described in the
Prospectus.
From time to time prior to the termination of this Agreement, at
your Request, we will advise you of the number of our Units which remain
unsold and, at your request, we agree to deliver to you any of such
unsold Units to be sold for our account to retail accounts or, less the
concession or agency commission then effective, to dealers or others.
If prior to the termination of this Agreement, or such earlier date
as you may determine and advise us thereof in writing, you shall purchase
or contract to purchase any of our Units or any Units issued in exchange
therefor, in the open market or otherwise, or if any such Units shall be
tendered to the Trustee for redemption because not effectively placed for
investment by us, we agree to repurchase such Units at a price equal to
the total cost of such purchase, including accrued interest and
commissions, if any, and transfer taxes on redelivery. Regardless of the
amount paid on the repurchase of any such Units, it is agreed that they
may be resold by us only at the then effective Public Offering Price.
Until the termination of this Agreement, we agree that we will make
no purchase of Units other than (i) purchases provided for in this
Agreement, (ii) purchases approved by you and (iii) purchases as broker
in executing unsolicited orders.
8. Compliance With Commission Order. We hereby agree as follows:
(a) we will refund all sales charges to purchasers of Units from us or
any dealer participating in the distribution of Units who purchased such
Units from us if, within ninety days from the time that the Registration
Statement of the respective Units under the 1933 Act shall have become
effective, (i) the net worth of the trust shall be reduced to less than
20% of the principal amount of Securities originally deposited therein or
(ii) the Trust shall have been terminated; (b) you may instruct the
Trustee on the Date of Deposit that, in the event that redemption by any
Underwriters of Units constituting part of any unsold allotment of Units
shall result in the Trust having a net worth of less than 40% of the
principal amount of Securities originally deposited therein, the Trustee
shall terminate the Trust in the manner provided in the Trust Indenture
and Agreement (as defined in the Prospectus) and distribute the
Securities and other assets of the Trust pursuant to the provisions of
the Trust Indenture and Agreement; and (c) in the event that the Trust
shall have been terminated pursuant to (b) above, we will refund any
sales charges to any purchaser of such Units who purchased from us, or
purchased from a dealer participating in the distribution of such Units
who purchased such Units from us. We authorize you to charge our account
for all refunds of sales charges in respect to our Units.
9. Substitution of Underwriters. We authorize you to arrange for
the substitution hereunder of other persons, who may include you and us,
for all or any part of the commitment of any nondefaulting Underwriter
with the consent of such Underwriter, and of any defaulting Underwriter
without the consent thereof, upon such terms and conditions as you may
deem advisable, provided that the number of Units to be purchased by us
shall not be increased without our consent and that such substitution
shall not in any way affect the liability of any defaulting Underwriter
to the other Underwriters for damages from such default, nor relieve any
other Underwriter of any obligation under this Agreement. The expenses
chargeable to the account of any defaulting Underwriter and not paid for
by it or by a person substituted for such Underwriter and any additional
losses or expenses arising from such default shall be considered to be
expenses under this Agreement and shall be charged against the accounts
of the nondefaulting Underwriters in proportion to their respective
commitments.
10. Termination. This Agreement shall terminate with respect to
each Trust which we have agreed to underwrite 30 days after the date on
which the public offering of the Units of such Trust is made in
accordance with Section 5 hereof unless sooner terminated by you,
provided that you may extend this Agreement for not more than eleven
successive periods of 30 days each upon notice to us and each of the
other Underwriters.
Notwithstanding any settlement on the termination of this Agreement,
we agree to pay our share of any amount payable on account of any claim,
demand or liability which may be asserted against the Underwriters, or
any of them, based on the claim that the Underwriters constitute an
association, unincorporated business or other separate entity and our
share of any expenses incurred by you in defending against any such
claim, demand or liability. We also agree to pay any stamp taxes which
may be assessed and paid after such settlement on account of any Units
received or sold hereunder for our account.
Notwithstanding any termination of this Agreement, no sales of the
Units shall be made by us at any time except in conformity with the
provisions of Section 22(d) of the 1940 Act.
11. Default by Other Underwriters. Default by any one or more of
the other Underwriters in respect of their several obligations under this
Agreement shall neither release you nor us from any of our respective
obligations hereunder.
12. Notices. Notices hereunder shall by deemed to have been duly
given if mailed or telegraphed to us at our address set forth below, in
the case of notices to us, or to you at your address set forth at the
head of this Agreement, in the case of notices to you.
13. Net Capital. You represent that you, and we represent that we,
are in compliance with the capital requirements of Rule 15c-3-1
promulgated by the Commission under the Securities and Exchange Act of
1934, and we may, in accordance with and pursuant to such Rule 15c-3-1,
agree to purchase the amount of Units to be purchased by you and us,
respectively, under the Agreement.
14. Miscellaneous. We confirm that we are a member in good
standing of the National Association of Securities Dealers, Inc.
We confirm that we will take reasonable steps to provide the
Preliminary Prospectus or final Prospectus to any person making written
request therefor to us and to make the Preliminary Prospectus or the
final Prospectus available to each person associated with us expected to
solicit customers' orders for the Units prior to the effective
registration date and the final Prospectus if he is expected to offer the
Units after the effective date. We understand that you will supply us
upon our request with sufficient copies of such prospectuses to comply
with the foregoing.
This Agreement is being executed by us and delivered to you in
duplicate. Upon your confirmation hereof and of agreements in identical
form with each of the other Underwriters, this Agreement shall constitute
a valid and binding contract between us.
Very truly yours,
Confirmed as of the date set forth Indicated below our firm name and
at the head of this Agreement address exactly as we wish to appear
in the Prospectus
VAN KAMPEN AMERICAN CAPITAL
DISTRIBUTORS, INC.
By____________________________ ____________________________________
Title__________________________ ____________________________________
____________________________________
Exhibit 3.1
Chapman and Cutler
111 West Monroe Street
Chicago, Illinois 60603
May 24, 1995
Van Kampen American Capital Distributors, Inc.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
Re: Insured Municipals Income Trust and Investors' Quality
Tax-Exempt Trust, Multi-Series 252
Gentlemen:
We have served as counsel for Van Kampen American Capital
Distributors, Inc., Sponsor and Depositor of Insured Municipals Income
Trust and Investors' Quality Tax-Exempt Trust, Multi-Series 252
(hereinafter referred to as the "Fund"), in connection with the
preparation, execution and delivery of a Trust Agreement dated May 24,
1995 between Van Kampen American Capital Distributors, Inc., as
Depositor, American Portfolio Evaluation Services, a division of Van
Kampen American Capital Investment Advisory Corp., as Evaluator, and The
Bank of New York, as Trustee, pursuant to which the Depositor has
delivered to and deposited Bonds listed in the Schedules to the Trust
Agreement with the Trustee and pursuant to which the Trustee has issued
to or on the order of the Depositor a certificate or certificates
representing Units of fractional undivided interest in and ownership of
the several Trusts of said Fund (hereinafter referred to as the "Units")
created under said Trust Agreement.
