File No. 33-55873 CIK #910887
Securities and Exchange CommissionWashington, D. C. 20549
Post-Effective
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
Kemper Defined Funds Series 26
Name and executive office address of Depositor:
Kemper Unit Investment Trusts
(a service of Kemper Securities, Inc.)
77 West Wacker - 29th Floor
Chicago, Illinois 60601
Name and complete address of agent for service:
Robert K. Burke
77 West Wacker - 29th Floor
Chicago, Illinois 60601
( X ) Check box if it is proposed that this filing will
become effective at 2:00 p.m. on April 28, 1995
pursuant to paragraph (b) of Rule 485.
KEMPER INSURED CORPORATE TRUST
KEMPER DEFINED FUNDS INSURED CORPORATE SERIES
PART ONE
Kemper Insured Corporate Trust and Kemper Defined Funds
Insured Corporate Series (the "Trusts") was formed for the
purpose of providing a high level of current income through
investment in a fixed portfolio consisting primarily of corporate
debt obligations issued after July 18, 1994 by utility companies.
Certain Series also contain zero coupon U.S. Treasury
obligations.
Insurance guaranteeing the scheduled payment of principal
and interest on all of the Bonds (other than any U.S. Treasury
obligations) in the portfolio listed in Part Two has been
obtained directly by the issuer of such Bonds or by the Sponsor
of the Trusts from Municipal Bond Investors Assurance
Corporation. See "Insurance on the Portfolios" and "Portfolio"
appearing in Part Two for each Trust. This insurance is
effective so long as the Bonds are outstanding. As a result of
such insurance, the Bonds so insured in each Trust and the Units
of each Trust received on the original date of deposit a rating
of "Aaa" by Moody's Investors Service, Inc. All the Bonds in
each Trust have received a rating of "AAA" by Standard & Poor's
Rating Group ("Standard & Poor's") as of the original date of
deposit. The insurance does not relate to the Units of the
respective Trusts offered hereby or to their market value. See
"Insurance on the Portfolios." No representation is made as to
any insurer's ability to meet its commitments.
Units of the Trusts are not deposits or obligations of, or
guaranteed by, any bank, and Units are not federally insured or
otherwise protected by the Federal Deposit Insurance Corporation
and involve investment risk including loss of principal. The use
of the term "Insured" in the name of the Trust Funds does not
mean that the Units of the Trusts are insured by any governmental
or private organization. The Units are not insured.
For foreign investors who are not United States citizens or
residents, interest income from each Trust may not be subject to
federal withholding taxes if certain conditions are met. See
"Federal Tax Status."
This Prospectus is in two parts. Read and retain both parts for
future reference.
The date of this Part One is that date which is set forth in Part
Two of the Prospectus.
SPONSOR: KEMPER UNIT INVESTMENT TRUSTS,a service of Kemper
Securities, Inc.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COM-MISSION 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.
TABLE OF CONTENTS
<TABLE>
<S> <C>
SUMMARY 1
Public Offering Price 1
Interest and Principal Distributions 1
Reinvestment 1
Estimated Current Return and Estimated Long-Term Return
1
Market for Units 2
Risk Factors 2
THE TRUST 2
TRUST PORTFOLIOS 3
Portfolio Selection 3
Risk Factors 3
General Trust Information 7
INSURANCE ON THE PORTFOLIOS 7
RETIREMENT PLANS 9
Individual Retirement Account--IRA 9
Qualified Retirement Plans 10
Excess Distributions Tax 10
DISTRIBUTION REINVESTMENT 10
INTEREST, ESTIMATED LONG-TERM RETURN AND ESTIMATED CURRENT
RETURN 11
FEDERAL TAX STATUS 12
Limitations on Deductibility of Trust Expenses by
Unitholders 13
Acquisition Premium 13
Original Issue Discount 13
Market Discount 14
Computation of the Unitholder's Tax Basis 14
Recognition of Taxable Gain or Loss upon Disposition of
Obligations by a Trust or Disposition of Units 15
Foreign Investors 15
General 16
PUBLIC OFFERING OF UNITS 16
Public Offering Price 16
Accrued Interest 18
Purchased and Daily Accrued Interest 19
Public Distribution of Units 20
Profits of Sponsor 21
MARKET FOR UNITS 21
REDEMPTION 21
Computation of Redemption Price 23
UNITHOLDERS 23
Ownership of Units 23
Distributions to Unitholders 24
Statement to Unitholders 25
Rights of Unitholders 27
INVESTMENT SUPERVISION 27
ADMINISTRATION OF THE TRUST 28
The Trustee 28
The Evaluator 29
Amendment and Termination 29
Limitations on Liability 30
EXPENSES OF THE TRUST 30
THE SPONSOR 32
LEGAL OPINIONS 32
INDEPENDENT AUDITORS 32
Essential Information*
Report of Independent Auditors*
Statement of Assets and Liabilities*
Statement of Operations*
Statement of Changes in Net Assets*
Schedule of Investments*
Notes to Schedules of Investments*
Notes to Financial Statements*
*Information on these items appears in Part Two
</TABLE>
SUMMARY
Public Offering Price. The Public Offering Price per Unit
of a Series of the Trust is equal to a pro rata share of the
aggregate bid prices of the Bonds in such Series plus or minus a
pro rata share of cash, if any, in the Principal Account, held or
owned by the Series plus accrued interest or Purchased Interest
and Daily Accrued Interest, as applicable, plus a sales charge
shown under "Public Offering of Units." The sales charge is
reduced on a graduated scale as indicated under "Public Offering
of Units - Public Offering Price."
Interest and Principal Distributions. Distributions of the
estimated annual interest income to be received by a Series of
the Trust, after deduction of estimated expenses, will be made
monthly unless the Unitholder elects to receive such
distributions semi-annually (if available). Distributions will
be paid on the Distribution Dates to Unitholders of record of
such Series on the Record Dates set forth for the applicable
option. See "Essential Information" in Part Two. Unitholders of
Kemper Defined Funds Insured Corporate Series will receive
distributions monthly.
The distribution of funds, if any, in the Principal Account
of each Series, will be made as provided in
"Unitholders_Distributions to Unitholders."
Reinvestment. Each Unitholder may elect to have
distributions of principal or interest or both automatically
invested without charge in shares of certain Kemper mutual funds.
See "Distribution Reinvestment."
Estimated Current Return and Estimated Long-Term Return.
The Estimated Current Return is calculated by dividing the
estimated net annual interest income per Unit by the Public
Offering Price of such Trust. The estimated net annual interest
income per Unit will vary with changes in fees and expenses of
the Trustee, Sponsor and Evaluator and with the principal
prepayment, redemption, maturity, exchange or sale of Bonds while
the Public Offering Price will vary with changes in the bid price
of the underlying Bonds and with changes in accrued interest or
Purchased Interest and Daily Accrued Interest, as applicable;
therefore, there is no assurance that the present Estimated
Current Returns 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 Bonds in the
Trust and (2) takes into account the expenses and sales charge
associated with each Trust Unit. Since the market values and
estimated retirement dates of the Bonds and the expenses of the
Trust will change, there is no assurance that the present
Estimated Long-Term Return will be realized in the future.
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 Estimated Current Return calculations include only
net annual interest income and Public Offering Price.
Market for Units. While under no obligation to do so, the
Sponsor intends, subject to change at any time, to maintain a
market for the Units of each Series of the Trust and to
continuously offer to repurchase such Units at prices which are
based on the aggregate bid side evaluation of the Bonds in such
Series of the Trust plus accrued interest or Purchased Interest
and Daily Accrued Interest, as applicable.
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 general
economic conditions. See "Trust Portfolio_Risk Factors."
THE TRUST
Each Series of the Trust is one of a series of unit
investment trusts created by the Sponsor under the name Kemper
Insured Corporate Trust or Kemper Defined Funds Insured Corporate
Series, all of which are similar, and each of which was created
under the laws of the State of Missouri pursuant to a Trust
Agreement* (the "Trust Agreement"). Kemper Unit Investment
Trusts, a service of Kemper Securities, Inc., acts as Sponsor and
Investors Fiduciary Trust Company acts as Trustee.
The objective of each Trust is to provide a high level of
current income through investment in the Bonds. There is, of
course, no guarantee that a Trust's objectives will be achieved.
- ---------------------
* Reference is made to the Trust Agreement, and any
statements contained herein are qualified in their
entirety by the provisions of the Trust Agreement.
The Trusts may be appropriate investment vehicles for
investors who desire to participate in a portfolio of taxable
fixed income securities issued primarily by public utilities with
greater diversification than investors might be able to acquire
individually. Diversification of a Trust's assets will not
eliminate the risk of loss always inherent in the ownership of
securities. In addition, Bonds of the type deposited in the
Trusts often are not available in small amounts.
An investment in Units should be made with an understanding
of the risks which an investment in fixed rate debt obligations
may entail, including the risk that the value of the portfolio
and hence of the Units will decline with increases in interest
rates. The value of the underlying Bonds will fluctuate
inversely with changes in interest rates. The uncertain economic
conditions of recent years, together with the fiscal measures
adopted to attempt to deal with them, have resulted in wide
fluctuations in interest rates and, thus, in the value of fixed
rate debt obligations generally and intermediate and long-term
obligations in particular. The Sponsor cannot predict the degree
to which such fluctuations will continue in the future.
TRUST PORTFOLIOS
Portfolio Selection. The Bonds for each Trust was based
largely upon the experience and judgment of the Sponsor. In
making such selections the Sponsor considered the following
factors: (a) the price of the Bonds relative to other issues of
similar quality and maturity; (b) whether the Bonds were issued
by a utility company; (c) the diversification of the bonds as to
location of issuer; (d) the income to the Unitholders of the
Trusts; (e) whether the Bonds were insured or the availability
and cost of insurance for the scheduled payment of principal and
interest on the Bonds; (f) in certain Series whether the Bonds
were issued after July 18, 1984 (g) the stated maturity of the
bonds.
The Sponsor may not alter the portfolio of a Series of the
Trust, except upon the happening of certain extraordinary
circumstances. See "Investment Supervision." Certain Series of
the Trust contain Bonds which may be subject to optional call or
mandatory redemption pursuant to sinking fund provisions, in each
case prior to their stated maturity. A bond subject to optional
call is one which is subject to redemption or refunding prior to
maturity at the option of the issuer, often at a premium over
par. A refunding is a method by which a bond issue is redeemed,
at or before maturity, by the proceeds of a new bond issue. A
bond subject to sinking fund redemption is one which is subject
to partial call from time to time at par from a fund accumulated
for the scheduled retirement of a portion of an issue prior to
maturity. Special or extraordinary redemption provisions may
provide for redemption at par of all or a portion of an issue
upon the occurrence of certain circumstances, which may be prior
to the optional call dates shown in the "Schedules of Investments
of the Trust" in Part Two. Redemption pursuant to optional call
provisions is more likely to occur, and redemption pursuant to
special or extraordinary redemption provisions may occur, when
the Bonds have an offering side evaluation which represents a
premium over par, that is, when they are able to be refinanced at
a lower cost. The proceeds from any such call or redemption
pursuant to sinking fund provisions as well as proceeds from the
sale of Bonds and from Bonds which mature in accordance with
their terms, unless utilized to pay for Units tendered for
redemption, will be distributed to Unitholders and will not be
used to purchase additional Bonds for the Trust. Accordingly,
any such call, redemption, sale or maturity will reduce the size
and diversity of the Trust and the net annual interest income and
may reduce the Estimated Current Return and the Estimated
Long-Term Return. See "Interest, Estimated Long-Term Return and
Estimated Current Return." The call, redemption, sale or
maturity of Bonds also may have tax consequences to a Unitholder.
See "Federal Tax Status." Information with respect to the call
provisions and maturity dates of the Bonds is contained in
"Schedules of Investments."
Risk Factors. Public Utility Issues. Certain of the
aggregate principal amount of the Bonds in each Trust are
obligations of public utility issuers. In general, public
utilities are regulated monopolies engaged in the business of
supplying light, water, power, heat, transportation or means of
communication. Historically, the utilities industry has provided
investors in securities issued by companies in this industry with
high levels of reliability, stability and relative total return
on their investments. However, an investment in the Trusts 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.
Utilities are generally subject to extensive regulation by
state utility commissions which, for example, establish the rates
which may be charged and the appropriate rate of return on an
approved asset base, which must be approved by the state
commissions. Certain utilities have had difficulty from time to
time in persuading regulators, who are subject to political
pressures, to grant rate increases necessary to maintain an
adequate return on investment and voters in many states have the
ability to impose limits on rate adjustments (for example, by
initiative or referendum). Any unexpected limitations could
negatively affect the profitability of utilities whose budgets
are planned far in advance. Also, changes in certain accounting
standards currently under consideration by the Financial
Accounting Standards Board could cause significant write-downs of
assets and reductions in earnings for many investor-owned
utilities. In addition, gas pipeline and distribution companies
have had difficulties in adjusting to short and surplus energy
supplies, enforcing or being required to comply with long-term
contracts and avoiding litigation from their customers, on the
one hand, or suppliers, on the other.