In connection therewith, we have examined such pertinent records and
documents and matters of law as we have deemed necessary in order to
enable us to express the opinions hereinafter set forth.
Based upon the foregoing, we are of the opinion that:
1. The execution and delivery of the Trust Agreement and the
execution and issuance of certificates evidencing the Units in the
several Trusts of the Fund have been duly authorized; and
2. The certificates evidencing the Units in the several
Trusts of the Fund when duly executed and delivered by the Depositor
and the Trustee in accordance with the aforementioned Trust
Agreement, will constitute valid and binding obligations of such
Trusts and the Depositor in accordance with the terms thereof.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement (File No. 33-58953) relating to the Units referred
to above and to the use of our name and to the reference to our firm in
said Registration Statement and in the related Prospectus.
Respectfully submitted,
Chapman and Cutler
MJK/cjw
Exhibit 3.2
--
Chapman and Cutler
111 West Monroe Street
Chicago, Illinois 60603
May 24, 1995
Van Kampen American Capital Distributors, Inc.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
The Bank of New York
Unit Investment Trust Division
101 Barclay Street
New York, New York 10286
Re: Insured Municipals Income Trust and Investors' Quality
Tax-Exempt Trust, Multi-Series 252
______________________________________________
Gentlemen:
We have acted as counsel for Van Kampen American Capital
Distributors, Inc., Depositor of Insured Municipals Income Trust and
Investors' Quality Tax-Exempt Trust, Multi-Series 252 (the "Fund"), in
connection with the issuance of Units of fractional undivided interest in
the several Trusts of said Fund under a Trust Agreement dated May 24,
1995 (the "Indenture") between Van Kampen American Capital Distributors,
Inc., as Depositor, American Portfolio Evaluation Services, a division of
Van Kampen American Capital Investment Advisory Corp., as Evaluator, and
The Bank of New York, as Trustee.
In this connection, we have examined the Registration Statement, the
form of Prospectus proposed to be filed with the Securities and Exchange
Commission, the Indenture and such other instruments and documents as we
have deemed pertinent.
Based upon the foregoing and upon an investigation of such matters
of law as we consider to be applicable, we are of the opinion that, under
existing Federal income tax law:
(i) Each Trust is not an association taxable as a corporation
but will be governed by the provisions of subchapter J (relating to
trusts) of chapter 1, Internal Revenue Code of 1986 (the "Code").
(ii) Each Unitholder will be considered as owning a pro rata
share of each asset of the respective Trust in the proportion that
the number of Units of such Trust held by him bears to the total
number of Units outstanding of such Trust. Under subpart E,
subchapter J of chapter 1 of the Code, income of each Trust will be
treated as income of each Unitholder of the respective Trust in the
proportion described, and an item of Trust income will have the same
character in the hands of a Unitholder as it would have in the hands
of the Trustee. Accordingly, to the extent that the income of a
Trust consists of interest excludable from gross income under
Section 103 of the Code, such income will be excludable from Federal
gross income of the Unitholders, except in the case of a Unitholder
who is a substantial user (or a person related to such user) of a
facility financed through issuance of any industrial development
bonds or certain private activity bonds held by the respective
Trust. In the case of such Unitholder (and no other) interest
received with respect to his Units attributable to such industrial
development bonds or such private activity bonds is includable in
his gross income. In the case of certain corporations, interest on
the Bonds is included in computing the alternative minimum tax
pursuant to Section 56(c) of the Code, the environmental tax (the
"Superfund Tax") imposed by Section 59A of the Code, and the branch
profits tax imposed by Section 884 of the Code with respect to U.S.
branches of foreign corporations.
(iii) Gain or loss will be recognized to a Unitholder upon
redemption or sale of his Units. Such gain or loss is measured by
comparing the proceeds of such redemption or sale with the adjusted
basis of the Units represented by his Certificate. Before
adjustment, such basis would normally be cost if the Unitholder had
acquired his Units by purchase, plus his aliquot share of advances
by the Trustee to the Trust to pay interest on Bonds delivered after
the Unitholder's settlement date to the extent that such interest
accrued on the Bonds during the period from the Unitholder's
settlement date to the date such Bonds are delivered to the
respective Trust, but only to the extent that such advances are to
be repaid to the Trustee out of interest received by such Trust with
respect to such Bonds. In addition, such basis will be increased by
the Unitholder's aliquot share of the accrued original issue
discount with respect to each Bond held by the Trust with respect to
which there was an original issue discount at the time the Bond was
issued and reduced by the annual amortization of bond premium, if
any, on Bonds held by the Trust.
(iv) If the Trustee disposes of a Trust asset (whether by sale,
payment on maturity, redemption or otherwise) gain or loss is
recognized to the Unitholder and the amount thereof is measured by
comparing the Unitholder's aliquot share of the total proceeds from
the transaction with his basis for his fractional interest in the
asset disposed of. Such basis is ascertained by apportioning the
tax basis for his Units among each of the Trust assets (as of the
date on which his Units were acquired) ratably according to their
values as of the valuation date nearest the date on which he
purchased such Units. A Unitholder's basis in his Units and of his
fractional interest in each Trust asset must be reduced by the
amount of his aliquot share of interest received by the Trust, if
any, on Bonds delivered after the Unitholder's settlement date to
the extent that such interest accrued on the Bonds during the period
from the Unitholder's settlement date to the date such Bonds are
delivered to the Trust, must be reduced by the annual amortization
of bond premium, if any, on Bonds held by the Trust and must be
increased by the Unitholder's share of the accrued original issue
discount with respect to each Bond which, at the time the Bond was
issued, had original issue discount.
(v) In the case of any Bond held by the Trust where the
"stated redemption price at maturity" exceeds the "issue price",
such excess shall be original issue discount. With respect to each
Unitholder, upon the purchase of his Units subsequent to the
original issuance of Bonds held by the Trust, Section 1272(a)(7) of
the Code provides for a reduction in the accrued "daily portion" of
such original issue discount upon the purchase of a Bond subsequent
to the Bond's original issue, under certain circumstances. In the
case of any Bond held by the Trust the interest on which is
excludable from gross income under Section 103 of the Code, any
original issue discount which accrues with respect thereto will be
treated as interest which is excludable from gross income under
Section 103 of the Code.
(vi) We have examined the Municipal Bond Unit Investment Trust
Insurance policies, if any, issued to certain of the Trusts on the
Date of Deposit by AMBAC Indemnity Corporation, Financial Guaranty
Insurance Corporation or a combination thereof. Each such policy,
or a combination of such policies, insures all bonds held by the
Trustee for that particular Trust (other than bonds described in
paragraph (vii)) against default in the prompt payment of principal
and interest. In our opinion, any amount paid under each said
policy, or a combination of said policies, which represents 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 bonds 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 bonds, rather than the insurer, will pay debt service
on the bonds. Paragraph (ii) of this opinion is accordingly
applicable to insurance proceeds representing maturing interest.
(vii) Certain bonds in the portfolios of certain of the Insured
Trusts have been insured by the issuers thereof against default in
the prompt payment of principal and interest. Insurance has been
obtained for such bonds, or, in the case of a commitment, the bonds
will be ultimately insured under the terms of such an insurance
policy, which are designated as issuer insured bonds on the
portfolio pages of the respective Trusts in the prospectus for the
Fund, by the issuer of such bonds. Insurance obtained by the issuer
is effective so long as such bonds remain outstanding. For each of
these bonds, we have been advised that the aggregate principal
amount of such bonds listed on the portfolio page for the respective
Trust was acquired by the applicable Trust and are part of the
series of such bonds listed on the portfolio page for the respective
Trust in the aggregate principal amount listed on the portfolio page
for the respective Trust. Based upon the assumption that the bonds
acquired by the applicable Trust are part of the series covered by
an insurance policy or, in the case of a commitment, will be
ultimately insured under the terms of such an insurance policy, it
is our opinion that any amounts received by the applicable Trust
representing maturing interest on such bonds will be excludable from
federal gross income if, and to the same extent as, such interest
would have been so excludable if paid in normal course by the Issuer
notwithstanding the source of the payment is from policy proceeds.
Paragraph (ii) of this opinion is accordingly applicable to such
payment.
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.
Because the Trusts do not include any "private activity" bonds
within the meaning of Section 141 of the Code issued on or after August
15, 1986, none of the Trust Fund's interest income shall be treated as an
item of tax preference when computing the alternative minimum tax. In
the case of corporations, for taxable years beginning after December 31,
1986, the alternative minimum tax and the Superfund Tax depend upon the
corporation's taxable income with certain adjustments.
Pursuant to Section 56(c) of the Code, one of the adjustment items
used in computing alternative minimum taxable income ("AMTI") and the
Superfund Tax of a corporation (other than an S corporation, Regulated
Investment Company, Real Estate Investment Trust or REMIC) for taxable
years beginning after 1989, is an amount equal to 75% of the excess of
such corporation's "adjusted current earnings" over an amount equal to
its AMTI (before such adjustment item and the alternative tax net
operating loss deduction). "Adjusted current earnings" includes, all tax-
exempt interest, including interest on all Bonds in the Trust, and tax-
exempt original issue discount.
Effective for tax returns filed after December 31, 1987, all
taxpayers are required to disclose to the Internal Revenue Service the
amount of tax-exempt interest earned during the year.
Section 265 of the Code provides for a reduction in each taxable
year of 100 percent of the otherwise deductible interest on indebtedness
incurred or continued by financial institutions, to which either Section
585 or Section 593 of the Code applies, to purchase or carry obligations
acquired after August 7, 1986, the interest on which is exempt from
Federal income taxes for such taxable year. Under rules prescribed by
Section 265, the amount of interest otherwise deductible by such
financial institutions in any taxable year which is deemed to be
attributable to tax-exempt obligations acquired after August 7, 1986,
will be the amount that bears the same ratio to the interest deduction
otherwise allowable (determined without regard to Section 265) to the
taxpayer for the taxable year as the taxpayer's average adjusted basis
(within the meaning of Section 1016) of tax-exempt obligations acquired
after August 7, 1986, bears to such average adjusted basis for all assets
of the taxpayer, unless such financial institution can otherwise
establish, under regulations, to be prescribed by the Secretary of the
Treasury, the amount of interest on indebtedness incurred or continued to
purchase or carry such obligations.
We also call attention to the fact that, under Section 265 of the
Code, interest on indebtedness incurred or continued to purchase or carry
Units is not deductible for Federal income tax purposes. Under rules
used by the Internal Revenue Service for determining when borrowed funds
are considered used for the purpose of purchasing or carrying particular
assets, the purchase of Units may be considered to have been made with
borrowed funds even though the borrowed funds are not directly traceable
to the purchase of Units. However, these rules generally do not apply to
interest paid on indebtedness incurred for expenditures of a personal
nature such as a mortgage incurred to purchase or improve a personal
residence.
"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).
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.
We have also examined the income tax law of the State of Arizona
(the "State"), which is based upon the Federal Law, to determine its
applicability to the Arizona IM-IT Trust (the "Arizona Trust") being
created as part of the Fund and to the holders of Units in the Arizona
Trust who are residents of the State ("Arizona Unitholders").
The assets of the Arizona Trust will consist of interest-bearing
obligations issued by or on behalf of the State of Arizona (the "State"),
its political subdivisions and authorities (the "Bonds"), provided the
interest on such Bonds received by the Arizona Trust is exempt from State
income taxes.
Although we express no opinion with respect thereto, in rendering
the opinion expressed herein, we have assumed that the Bonds were validly
issued by the State of Arizona or its instrumentalities or
municipalities.
Based on the foregoing, and review and consideration of existing
State laws, it is our opinion, and we herewith advise you, as follows:
(1) For State income tax purposes, each Unitholder will be
treated as the owner of a pro rata portion of the Arizona Trust, and
the income of the Arizona Trust will therefore be treated as the
income of the Unitholder under State law.
(2) For State income tax purposes, interest on the Bonds which
is excludable from Federal gross income and which is exempt from
State income taxes when received by the ArizonaTrust, and which
would be excludable from Federal gross income and exempt from State
income taxes if received directly by a Unitholder, will retain its
status as tax-exempt interest when received by the Arizona Trust and
distributed to the Unitholders.