Certain of the issuers of the Bonds in a Trust may own or
operate nuclear generating facilities. Governmental authorities
may from time to time review existing, and impose additional,
requirements governing the licensing, construction and operation
of nuclear power plants. Nuclear generating projects in the
electric utility industry have experienced substantial cost
increases, construction delays and licensing difficulties. These
have been caused by various factors, including inflation, high
financing costs, required design changes and rework, allegedly
faulty construction, objections by groups and governmental
officials, limits on the ability to finance, reduced forecasts of
energy requirements and economic conditions. This experience
indicates that the risk of significant cost increases, delays and
licensing difficulties remains present through completion and
achievement of commercial operation of any nuclear project.
Also, nuclear generating units in service have experienced
unplanned outages or extensions of scheduled outages due to
equipment problems or new regulatory requirements sometimes
followed by a significant delay in obtaining regulatory approval
to return to service. A major accident at a nuclear plant
anywhere, such as the accident at a plant in Chernobyl, U.S.S.R.,
could cause the imposition of limits or prohibitions on the
operation, construction or licensing of nuclear units in the
United States.
In view of the uncertainties discussed above, there can be
no assurance that any bond issuer's share of the full cost of
nuclear units under construction ultimately will be recovered in
rates or of the extent to which a bond issuer could earn an
adequate return on its investment in such units. The likelihood
of a significantly adverse event occurring in any of the areas of
concern described above varies, as does the potential severity of
any adverse impact. It should be recognized, however, that one
or more of such adverse events could occur and individually or
collectively could have a material adverse impact on the
financial condition or the results of operations or on a bond
issuer's ability to make interest and principal payments on its
outstanding debt.
Other general problems of the gas, water, telephone and
electric utility industry (including state and local joint action
power agencies) include difficulty in obtaining timely and
adequate rate increases, difficulty in financing large
construction programs to provide new or replacement facilities
during an inflationary period, rising costs of rail
transportation to transport fossil fuels, the uncertainty of
transmission service costs for both interstate and intrastate
transactions, changes in tax laws which adversely affect a
utility's ability to operate profitably, increased competition in
service costs, reductions in estimates of future demand for
electricity and gas in certain areas of the country, restrictions
on operations and increased cost and delays attributable to
environmental considerations, uncertain availability and
increased cost of capital, unavailability of fuel for electric
generation at reasonable prices, including the steady rise in
fuel costs and the costs associated with conversion to alternate
fuel sources such as coal, availability and cost of natural gas
for resale, technical and cost factors and other problems
associated with construction, licensing, regulation and operation
of nuclear facilities for electric generation, including among
other considerations the problems associated with the use of
radioactive materials and the disposal of radioactive wastes, and
the effects of energy conservation. Each of the problems referred
to could adversely affect the ability of the issuers of any
utility Bonds in a Trust to make payments due on these Bonds.
In addition, the ability of state and local joint action
power agencies to make payments on bonds they have issued is
dependent in large part on payments made to them pursuant to
power supply or similar agreements. Courts in Washington and
Idaho have held that certain agreements between Washington Public
Power Supply System ("WPPSS") and the WPPSS participants are
unenforceable because the participants did not have the authority
to enter into the agreements. While these decisions are not
specifically applicable to agreements entered into by public
entities in other states, they may cause a reexamination of the
legal structure and economic viability of certain projects
financed by joint action power agencies, which might exacerbate
some of the problems referred to above and possibly lead to legal
proceedings questioning the enforceability of agreements upon
which payment of these bonds may depend.
In 1984, AT&T divested its local telephone operations and
created seven new regional holding companies: American
Information Technologies Corporation (known as "Ameritech"), Bell
Atlantic Corporation, BellSouth Corporation, NYNEX Corporation,
Pacific Telesis Group, Southwestern Bell Corporation and US West,
Inc. (the "Regional Companies"). The spinoff was effected
pursuant to court approval to implement a consent decree relating
to antitrust proceedings brought by the U.S. Department of
Justice. In addition to providing for the division of assets,
work force and stock ownership of the entities that formerly
comprised the Bell System, the reorganization called for the
termination of many business arrangements that previously existed
among the various Bell System companies. In accordance with the
consent decree, the Regional Companies provide local exchange
telephone service, including exchange access for long distance
companies, and may provide directory advertising and new customer
equipment. All of the Regional Companies have been granted
waivers to engage in a broad range of businesses including
foreign consulting, selling real estate, servicing computers and
marketing or leasing office equipment. Guidelines established by
the District Court waiver to prevent unfair competition require
that the new ventures be independently capitalized, separate
subsidiaries that together account for less than 10% of the
Regional Company's net annual revenue. The Federal
Communications Commission ("FCC") has subsequently lifted the
structural separation restrictions on marketing customer premises
equipment, allowing these activities to be reintegrated into the
mainstream business operations. AT&T provides interexchange long
distance telephone service in competition with numerous other
suppliers, and certain other products and services, and is
responsible for certain customer equipment. Since 1984, the
impact of the reorganization on the financial condition of these
companies has not proved as severe as then expected, mainly due
to extensive cost cutting by the Regional Companies to offset the
loss of subsidies from AT&T. The Regional Companies continue to
be prohibited from providing information services, although they
are permitted to provide communications for these services. If
the modified final judgment is further modified to lift this
prohibition, the Regional Companies could have significant
opportunities for expansion of business, although there would
also be competitive risks to be assessed. Also, cellular service
is providing an increasing component of the net income of several
Regional Companies. A prohibition against AT&T rendering
information services expired in August 1989.
In addition to the specific circumstances affecting AT&T and
the regional holding companies, business conditions of the
telephone industry in general may affect the performance of the
Trust Fund. General problems of telephone companies include
regulation of rates for service by the FCC and various state or
other regulatory agencies. However, over the last several years
regulation has been changing, resulting in increased competition.
The new approach is more market oriented, more flexible and more
complicated. For example, Federal and certain state regulators
have instituted "price cap" regulation which couples protection
of rate payers for basic services with flexible pricing for
ancillary services. These new approaches to regulation could
lead to greater risks as well as greater rewards for operating
telephone companies such as those in the Trust Funds. Inflation
has substantially increased the operating expenses and costs of
plants required for growth, service, improvement and replacement
of existing plants. Continuing cost increases, to the extent not
offset by improved productivity and revenues from increased
business, would result in a decreasing rate of return and a
continuing need for rate increases. Although allowances are
generally made in rate-making proceedings for cost increases,
delays may be experienced in obtaining the necessary rate
increases and there can be no assurance that the regulatory
agencies will grant rate increases adequate to cover operating
and other expenses and debt service requirements. To meet
increasing competition, telephone companies will have to commit
substantial capital, technological and marketing resources.
Telephone usage, and therefore revenues, could also be adversely
affected by any sustained economic recession. New technology
such as cellular service and fiber optics, will require
additional capital outlays. The uncertain outcomes of future
labor agreements may also have a negative impact on the telephone
companies. Each of these problems could adversely affect the
ability of the telephone company issuers of any Bonds in a
portfolio to make payments of principal and interest on their
Bonds.
Zero Coupon U.S. Treasury Obligations. Certain of the
Bonds in certain of the Trusts are "zero coupon" U.S. Treasury
bonds. 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 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.
General Trust Information. Because certain of the Bonds in
each Trust 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 a 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 Bond.
The Trustee will have no power to vary the investment of a Trust;
i.e., the Trustee will have no managerial power to take advantage
of market variations to improve a Unitholder's investment.
To the best of the Sponsor's knowledge, there is no
litigation pending as of the date of this Part One Prospectus in
respect of any Bond which might reasonably be expected to have a
material adverse effect on the Trust Funds. At any time after the
date of this Part One Prospectus, litigation may be instituted on
a variety of grounds with respect to the Bonds. The Sponsor is
unable to predict whether any such litigation may be instituted,
or if instituted, whether such litigation might have a material
adverse effect on the Trust Funds. The Sponsor and the Trustee
shall not be liable in any way for any default, failure or defect
in any Bond.
INSURANCE ON THE PORTFOLIOS
All Bonds in each Series of the Trust, except for the U.S.
Treasury obligations, are insured as to the scheduled payment of
interest and principal, either by the Sponsor or by the Bond
issuer under a financial guaranty insurance policy obtained from
Municipal Bond Investors Assurance Corporation ("MBIA
Corporation"). See "Schedules of Investments" in Part Two. The
premium for each such insurance policy has been paid in advance
by such issuer or the Sponsor and each such policy is
non-cancelable and will remain in force so long as the Bonds are
outstanding and MBIA Corporation remains in business. No
premiums for such insurance are paid by the Trusts. If MBIA
Corporation is unable to meet its obligations under its policy or
if the rating assigned to the claims-paying ability of MBIA
Corporation deteriorates, no other insurer has any obligation to
insure any issue adversely affected by either of these events.
The aforementioned insurance guarantees the scheduled
payment of principal and interest on all of the Bonds in each
Trust, except for the U.S. Treasury obligations. It does not
guarantee the market value of the Bonds or the value of the Units
of a Series of the Trust. This insurance is effective so long as
the Bond is outstanding, whether or not held by a Trust.
Therefore, any such insurance may be considered to represent an
element of market value in regard to the Bonds, but the exact
effect, if any, of this insurance on such market value cannot be
predicted.
MBIA Corporation 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
Corporation. MBIA Corporation, which commenced municipal bond
insurance operations on January 5, 1987, is a limited liability
corporation rather than a several liability association. MBIA
Corporation is domiciled in the State of New York and licensed to
do business in all 50 states, the District of Columbia and the
Commonwealth of Puerto Rico.
As of September 30, 1994, MBIA Corporation had admitted
assets of $3.3 billion (unaudited), total liabilities of $2.2
billion (unaudited), and total policyholder's surplus of $1.1
billion (unaudited), prepared in accordance with statutory
accounting practices prescribed or permitted by insurance
regulatory authorities. Copies of MBIA Corporation's financial
statements prepared in accordance with statutory accounting
practices are available from MBIA Corporation. The address of
MBIA Corporation is 113 King Street, Armonk, New York 10504.
Effective December 31, 1989, MBIA, Inc. acquired Bond
Investors Group, Inc. On January 5, 1990, the Insurer acquired
all of the outstanding stock of Bond Investors Group, Inc., the
parent of BIG, now known as MBIA Insurance Corp. of Illinois.
Through a reinsurance agreement, BIG had ceded all of its net
insured risks, as well as its unearned premium and contingency
reserves, to the Insurer and the Insurer has reinsured BIG's net
outstanding exposure.
Moody's Investors Service rates all bonds issues insured by
MBIA "Aaa" and short-term loans "MIG1," both designated to be of
the highest quality. Standard & Poor's rates all new issues
insured by MBIA "AAA."
Because the Bonds in each Series of the Trust (other than
the U.S. Treasury obligations) are insured as to the scheduled
payment of principal and interest and on the basis of the
financial condition and the method of operation of MBIA
Corporation, Moody's Investors Service, Inc., on the original
Date of Deposit of each Series, assigned to each Trust's Units
its "AAA" investment rating. This is the highest rating assigned
to securities by such rating agency. These ratings 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 a Trust or the
Units thereof.
Bonds in a Trust for which insurance has been obtained by
the issuer thereof or by the Sponsor from MBIA Corporation (all
of which were rated "AAA") may or may not have a higher yield
than uninsured bonds rated "AAA" by Standard & Poor's. In
selecting Bonds for the portfolio of the Trusts, the Sponsor has
applied the criteria herein before described.
RETIREMENT PLANS
Units of the Trust Funds may be well suited for purchase by
Individual Retirement Accounts, Keogh Plans, pension funds and
other qualified retirement plans, certain of which are briefly
described below.
Generally, capital gains and income received under each of
the foregoing plans are deferred from federal taxation. All
distributions from such plans are generally treated as ordinary
income but may, in some cases, be eligible for special income
averaging or tax-deferred rollover treatment. Investors
considering participation in any such plan should review specific
tax laws related thereto and should consult their attorneys or
tax advisers with respect to the establishment and maintenance of
any such plan. Such plans are offered by brokerage firms and
other financial institutions. The Trust Funds will waive the
$1,000 minimum investment requirement for IRA accounts. The
minimum investment is $250 for tax-deferred plans such as IRA
accounts. Fees and charges with respect to such plans may vary.
Individual Retirement Account--IRA. Any individual under
age 70 1/2 may contribute the lesser of $2,000 or 100% of
compensation to an IRA annually. Such contributions are fully
deductible if the individual (and spouse if filing jointly) are
not covered by a retirement plan at work. The deductible amount
an individual may contribute to an IRA will be reduced $10 for
each $50 of adjusted gross income over $25,000 ($40,000 if
married, filing jointly or $0 if married, filing separately), if
either an individual or their spouse (if married, filing jointly)
is an active participant in an employer maintained retirement
plan. Thus, if an individual has adjusted gross income over
$35,000 ($50,000 if married, filing jointly or $0 if married,
filing separately) and if an individual or their spouse is an
active participant in an employer maintained retirement plan, no
IRA deduction is permitted. Under the Internal Revenue Code of
1986, as amended (the "Code"), an individual may make
nondeductible contributions to the extent deductible
contributions are not allowed. All distributions from an IRA
(other than the return of certain excess contributions) are
treated as ordinary income for federal income taxation purposes
provided that under the Code an individual need not pay tax on
the return of nondeductible contributions. The amount includable
in income for the taxable year is the portion of the amount
withdrawn for the taxable year as the individual's aggregate
deductible IRA contributions bear to the aggregate balance of all
IRAs of the individual.