(3) To the extent that interest derived from the Arizona Trust
by a Unitholder with respect to the Bonds is excludable from Federal
gross income, such interest will not be subject to State income
taxes.
(4) Each Unitholder will realize taxable gain or loss for
State income tax purposes when Bonds held in the Arizona Trust are
sold, exchanged, redeemed prior to maturity or paid at maturity, or
when the Unitholder redeems or sells his Unit(s), at a price that
differs from original cost as adjusted for accretion of any discount
or amortization of any premium and other basis adjustments,
including any basis reduction that may be required to reflect a
Unitholder's share of interest, if any, accruing on Bonds during the
interval between the Unitholder's settlement date and the date such
Bonds are delivered to the Arizona Trust, if later.
(5) State law does not permit a deduction for interest paid or
incurred on indebtedness incurred or continued to purchase or carry
Units in the Arizona Trust, the interest on which is exempt from
State income taxes.
(6) Neither the Bonds nor the Units will be subject to State
property taxes, sales taxes or use taxes.
(7) In the case of Arizona Trusts for which an insurance
policy or policies with respect to the payment of principal and
interest on the Arizona Bonds has been obtained by the Depositor,
any proceeds paid under such policy or policies issued to the
Arizona Trust, if any, with respect to the Bonds in the Arizona
Trust which represent maturing interest on defaulted obligations
held by the Trustee will be exempt from State income taxes if, and
to the same extent as, such interest would have been so exempt 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 Bonds, rather than the
insurer, will pay debt service on the Bonds.
We have not examined any of the Bonds to be deposited and held in
the Arizona 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.
We understand that the Minnesota Trust will only have income
consisting of (i) interest from bonds issued by the State of Minnesota
and its political and governmental subdivisions, municipalities and
governmental agencies and instrumentalities and bonds issued by
possessions of the United States which would be exempt from federal and
Minnesota income taxation when paid directly to an individual, trust or
estate (the "Bonds"), (ii) gain on the disposition of such Bonds, and
(iii) proceeds paid under certain insurance policies issued to the
Trustee or to the issuers of the Bonds which represent maturing interest
or principal payments on defaulted Bonds held by the Trustee.
Neither the Sponsor nor its counsel have independently examined the
Bonds to be deposited in and held in the 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
excludible from gross income for federal income tax purposes and (iii)
the interest thereon is exempt from income tax imposed by Minnesota that
is applicable to individuals, trusts and estates (the "Minnesota Income
Tax"). It should be noted that interest on the Bonds is subject to tax
in the case of corporations subject to the Minnesota Corporate Franchise
Tax or the Corporate Alternative Minimum Tax and is a factor in the
computation of the Minimum Fee applicable to financial institutions. The
opinion set forth below does not address the taxation of persons other
than full time residents of Minnesota.
In the opinion of Chapman and Cutler, Counsel to the Sponsor, under
existing Minnesota income tax law as of the date of this prospectus and
based upon the assumptions above:
(1) The Minnesota Trust is not an association taxable as a
corporation and each Unitholder of the Minnesota Trust will be
treated as the owner of a pro rata portion of the Minnesota Trust,
and the income of such portion of the Minnesota Trust will therefore
be treated as the income of the Unitholder for Minnesota Income Tax
purposes;
(2) Income on the Bonds which is exempt from the Minnesota
Income Tax when received by a Unitholder of the Minnesota Trust and
which would be exempt from the Minnesota Income Tax if received
directly by a Unitholder, will retain its status as exempt from such
tax when received by the Minnesota Trust and distributed to such
Unitholder;
(3) To the extent that interest on the Bonds, if any, which is
includible in the computation of "alternative minimum taxable
income" for federal income tax purposes, such interest will also be
includible in the computation of "alternative minimum taxable
income" for purposes of the Minnesota Alternative Minimum Tax
imposed on individuals, estates and trusts and on corporations;
(4) Each Unitholder of the Minnesota Trust will recognize gain
or loss for Minnesota 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 Minnesota Trust to the
extent that such a transaction results in a recognized gain or loss
to such Unitholder for federal income tax purposes;
(5) Tax cost reduction requirements relating to amortization
of bond premium may, under some circumstances, result in Unitholders
realizing taxable gain for Minnesota Income Tax purposes when their
Units are sold or redeemed for an amount equal to or less than their
original cost;
(6) Proceeds, if any, paid under individual insurance policies
obtained by issuers of Bonds or the Trusteewhich represent maturing
interest on defaulted obligations held by the Trustee will be
excludible from Minnesota net income if, and to the same extent as,
such interest would have been so excludible if paid in the normal
course by the issuer of the defaulted obligation 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 bonds, rather than the
insurer, will pay debt service on the bonds; and
(7) To the extent that interest derived from the Minnesota
Trust by a Unitholder with respect to any Possession Bonds is
excludible 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 will not be subject to either the
Minnesota Income Tax or the Minnesota alternative minimum tax
imposed on individuals, estates and trusts. It should be noted that
interest relating to Possession Bonds is subject to tax in the case
of corporations subject to the Minnesota Corporate Franchise Tax or
the Corporate Alternative Minimum Tax.
We have not examined any of the Bonds to be deposited and held in
the Minnesota Trust or the proceedings for the issuance thereof or the
opinions of bond counsel with respect thereto, and therefore express no
opinions to the exemption from State income taxes of interest on the
Bonds if received directly by a Unitholder.
Very truly yours,
Chapman and Cutler
MJK/cjw
Exhibit 3.3
Tanner Propp & Farber
99 Park Avenue
New York, New York 10016
May 24, 1995
Insured Municipals Income Trust and
Investors' Quality Tax-Exempt Trust,
Multi-Series 252
c/o The Bank of New York,
As Trustee
101 Barclay Street, 17 West
New York, New York 10286
Dear Sirs:
We have acted as special counsel for the Insured Municipals Income
Trust and Investors' Quality Tax-Exempt Trust, Multi-Series 252 (the
"Fund") consisting of Insured Municipals Income Trust, Series 350,
Arizona Insured Municipals Income Trust, Series 13, Minnesota Insured
Municipals Income Trust, Series 56, Pennyslvania Insured Municipals
Income Trust, Series 202 and North Carolina Investors' Quality Tax-Exempt
Trust, Series 82 and (in the aggregate the "Trusts" and individually
"Trusts") for the purpose of determining the applicability of certain
New York taxes under the circumstances hereinafter described.