A participant's interest in an IRA must be, or commence to
be, distributed to the participant not later than April 1 of the
calendar year following the year during which the participant
attains age 70 1/2. Distributions made before attainment of age
59 1/2, except in the case of the participant's death or
disability, or where the amount distributed is to be rolled over
to another IRA, or where the distributions are taken as a series
of substantially equal periodic payments over the participant's
life or life expectancy (or the joint lives or life expectancies
of the participant and the designated beneficiary) are generally
subject to a surtax in an amount equal to 10% of the
distribution. The amount of such periodic payments may not be
modified before the later of five years or attainment of age 59
1/2. Excess contributions are subject to an annual 6% excise
tax.
IRA applications, disclosure statements and trust agreements
are available from the Sponsor upon request.
Qualified Retirement Plans. Units of a Trust may be
purchased by qualified pension or profit sharing plans maintained
by corporations, partnerships or sole proprietors. The maximum
annual contribution for a participant in a money purchase pension
plan or to paired profit sharing and pension plans is the lessor
of 25% of compensation or $30,000. Prototype plan documents for
establishing qualified retirement plans are available from the
Sponsor upon request.
Excess Distributions Tax. In addition to the other taxes
due by reason of a plan distribution, a tax of 15% may apply to
certain aggregate distributions from IRAs, Keogh plans, and
corporate retirement plans to the extent such aggregate taxable
distributions exceed specified amounts (generally $150,000, as
adjusted) during a tax year. This 15% tax will not apply to
distributions on account of death, qualified domestic relations
orders or amounts eligible for tax-deferred rollover treatment.
In general, for lump sum distributions the excess distributions
over $750,000 (as adjusted) will be subject to the 15% tax.
The Trustee, Investors Fiduciary Trust Company, has agreed
to act as custodian for certain retirement plan accounts. An
annual fee of $12.00 per account, if not paid separately, will be
assessed by the Trustee and paid through the liquidation of
shares of the reinvestment account. An individual wishing the
Trustee to act as custodian must complete a Kemper UIT/IRA
application and forward it along with a check made payable to
Investors Fiduciary Trust Company. Certificates for Individual
Retirement Accounts cannot be issued.
DISTRIBUTION REINVESTMENT
Each Unitholder of a Trust may elect to have distributions
of principal (including capital gains, if any) or interest or
both automatically invested without charge in shares of any
open-end mutual fund registered in such Unitholder's state of
residence which is underwritten or advised by an affiliate of the
Sponsor, Kemper Financial Services, Inc. (the "Kemper Funds"),
other than those Kemper Funds sold with a contingent deferred
sales charge.
If individuals indicate they wish to participate in the
Reinvestment Program but do not designate a reinvestment fund,
the Program Agent referred to below will contact such individuals
to determine which reinvestment fund or funds they wish to elect.
Since the portfolio securities and investment objectives of such
Kemper Funds may differ significantly from that of the Trust
Funds, Unitholders should carefully consider the consequences
before selecting such Kemper Funds for reinvestment. Detailed
information with respect to the investment objectives and the
management of the Funds is contained in their respective
prospectuses, which can be obtained from any Trust Underwriter
upon request. An investor should read the prospectus of the
reinvestment fund selected prior to making the election to
reinvest. Unitholders who desire to have such distributions
automatically reinvested should inform their broker at the time
of purchase or should file with the Program Agent a written
notice of election.
Unitholders who are receiving distributions in cash may
elect to participate in distribution reinvestment by filing with
the Program Agent an election to have such distributions
reinvested without charge. Such election must be received by the
Program Agent at least ten days prior to the Record Date
applicable to any distribution in order to be in effect for such
Record Date. Any such election shall remain in effect until a
subsequent notice is received by the Program Agent. See
"Distributions to Unitholders."
The Program Agent is Investors Fiduciary Trust Company. All
inquiries concerning participation in distribution reinvestment
should be directed to the Program Agent at P.O. Box 419430,
Kansas City, Missouri 64173-0216, telephone (816) 474-8786.
INTEREST, ESTIMATED LONG-TERM RETURN AND ESTIMATED CURRENT RETURN
As of the opening of business on the date indicated therein,
the Estimated Long-Term Returns and the Estimated Current Returns
for each Series of the Trust were as set forth under "Essential
Information" for the applicable Trust in Part Two of this
Prospectus. 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,
the Sponsor and the Evaluator and with the principal prepayment,
redemption, maturity, exchange or sale of Bonds while the Public
Offering Price will vary with changes in the offering price of
the underlying Bonds and with changes in accrued interest or
Purchased Interest and Daily Accrued Interest, as applicable;
therefore, there is no assurance that the present Estimated
Current Returns will be realized in the future. 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 Bonds 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 Bonds and the expenses of the Trust
will change, there is no assurance that the present Estimated
Long-Term Returns will be realized in the future. Estimated
Current Returns and Estimated Long-Term Returns are expected to
differ because the calculation of Estimated Long-Term Returns
reflects the estimated date and amount of principal returned
while Estimated Current Returns calculations include only net
annual interest income and Public Offering Price.
FEDERAL TAX STATUS
In the opinion of Chapman and Cutler, counsel for the
Sponsor:
(1) Each Trust is not an association taxable as a
corporation for United States federal income tax purposes.
(2) Each Unitholder will be considered the owner of a pro
rata portion of each of the Trust assets for Federal income tax
purposes under Subpart E, Subchapter J of Chapter 1 of the
Internal Revenue Code (the "Code"). Each Unitholder will be
considered to have received his pro rata share of interest
derived from each Trust asset when such interest is received by
such Trust. Each Unitholder will also be required to include in
taxable income for federal income tax purposes, original issue
discount with respect to his interest in any Bonds held by a
Trust at the same time and in the same manner as though the
Unitholder were the direct owner of such interest.
(3) Each Unitholder will have a taxable event when a Bond
is disposed of (whether by sale, exchange, redemption, or payment
at maturity) or when the Unitholder redeems or sells his Units.
The cost of the Units to a Unitholder on the date such Units are
purchased is allocated among the Bonds held in a Trust (in
accordance with the proportion of the fair market values of such
Bonds) in order to determine his tax basis for his pro rata
portion in each Bond. Unitholders must reduce the tax basis of
their Units for their share of accrued interest received, if any,
on Bonds delivered after the date the Unitholders pay for their
Units 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, 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 his basis for his fractional interest in the
asset disposed of. The basis of each Unit and of each Bond which
was issued with original issue discount (including U.S. Treasury
obligations) must be increased by the amount of accrued original
issue discount and the basis of each Unit and of each Bond which
was purchased by a Trust at a premium must be reduced by the
annual amortization of bond premium which the Unitholder has
properly elected to amortize under Section 171 of the Code. 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 or less than his
original cost. Any U.S. Treasury obligations held by a Trust are
treated as bonds that were originally issued at an original issue
discount provided, pursuant to a Treasury Regulation (the
"Regulation") issued on December 28, 1992, that the amount of
original issue discount determined under Section 1286 of the Code
is not less than a "de minimis" amount as determined thereunder
(as discussed below under "Original Issue Discount"). Because
U.S. Treasury obligations represent interests in "stripped" U.S.