The Fund is created pursuant to a Trust Agreement (the
"Indenture"), dated as of today (the "Date of Deposit") among Van Kampen
American Capital Distributors, Inc. (the "Depositor"), 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
"Trustee"). As described in the prospectus relating to the Fund dated
today to be filed as an amendment to a registration statement previously
filed with the Securities and Exchange Commission (file number 33-58953)
under the Securities Act of 1933, as amended (the "Prospectus"), the
objectives of the Fund are the generation of income exempt from Federal
taxation and as regards each Trust denominated with the name of a state
exempt from income tax, if any, of the denominated in the name of that
Trust to the extent indicated in the Prospectus. No opinion is expressed
herein with regard to the Federal or State tax aspects of the bonds, the
Fund, and units of the Trust (the "Units"), or any interest, gains or
losses in respect thereof.
As more fully set forth in the Indenture and in the Prospectus, the
activities of the Trustee will include the following:
On the Date of Deposit, the Depositor will deposit with the Trustee
with respect to each Trusts, the total principal amount of interest
bearing obligations and/or contracts for the purchase thereof together
with an irrevocable letter of credit in the amount required for the
purchase price and accrued interest, if any, and, in the case of Trusts
denominated as "Insured," an insurance policy purchased by the Depositor
evidencing the insurance guaranteeing the timely payment of principal and
interest of the obligations comprising the corpus of that Trust other
than those obligations the timely payment of principal and interest of
which are guaranteed by an insurance policy purchased by the issuer
thereof or a prior owner, which may include the Depositor prior to the
Date of Deposit, as more fully set forth in the Prospectus with respect
to each Trust.
We understand with respect to the obligations described in the
preceding paragraph that all insurance, whether purchased by the
Depositor, the issuer or a prior owner, provides, or will provide, that
the amount paid by the insurer in respect of any bond may not exceed the
amount of principal and interest due on the bond and such payment will in
no event relieve the issuer from its continuing obligation to pay such
defaulted principal and interest in accordance with the terms of the
obligation.
The Trustee will not participate in the selection of the obligations
to be deposited in the Fund, and, upon the receipt thereof, will deliver
to the Depositor a registered certificate for the number of Units
representing the entire capital of each of the Trusts as more fully set
forth in the Prospectus and the Registration Statement. The Units, which
are represented by certificates ("Certificates"), will be offered to the
public by the Prospectus upon the effectiveness of the Registration
Statement.
The duties of the Trustee, which are ministerial in nature, will
consist primarily of crediting the appropriate accounts with interest
received by each of the Trusts and with the proceeds from the disposition
of obligations held in each of the Trusts and the distribution of such
interest and proceeds to the Unit holders of that Trust. The Trustee
will also maintain records of the registered holders of Certificates
representing an interest in each Trust and administer the redemption of
Units by such Certificate holders and may perform certain administrative
functions with respect to an automatic investment option.
Generally, obligations held in the Fund may be removed therefrom by
the Trustee only upon redemption prior to their stated maturity, at the
direction of the Depositor in the event of an advance refunding, or upon
the occurrence of certain other specified events which adversely affect
the sound investment character of the Fund, such as default by the issuer
in payment of interest or principal on the obligation and no provision
for payment is made therefor either pursuant to the portfolio insurance
or otherwise and the Depositor fails to instruct the Trustee, within
thirty (30) days after notification, to hold such obligation.
Prior to the termination of the Fund, the Trustee is empowered to
sell Bonds, from a list furnished by the Evaluator, only for the purpose
of redeeming Units tendered to it and of paying expenses for which funds
are not available. The Trustee does not have the power to vary the
investment of any Unit holder in the Fund, and under no circumstances may
the proceeds of sale of any obligations held by the Fund be used to
purchase new obligations to be held therein.
Article 9-A of the New York Tax Law imposes a franchise tax on
business corporations, and, for purposes of that Article, Section 208(l)
defines the term "corporation" to include, among other things, "any
business conducted by a trustee or trustees wherein interest or ownership
is evidenced by certificate or other written instrument."
The Regulations promulgated under Section 208 provide as follows:
The term "trust" includes any business conducted by a
trustee or trustees in which interest or ownership is
evidenced by certificate or other written instrument.
Such a trust includes, but is not limited to, an
association commonly referred to as a "business
trust" or "Massachusetts trust." In determining
whether a trustee or trustees are conducting a
business, the form of the agreement is of
significance but is not controlling. The actual
activities of the trustee or trustees, not their
purposes and powers, will be regarded as decisive
factors in determining whether a trust is subject to
tax under Article 9-A. The mere investment of funds
and the collection of income therefrom, with
incidental replacement of securities and reinvestment
of funds, does not constitute the conduct of a
business in the case of a business conducted by the
trustee or trustees. 20 NYCRR 1-2.3(b)(2) (July 11,
1990).
New York cases dealing with the question of whether a trust will be
subject to the franchise tax have also delineated the general rule that
where a trustee merely invests funds and collects and distributes the
income therefrom, the trust is not engaged in business and is not subject
to the franchise tax. Burrell v. Lynch, 274 A.D. 347, 84 N.Y.S.2d 171
(3rd Dept. 1948), order resettled, 274 A.D. 1073, 85 N.Y.S.2d 705 (1949).
An opinion of the Attorney General of the State of New York, 47 N.Y.
Atty. Gen. Rep. 213 (Nov. 24, 1942), it was held that where the trustee
of an unincorporated investment trust was without authority to reinvest
amounts received upon the sales of securities and could dispose of
securities making up the trust only upon the happening of certain
specified events or the existence of certain specified conditions, the
trust was not subject to the franchise tax.
In the instant situation, the Trustee is not empowered to sell
obligations contained in the corpus of the Fund and reinvest the proceeds
therefrom. Further, the power to sell such obligations is limited to
circumstances in which the creditworthiness or soundness of the
obligation is in question or in which cash is needed to pay redeeming
Unit holders or to pay expenses, or where the Fund is liquidated pursuant
to the termination of the Indenture. Only in circumstances in which the
issuer of an obligation attempts to refinance it can the Trustee exchange
an obligation for a new security. In substance, the Trustee will merely
collect and distribute income and will not reinvest any income or
proceeds, and the Trustee has no power to vary the investment of any Unit
holder in a Trust.
Under Subpart E of Part I, Subchapter J of Chapter 1 of the Internal
Revenue Code of 1986, as amended (the "Code"), the grantor of a trust
will be deemed to be the owner of the trust under certain circumstances,
and therefore taxable on his proportionate interest in the income
thereof. Where this Federal tax rule applies, the income attributed to
the grantor will also be income to him for New York income tax purposes.
See TSB-M-78(9)(c), New York Department of Taxation and Finance June 23,
1978.
By letter, dated today, Messrs. Chapman and Cutler, counsel for the
Depositor, rendered their opinion that each Unit holder of a Trust will
be considered as owning a share of each asset of that Trust in the
proportion that the number of Units held by such holder bears to the
total number of Units outstanding and the income of a Trust will be
treated as the income of each Unit holder of that Trust in said
proportion pursuant to Subpart E of Part E, subchapter J of Chapter 1 of
the Code.
Based on the foregoing and on the opinion of Messrs. Chapman and
Cutler, counsel for the Depositor, dated today, upon which we
specifically rely, we are of the opinion that under existing laws,
rulings and court decisions interpreting the laws of the State and City
of New York.
1. Each Trust will not constitute an association taxable as a
corporation under New York law and, accordingly, will not be subject to
tax on its income under the New York franchise tax or the New York City
general corporation tax.
2. The income of each of the Trusts will be treated as the income
of the Unit holders under the income tax laws of the State and City of
New York.
3. Unit holders who are not residents of the State of New York are
not subject to the income tax laws thereof with respect to any interest
or gain derived from the Fund or any gain from the sale or other
disposition of the Units, except to the extent that such interest or gain
is from property employed in a business, trade, profession or occupation
carried on in the State of New York.
In addition, we are of the that opinion no New York State stock
transfer tax will be payable in respect of any transfer of the
Certificates by reason of the exemption contained in paragraph (a) of
Subdivision 8 of Section 270 of the New York Tax Law.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement relating to the Units and to the use of our name
and the reference to our firm in the Registration Statement and in the
Prospectus.
Very truly yours,
Tanner Propp & Farber
MJK:cjw
Exhibit 3.4
Saul, Ewing, Remick & Saul
3800 Centre Square West
Philadelpia, PA 19102
May 24, 1995
Insured Municipals Income Trust and
Investors' Quality Tax-Exempt Trust
Multi-Series 252
Pennsylvania Insured Municipals
Income Trust, Series 202
c/o Chapman & Cutler
111 W. Monroe Street
Chicago, Illinois 60603
Attention: Mark J. Kneedy, Esquire
Re: Insured Municipals Income Trust and Investors' Quality
Tax-Exempt Trust, Multi-Series 252
Pennsylvania Insured Municipals Income Trust, Series 202
Gentlemen:
We are acting as special counsel with respect to Pennsylvania tax
matters for the Insured Municipals Income Trust and Investors' Quality
Tax-Exempt Trust, Multi-Series 252, Pennsylvania Insured Municipals
Income Trust, Series 202 (the "Fund") in connection with the issuance of
Units of fractional undivided interests in the Fund, under a Trust
Indenture and Agreement dated May 24, 1995 between Van Kampen American
Capital Distributors, Inc. ("Van Kampen") as Depositor, American
Portfolio Advisory Service, Inc., as Evaluator, and The Bank of New York
through its Wall Street Trust division, as Trustee. It is our
understanding that the Fund consists of a portfolio composed of interest-
bearing obligations issued by the Commonwealth of Pennsylvania or by
municipalities and other governmental authorities within the Commonwealth
of Pennsylvania (the "Bonds").
We have not examined any preliminary or final official statements of
issuers of the Bonds, nor have we examined any legal opinions, or
summaries of such opinions, relating to the validity of the Bonds in the
Fund, the exemption of interest thereon from federal income tax, the
exemption of the Bonds from personal property taxes in Pennsylvania, or
the exemption of the interest on and any gain from the sale of the Bonds
from the Pennsylvania personal income tax, given or to be given by bond
counsel to the issuer at the time such Bonds are issued. Further, we
have made no review of the proceedings relating to the issuance of the
Bonds or of the basis for such opinions. Our opinion expressed below is
based in part on the assurance of Van Kampen that the Bonds being
deposited in the Fund have been issued only by the Commonwealth of
Pennsylvania or by or on behalf of municipalities or other governmental
agencies within the Commonwealth of Pennsylvania.
We have examined certified copies, or copies otherwise identified to
our satisfaction, of such other documents as we have deemed necessary or
appropriate for the purpose of rendering this opinion, including those
related to previous transactions in which Van Kampen was the Depositor
which we have been assured by Van Kampen are substantially the same as
those relating to the Fund.
Based upon the foregoing, we are of the opinion that:
(1) Units evidencing fractional undivided interests in the
Fund, to the extent represented by obligations issued by the
Commonwealth of Pennsylvania, any public authority, commission,
board or other agency created by the Commonwealth of Pennsylvania,
any political subdivision of the Commonwealth of Pennsylvania or any
public authority created by any such political subdivision, are not
taxable under any of the personal property taxes presently in effect
in Pennsylvania;
(2) Distributions of interest income to Unitholders that would
not be taxable if received directly by a Pennsylvania resident are
not subject to personal income tax under the Pennsylvania Tax Reform
Code of 1971; nor will such interest be taxable under Philadelphia
School District Investment Income Tax imposed on Philadelphia
resident individuals;
(3) A Unitholder may have a taxable event under the
Pennsylvania state and local income tax referred to in the preceding
paragraph upon the redemption or sale of his Units but not upon the
disposition of any of the Bonds in the Fund to which the holder's
Units relate;
(4) Units are subject to Pennsylvania inheritance and estate
taxes;
(5) A Unitholder which is a corporation may have a taxable
event under the Pennsylvania Corporate Net Income Tax upon the
redemption or sale of its Units. Interest income distributed to
Unitholders which are corporations is not subject to Pennsylvania
Corporate Net Income Tax or Mutual Thrift Institutions Tax.