Treasury bonds, a Unitholder's initial cost for his pro rata
portion of each U.S. Treasury obligation held by a Trust
(determined at the time he acquires his Units, in the manner
described above) shall be treated as its "purchase price" by the
Unitholder. Original issue discount is effectively treated as
interest for federal income tax purposes, and the amount of
original issue discount in this case is generally the difference
between the Bond's purchase price and its stated redemption price
at maturity. A Unitholder will be required to include in gross
income for each taxable year the sum of his daily portions of
original issue discount attributable to the U.S. Treasury
obligations held by a Trust as such original issue discount
accrues and will, in general, be subject to Federal income tax
with respect to the total amount of such original issue discount
that accrues for such year even though the income is not
distributed to the Unitholders during such year to the extent it
is not less than a "de minimis" amount as determined under the
Regulation. To the extent the amount of such discount is less
than the respective "de minimis" amount, such discount shall be
treated as zero. To the extent the amount of such discount is
less than the respective "de minimis" amount, such discount shall
be treated as zero. In general, original issue discount accrues
daily under a constant interest rate method which takes into
account the semi-annual compounding of accrued interest. In the
case of U.S. Treasury obligations, this method will generally
result in an increasing amount of income to the Unitholders each
year. Unitholders should consult their tax advisers regarding the
federal income tax consequences and accretion of original issue
discount.
Limitations on Deductibility of Trust Expenses by
Unitholders. Each Unitholder's pro rata share of each expense
paid by a Trust is deductible by the Unitholder to the same
extent as though the expense had been paid directly by him,
subject to the following limitation. It should be noted that as
a result of the Tax Reform Act of 1986 (the "Act"), certain
miscellaneous itemized deductions, such as investment expenses,
tax return preparation fees and employee business expenses will
be deductible by an individual only to the extent they exceed 2%
of such individual's adjusted gross income. Temporary
regulations have been issued which require Unitholders to treat
certain expenses of a Trust as miscellaneous itemized deductions
subject to this limitation.
Acquisition Premium. If a Unitholder's tax basis of his
pro rata portion in any Bonds held by a Trust exceeds the amount
payable by the issuer of the Bond with respect to such pro rata
interest upon the maturity of the Bond, such excess would be
considered "acquisition premium" which may be amortized by the
Unitholder at the Unitholder's election as provided in Section
171 of the Code. Unitholders should consult their tax advisors
regarding whether such election should be made and the manner of
amortizing acquisition premium.
Original Issue Discount. Certain of the Bonds of a Trust
may have been acquired with "original issue discount." In the
case of any Bonds of a Trust acquired with "original issue
discount" that exceeds a "de minimis" amount as specified in the
Code or in the case of the U.S. Treasury obligations as specified
in the Regulation, such discount is includable in taxable income
of the Unitholders on an accrual basis computed daily, without
regard to when payments of interest on such Bonds are received.
The Code provides a complex set of rules regarding the accrual of
original issue discount. These rules provide that original issue
discount generally accrues on the basis of a constant compound
interest rate over the term of the Bonds. Unitholders should
consult their tax advisers as to the amount of original issue
discount which accrues.
Special original issue discount rules apply if the purchase
price of a Bond by a Trust exceeds its original issue price plus
the amount of original issue discount which would have previously
accrued based upon its issue price (its "adjusted issue price").
Similarly these special rules would apply to a Unitholder if the
tax basis of his pro rata portion of a Bond issued with original
issue discount exceeds his pro rata portion of its adjusted issue
price. Unitholders should also consult their tax advisers
regarding these special rules.
It is possible that a corporate Bond that has been issued at
an original issue discount may be characterized as a "high-yield
discount obligation" within the meaning of Section 163(e)(5) of
the Code. To the extent that such an obligation is issued at a
yield in excess of six percentage points over the applicable
Federal rate, a portion of the original issue discount on such
obligation will be characterized as a distribution on stock
(e.g., dividends) for purposes of the dividends received
deduction which is available to certain corporations with respect
to certain dividends received by such corporation.
Market Discount. If a Unitholder's tax basis in his pro
rata portion of Bonds is less than the allocable portion of such
Bond's stated redemption price at maturity (or, if issued with
original issue discount, the allocable portion of its "revised
issue price"), such difference will constitute market discount
unless the amount of market discount is "de minimis" as specified
in the Code. Market discount accrues daily computed on a
straight line basis, unless the Unitholder elects to calculate
accrued market discount under a constant yield method. The
market discount rules do not apply to the U.S. Treasury
obligations because they are stripped debt instruments subject to
special original issue discount rules as discussed above.
Unitholders should consult their tax advisers as to the amount of
market discount which accrues.
Accrued market discount is generally includable in taxable
income to the Unitholders as ordinary income for federal tax
purposes upon the receipt of serial principal payments on the
Bonds, on the sale, maturity or disposition of such Bonds by a
Trust, and on the sale by a Unitholder of Units, unless a
Unitholder elects to include the accrued market discount in
taxable income as such discount accrues. If a Unitholder does
not elect to annually include accrued market discount in taxable
income as it accrues, deductions for any interest expenses
incurred by the Unitholder which are incurred to purchase or
carry his Units will be reduced by such accrued market discount.
In general, the portion of any interest expense which was not
currently deductible would ultimately be deductible when the
accrued market discount is included in income. Unitholders
should consult their tax advisers regarding whether an election
should be made to include market discount in income as it accrues
and as to the amount of interest expense which may not be
currently deductible.
Computation of the Unitholder's Tax Basis. The tax basis
of a Unitholder with respect to his interest in a Bond is
increased by the amount of original issue discount (and market
discount, if the Unitholder elects to include market discount, if
any, on the Bonds held by a Trust in income as it accrues)
thereon properly included in the Unitholder's gross income as
determined for federal income tax purposes and reduced by the
amount of any amortized acquisition premium which the Unitholder
has properly elected to amortize under Section 171 of the Code.
A Unitholder's tax basis in his Units will equal his tax basis in
his pro rata portion of all of the assets of the Trust.