However, banks, title insurance companies and trust companies may be
required to take the value of Units into account in determining the
taxable value of their shares subject to Shares Tax;
(6) Under Act No. 68 of December 3, 1993, gains derived by the
Fund from the sale, exchange or other disposition of bonds may be
subject to Pennsylvania personal or corporate income taxes. Those
gains which are distributed by the Fund to the Unitholders who are
individuals may be subject to Pennsylvania Personal Income Tax. For
Unitholders which are corporations, the distributed gains may be
subject to Corporate Net Income Tax or Mutual Thrift Institutions
Tax. Gains which are not distributed by the Fund may nevertheless
be taxable to Unitholders if derived by the Fund from the sale,
exchange or other disposition of Bonds issued on or after February
1, 1994. Gains which are not distributed by the Fund will remain
nontaxable to Unitholders if derived by the Fund from the sale,
exchange or other disposition of Bonds issued prior to February 1,
1994;
(7) Any proceeds paid under insurance policies issued to the
Trustee or obtained by issuers or the underwriters of the bonds, the
Sponsor or others which represent interest on defaulted obligations
held by the Trustee will be excludable from Pennsylvania 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; and
(8) The Fund is not taxable as a corporation under
Pennsylvania tax laws applicable to corporations.
On December 3, 1993, changes to Pennsylvania law affecting taxation
of income and gains from the sale of Commonwealth of Pennsylvania and
local obligations were enacted. Among these changes was the repeal of
the exemption from tax of gains realized upon the sale or other
disposition of such obligations. The Pennsylvania Department of Revenue
has issued proposed regulations concerning these changes. The opinions
expressed above are based on our analysis of the law and proposed
regulations but are subject to modification upon review of final
regulations or other guidance that may be issued by the Department of
Revenue or future court decisions.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement (SEC No. 33-58953) relating to the Units referred
to above and to the use of our name and to the reference to our firm in
the said Registration Statement and in the related Prospectus.
Very truly yours,
Saul, Ewing, Remick & Saul
SERS:RTF/jsr
Exhibit 3.5
Hunton & Williams
One Hanover Square, Suite 1400
Fayetteville Street Mall
Raleigh, North Carolina 27601
May 23, 1995
The Bank of New York
through its Wall Street Trust Division
101 Barclay Street
New York, New York 10286
Re: Van Kampen American Capital Distritutors, Inc.
Insured Municipals Income Trust and
Investors' Quality Tax-Exempt Trust, Multi-Series 252,
North Carolina Investors' Quality Tax-Exempt Trust, Series 82
Gentlemen:
We are acting as special North Carolina counsel to the Insured
Municipals Income Trust and Investors' Quality Tax-Exempt Trust, Multi-
Series 252 (the "Fund") on North Carolina tax matters relating to North
Carolina Investors' Quality Tax-Exempt Trust, Series 82 (the "North
Carolina Trust") included as part of the Fund. Units of beneficial
interest in the North Carolina Trust (the "Units") are to be sold
pursuant to an effective registration statement on Form S-6 (Registration
No. 33-58953) under the Securities Act of 1933 (the "Registration
Statement"), filed by Van Kampen American Capital Distributors, Inc. (the
"Sponsor") on behalf of the Fund, covering the Units and other units of
the other trusts described in the Registration Statement. The number of
Units to be sold is stated in the Registration Statement.
The North Carolina Trust is to be established and the Units are to
be created pursuant to a Trust Agreement (the "Trust Agreement"), dated
the date hereof, among the Sponsor and The Bank of New York through its
Wall Street Trust division, as Trustee (the "Trustee"). The portfolio of
the North Carolina Trust will consist of bonds issued by the State of
North Carolina or municipalities, authorities or political subdivisions
thereof (the "Bonds").
We have examined originals, forms or certified copies, or copies
otherwise identified to our satisfaction, of the Trust Agreement, the
Registration Statement and such other documents as we have deemed
necessary for the purpose of this opinion. We have also relied upon the
form of opinion, to be dated the date hereof and addressed to the
Sponsor, of Chapman and Cutler, counsel to the Sponsor, with respect to
the matters of Federal income tax law set forth therein.
Based upon the foregoing, we are of the opinion that, insofar as the
law of the State of North Carolina is concerned, upon the establishing of
the North Carolina Trust and the issuance of the Units thereunder:
A. The North Carolina Trust is not an "association" taxable
as a corporation under North Carolina law with the result that
income of the North Carolina Trust will be deemed to be income of
the Unit holders.
B. Interest on the Bonds that is exempt from North Carolina
income tax when received by the North Carolina Trust will retain its
tax-exempt status when received by the Unit holders.
C. Unit holders will realize a taxable event when the North
Carolina Trust disposes of a Bond (whether by sale, exchange,
redemption or payment at maturity) or when a Unit holder redeems or
sells his Units (or any of them), and taxable gains for Federal
income tax purposes may result in gains taxable as ordinary income
for North Carolina income tax purposes. However, when a Bond has
been issued under an act of the North Carolina General Assembly that
provides that all income from such Bond, including any profit made
from the sale thereof, shall be free from all taxation by the State
of North Carolina, any such profit received by the North Carolina
Trust will retain its tax-exempt status in the hands of the Unit
holders.
D. Unit holders must amortize their proportionate shares of
any premium on a Bond. Amortization for each taxable year is
achieved by lowering the Unit holder's basis (as adjusted) in his
Units, with no deduction against gross income for the year.
E. The Units are exempt from the North Carolina tax on
intangible personal property so long as the corpus of the North
Carolina Trust remains composed entirely of Bonds or, pending
distribution, amounts received on the sale, redemption or maturity
of the Bonds and the Trustee periodically supplies to the North
Carolina Department of Revenue at such times as required by the
Department of Revenue a complete description of the North Carolina
Trust and also the name, description and value of the obligations
held in the corpus of the North Carolina Trust.
In rendering the foregoing opinion we have not passed on or
considered, among other things, the due authorization and delivery of the
Bonds or the North Carolina income tax or intangibles tax status of the
Bonds or income therefrom.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to this firm in the
Registration Statement under the headings "Tax Status Of The Trust Funds"
and "Legal Opinions."
Very truly yours,
Hunton & Williams
Exhibit 4.1
Interactive Data
14 Wall Street
New York, New York 10005
May 23, 1995
Van Kampen American Capital Distributors, Inc.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
Re: Insured Municipals Income Trust and Investors' Quality
Tax-Exempt Trust, Multi-Series 252 (A Unit Investment Trust)
Registered Under the Securities Act of 1933, File No. 33-58953
Gentlemen:
We have examined the Registration Statement for the above captioned
Fund, copy of which is attached hereto.
We hereby consent to the reference in the Prospectus and
Registration Statement for the above captioned Fund to Interactive Data
Services, Inc., as the Evaluator, and to the use of the Obligations
prepared by us which are referred to in such Prospectus and Statement.