Recognition of Taxable Gain or Loss upon Disposition of
Obligations by a Trust or Disposition of Units;. A Unitholder
will recognize taxable capital gain (or loss) when all or part of
his pro rata interest in a Bond is disposed of in a taxable
transaction for an amount greater (or less) than his tax basis
therefor. Any gain recognized on a sale or exchange and not
constituting a realization of accrued "market discount," and any
loss will, under current law, generally be capital gain or loss
except in the case of a dealer or financial institution. As
previously discussed, gain realized on the disposition of the
interest of a Unitholder in any Bond deemed to have been acquired
with market discount will be treated as ordinary income to the
extent the gain does not exceed the amount of accrued market
discount not previously taken into income. Any capital gain or
loss arising from the disposition of a Bond by a Trust or the
disposition of Units by a Unitholder will be short-term capital
gain or loss unless the Unitholder has held his Units for more
than one year in which case such capital gain or loss will be
long-term. For taxpayers other than corporations, net capital
gains are subject to a maximum marginal stated tax rate of 28
percent. 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. The tax cost reduction requirements of the Code
relating to amortization of bond premium may under some
circumstances, result in the Unitholder realizing taxable gain
when his Units are sold or redeemed for an amount equal or less
than his original cost.
If the Unitholder disposes of a Unit, he is deemed thereby
to have disposed of his entire pro rata interest in all Trust
assets including his pro rata portion of all of the Bonds
represented by the Unit. This may result in a portion of the
gain, if any, on such sale being taxable as ordinary income under
the market discount rules (assuming no election was made by the
Unitholder to include market discount in income as it accrues) as
previously discussed.
"The Revenue Reconciliation Act of 1993" (the "Tax Act")
raised tax rates on ordinary income while capital gains remain
subject to a 28% maximum stated rate for taxpayers other than
corporations. Because some or all capital gains are taxed at a
comparatively lower rate under the Tax Act, the Tax Act includes
a provision that recharacterizes capital gains as ordinary income
in the case of certain financial transactions that are
"conversion transactions" effective for transactions entered into
after April 30, 1993. Unitholders and prospective investors
should consult with their tax advisers regarding the potential
effect of this provision on their investment in Units.
If a Unitholder disposes of a Unit, he is deemed thereby to
have disposed of his entire pro rata interest in all Trust assets
including his pro rata portion of all of the Bonds represented by
the Unit. This may result in a portion of the gain, if any, on
such sale being taxable as ordinary income under the market
discount rules (assuming no election was made by the Unitholder
to include market discount in income as it accrues) as previously
discussed.
Foreign Investors. In connection with certain Trusts (see
"Essential Information" in Part Two), a Unitholder of such
Trusts who is a foreign investor (i.e., an investor other than a
U.S. citizen or resident or a U.S. corporation, partnership,
estate or trust) will not be subject to United States federal
income taxes, including withholding taxes, on interest income on,
or any gain from the sale or other disposition of, his pro rata
interest in any Bond or the sale of his Units provided that all
of the following conditions are met: (i) the interest income or
gain is not effectively connected with the conduct by the foreign
investor of a trade or business within the United States, (ii)
either (a) the interest is not from sources within the United
States or (b) the interest is United States source income (which
is the case for most securities issued by United States issuers),
the Bond is issued after July 18, 1984 (which is the case for
each Bond held by such Series of the Trust), the foreign investor
does not own, directly or indirectly, 10% or more of the total
combined voting power of all classes of voting stock of the
issuer of the Bond and the foreign investor is not a controlled
foreign corporation related (within the meaning of Section
864(d)(4) of the Code) to the issuer of the Bond, (iii) with
respect to any gain, the foreign investor (if an individual) is
not present in the United States for 183 days or more during his
or her taxable year and (iv) the foreign investor provides all
certification which may be required of his status (foreign
investors may contact the Sponsor to obtain a Form W-8 which must
be filed with the Trustee and refiled every three calendar years
thereafter). Foreign investors should consult their tax advisers
with respect to United States tax consequences of ownership of
Units.
It should be noted that the Tax Act includes a provision
which would eliminate the exemption from United States taxation,
including withholding taxes, for certain "contingent interest."
The provision applies to interest received after December 31,
1993. No opinion is expressed herein regarding the potential
applicability of this provision and whether United States
taxation or withholding taxes could be imposed with respect to
income derived from the Units as a result thereof. Unit holders
and prospective investors should consult with their tax advisers
regarding the potential effect of this provision on their
investment in Units.
General. Each Unitholder (other than a foreign investor
who has properly provided the certifications described above)
will be requested to provide the Unitholder's taxpayer
identification number to the Trustee and to certify that the
Unitholder has not been notified that payments to the Unitholder
are subject to back-up withholding. If the proper taxpayer
identification number and appropriate certification are not
provided when requested, distributions by the Trust to such
Unit-holder will be subject to back-up withholding.
The foregoing discussion relates only to United States
federal income taxes; Unitholders may be subject to state and
local taxation in other jurisdictions (including a foreign
investor's country of residence). Unitholders should consult
their tax advisers regarding potential state, local or foreign
taxation with respect to the Units.
PUBLIC OFFERING OF UNITS
Public Offering Price. Units of each Series of the Trust
are offered at the Public Offering Price. The Public Offering
Price per Unit of a Series is equal to the aggregate bid side
evaluation of the Bonds in the Series' portfolio (as determined
pursuant to the terms of a contract with the Evaluator, Muller
Data Corporation, a non-affiliated firm regularly engaged in the
business of evaluating, quoting or appraising comparable
securities), plus or minus (a) cash, if any, in the Principal
Account, held or owed by the Series, (b) Purchased Interest (if
any) and (c) Daily Accrued Interest, divided by the number of
outstanding Units of that Series of the Trust, plus the sales
charge applicable. The sales charge is based upon the dollar
weighted average maturity of a Trust and is determined in
accordance with the table set forth below. For purposes of this
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 a
Trust based upon the dollar weighted average maturity of such
Trust's portfolio, in accordance with the following schedule:
<TABLE>
<CAPTION>
DOLLAR WEIGHTED AVERAGE PERCENT OF PUBLIC NET AMOUNT
YEARS TO MATURITY OFFERING PRICE
INVESTED
<S> <C> <C>
0 to .99 years 0.00% 0.000%
1 to 3.99 years 2.00 2.041
4 to 7.99 years 3.50 3.627
8 to 14.99 years 4.50 4.712
15 or more years 5.50 5.820
</TABLE>
The sales charge will be reduced as set forth in the table
below.
<TABLE>
<CAPTION>
DOLLAR WEIGHTED AVERAGE YEARS TO MATURITY*
4 to 7.99 8 to 14.99 15 or More
AMOUNT OF INVESTMENT Sales Charge (% of Public Offering Price)
<S> <C> <C> <C>
$1 to $99,999 3.50% 4.50% 5.50%
$100,000 to $499,999 3.25 4.25 5.00
$500,000 to $999,999 3.00 4.00 4.50
$1,000,000 or more 2.75 3.75 4.00
- -------------------------
</TABLE>
* If the dollar weighted average maturity of a Trust is from 1
to 3.99 years, the sales charge is 2% and 1.5% of the Public
Offering Price for purchases of $1 to $249,999 and $250,000 or
more, respectively.