You are authorized to file copies of this letter with the Securities
and Exchange Commission.
Very truly yours,
James Perry
Vice President
Exhibit 4.2
Standard & Poor's Corporation
25 Broadway
New York, New York 10004-1064
Mr. Mark Kneedy
Chapman and Cutler
111 West Monroe Street
Chicago, Illinois 60603
Re:Insured Municipals Income Trust and Investors' Quality
Tax-Exempt Trust, Multi-Series 252
Pursuant to your request for a Standard & Poor's rating on the units
of the above-captioned trust, SEC #33-58953, we have reviewed the
information presented to us and have assigned a 'AAA' rating to the units
of the trust and a 'AAA' rating to the securities contained in the trust
for as long as they remain in the trust. The ratings are direct
reflections, of the portfolio of the trust, which will be composed solely
of securities covered by bond insurance policies that insure against
default in the payment of principal and interest on the securities so
long as they remain in the trust. Since such policies have been issued
by one or more insurance companies which have been assigned a 'AAA'
claims paying ability rating by S&P, S&P has assigned a 'AAA' rating to
the units of the trust and to the securities contained in the trust for
as long as they remain in the trust.
You have permission to use the name of Standard & Poor's Corporation
and the above-assigned ratings in connection with your dissemination of
information relating to these units, provided that it is understood that
the ratings are not "market" ratings nor recommendations to buy, hold, or
sell the units of the trust or the securities contained in the trust.
Further, it should be understood the rating on the units does not take
into account the extent to which fund expenses or portfolio asset sales
for less than the fund's purchase price will reduce payment to the unit
holders of the interest and principal required to be paid on the
portfolio assets. S&P reserves the right to advise its own clients,
subscribers, and the public of the ratings. S&P relies on the sponsor
and its counsel, accountants, and other experts for the accuracy and
completeness of the information submitted in connection with the ratings.
S&P does not independently verify the truth or accuracy of any such
information.
This letter evidences our consent to the use of the name of Standard
& Poor's Corporation in connection with the rating assigned to the units
in the registration statement or prospectus relating to the units or the
trust. However, this letter should not be construed as a consent by us,
within the meaning of Section 7 of the Securities Act of 1933, to the use
of the name of Standard & Poor's Corporation in connection with the
ratings assigned to the securities contained in the trust. You are
hereby authorized to file a copy of this letter with the Securities and
Exchange Commission.
Please be certain to send us three copies of your final prospectus
as soon as it becomes available. Should we not receive them within a
reasonable time after the closing or should they not conform to the
representations made to us, we reserve the right to withdraw the rating.
We are pleased to have had the opportunity to be of service to you.
If we can be of further help, please do not hesitate to call upon us.
Sincerely,
Vincent S. Orgo
*Consisting of:
Insured Municipals Income Trust, Series 350
Arizona Insured Municipals Income Trust, Series 13
Minnesota Insured Municipals Income Trust, Series 56
Pennsylvania Insured Municipals Income Trust, Series 202
North Carolina Investors Quality Tax-Exempt Trust, Series 82
Exhibit 4.3
Independent Certified Public Accountants' Consent
We have issued our report dated May 24, 1995 on the statements of
condition and related bond portfolios of Insured Municipals Income Trust
and Investors' Quality Tax-Exempt Trust, Multi-Series 252 (IM-IT, Arizona
IM-IT, Minnesota IM-IT, Pennsylvania IM-IT and North Carolina Quality
Trusts) as of May 24, 1995 contained in the Registration Statement on
Form S-6 and in the Prospectus. We consent to the use of our report in
the Registration Statement and in the Prospectus and to the use of our
name as it appears under the caption "Other Matters-Independent Certified
Public Accountants."
Grant Thornton LLP
Chicago, Illinois
May 24, 1995
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This report reflects the current period taken from 487 on May 24, 1995 it is
unaudited
</LEGEND>
<SERIES>
<NUMBER> 350
<NAME> IM-IT
<CAPTION>
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-START> MAY-24-1995
<PERIOD-END> MAY-24-1995
<INVESTMENTS-AT-COST> 8625604
<INVESTMENTS-AT-VALUE> 8625604
<RECEIVABLES> 79829
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 8705433
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<NET-ASSETS> 8625604
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<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
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<SHARES-REINVESTED> 0
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<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
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<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
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<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This report reflects the current period taken from 487 on May 24, 1995 it is
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</LEGEND>
<SERIES>
<NUMBER> 13
<NAME> Arizona IM-IT
<CAPTION>
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-START> MAY-24-1995
<PERIOD-END> MAY-24-1995
<INVESTMENTS-AT-COST> 2911024
<INVESTMENTS-AT-VALUE> 2911024
<RECEIVABLES> 50454
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2961478
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 50454
<TOTAL-LIABILITIES> 50454
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2911024
<SHARES-COMMON-STOCK> 3061
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 2911024
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This report reflects the current period taken from 487 on May 24, 1995 it is
unaudited
</LEGEND>
<SERIES>
<NUMBER> 56
<NAME> Minnesota IM-IT
<CAPTION>
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-START> MAY-24-1995
<PERIOD-END> MAY-24-1995
<INVESTMENTS-AT-COST> 2884403
<INVESTMENTS-AT-VALUE> 2884403
<RECEIVABLES> 26332
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2910735
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 26332
<TOTAL-LIABILITIES> 26332
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2884403
<SHARES-COMMON-STOCK> 3033
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 2884403
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This report reflects the current period taken from 487 on May 24, 1995 it is
unaudited
</LEGEND>
<SERIES>
<NUMBER> 202
<NAME> Pennsylvania IM-IT
<CAPTION>
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-START> MAY-24-1995
<PERIOD-END> MAY-24-1995
<INVESTMENTS-AT-COST> 2967136
<INVESTMENTS-AT-VALUE> 2967136
<RECEIVABLES> 48422
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3015558
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 48422
<TOTAL-LIABILITIES> 48422
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2967136
<SHARES-COMMON-STOCK> 3120
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 2967136
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This report reflects the current period taken from 487 on May 24, 1995 it is
unaudited
</LEGEND>
<SERIES>
<NUMBER> 82
<NAME> North Carolina Quality
<CAPTION>
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-START> MAY-24-1995
<PERIOD-END> MAY-24-1995
<INVESTMENTS-AT-COST> 2869182
<INVESTMENTS-AT-VALUE> 2869182
<RECEIVABLES> 63929
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
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</TABLE>