The reduced sales charge as shown on the preceding charts
will apply to all purchases of Units on any one day by the same
purchaser from the same firm in the amounts stated herein, and
for this purpose, purchases of Units of a Series of the Trust
will be aggregated with concurrent purchases of Units of any
other unit investment trust that may be offered by the Sponsor.
Additionally, Units purchased in the name of a spouse or child
(under 21) of such purchaser will be deemed to be additional
purchases by such purchaser. The reduced sales charge will also
be applicable to a trust or other fiduciary purchasing for a
single trust estate or single fiduciary account.
The Sponsor intends to permit officers, directors and
employees of the sponsor and Evaluator and, at the discretion of
the Sponsor, registered representatives of selling firms to
purchase Units of the Trust without a sales charge, although a
transaction processing fee may be imposed on such trades.
The Public Offering Price on the date shown on the cover
page of Part Two of the Prospectus or on any subsequent date will
vary from the amounts stated under "Essential Information" in
Part Two due to fluctuations in the prices of the underlying
Bonds. The aggregate bid side evaluation of the Bonds shall be
determined (a) on the basis of current bid prices of the Bonds,
(b) if bid prices are not available for any particular Bond, on
the basis of current bid prices for comparable bonds, (c) by
determining the value of the Bonds on the bid side of the market
by appraisal, or (d) by any combination of the above. The value
of insurance obtained by an issuer of Bonds or by the Sponsor is
reflected and included in the market value of such Bonds.
The foregoing evaluations and computations shall be made as
of the Evaluation Time stated under "Essential Information" in
Part Two, on each business day effective for all sales made
during the preceding 24-hour period, and for purposes of resales
and repurchases of Units.
The interest on the Bonds in each Series of the Trust, less
the related estimated fees and expenses, is estimated to accrue
in the annual amounts per Unit set forth under "Essential
Information" in Part Two. The amount of net interest income
which accrues per Unit may change as Bonds mature or are
redeemed, exchanged or sold, or as the expenses of a Series of
the Trust change or as the number of outstanding Units of such
Series changes.
Payment for Units must be made on or before the fifth
business day following purchase. If a Unitholder desires to have
certificates representing Units purchased, such certificates will
be delivered as soon as possible following a written request
therefor. For information with respect to redemption of Units
purchased, but as to which certificates requested have not been
received, see "Redemption" below.
The following section entitled "Accrued Interest" applies
only to series of Kemper Insured Corporate Trust.
Accrued Interest. Accrued interest consists of two
elements. The first element arises as a result of accrued
interest which is the accumulation of unpaid interest on a bond
from the last day on which interest thereon was paid. Interest
on the Bonds is actually paid either monthly or semi-annually to
a Trust. However, interest on the Bonds is accounted for daily
on an accrual basis. Because of this, a Trust always has an
amount of interest earned but not yet collected by the Trustee
because of coupons that are not yet due. For this reason, the
Public Offering Price of Units of Kemper Insured Corporate Trusts
will have added to it the proportionate share of accrued and
undistributed interest to the date of settlement.
The Trustee advanced the amount of accrued interest on the
First Settlement Date (which is five business days following the
Date of Deposit of the applicable Trust) and the same was
distributed to the Sponsor. Such advance was repaid to the
Trustee through the first receipts of interest received on the
Bonds. Consequently, the amount of accrued interest added to the
Public Offering Price of Units of Kemper Insured Corporate Trusts
included only accrued interest arising after the First Settlement
Date of a Trust, less any distributions from the Interest Account
subsequent to this First Settlement Date. Since the First
Settlement Date was the date of settlement for anyone who ordered
Units on the Date of Deposit, no accrued interest was added to
the Public Offering Price of Units ordered on the Date of
Deposit.
The second element of accrued interest arises because of the
structure of the Interest Account. The Trustee has no cash for
distribution to Unitholders until it receives interest payments
on the Bonds in a Trust. The Trustee is obligated to provide its
own funds, at times, in order to advance interest distributions.
The Trustee will recover these advancements when such interest is
received. Interest Account balances are established so that it
will not be necessary on a regular basis for the Trustee to
advance its own funds in connection with such interest
distributions. The Interest Account balances are also structured
so that there will generally be positive cash balances and since
the funds held by the Trustee will be used by it to earn interest
thereon, it benefits thereby (see "Expenses of the Trust").
Accrued interest is computed as of the initial record date
of the Trusts. On the date of the first distribution of interest
to Unitholders after the First Settlement Date, the interest
collected by the Trustee will be sufficient to repay its
advances, to allow for accrued interest under the monthly,
quarterly and semi-annual plans of distribution and to generate
enough cash to commence distributions to Unitholders. If a
Unitholder sells or redeems all or a portion of his Units or if
the Bonds in a Trust are sold or otherwise removed or if a Trust
is liquidated, he will receive at that time his proportionate
share of the accrued interest computed to the settlement date in
the case of sale or liquidation and to the date of tender in the
case of redemption of such Trust.
The following section entitled "Purchased and Daily Accrued
Interest" applies only to series of Kemper Defined Funds Insured
Corporate Series.
Purchased and Daily Accrued Interest. Accrued interest
consists of two elements. The first element arises as a result
of accrued interest which is the accumulation of unpaid interest
on a bond from the later of the last day on which interest
thereon was paid or the date of original issuance of the bond.
Interest on the coupon Bonds in a Trust Fund is paid
semi-annually to the Trust. A portion of the aggregate amount of
such accrued interest on the Bonds in a Trust to the First
Settlement Date of the Trust is referred to herein as "Purchased
Interest." Included in the Public Offering Price of the Trust
Units of the Kemper Defined Funds Insured Corporate Series is the
Purchased Interest. In an effort to reduce the amount of
Purchased Interest which would otherwise have to be paid by
Unitholders, the Trustee may advance a portion of the accrued
interest to the Sponsor as the unitholder of record as of the
First Settlement Date. The second element of accrued interest
arises because the estimated net interest on the Units in the
Trust Fund is accounted for daily on an accrual basis (herein
referred to as "Daily Accrued Interest"). Because of this, the
Units always have an amount of interest earned but not yet paid
or reserved for payment. For this reason, the Public Offering
Price of Units will include the proportionate share of Daily
Accrued Interest to the date of settlement.
If a unitholder sells or redeems all or a portion of his
Units or if the Bonds are sold or otherwise removed or if a Trust
Fund is liquidated, he will receive at that time his
proportionate share of the Purchased Interest (if any) and Daily
Accrued Interest computed to the settlement date in the case of
sale or liquidation and to the date of tender in the case of
redemption in a Trust Fund.
Public Distribution of Units. The Sponsor has qualified
Units for sale in a number of states. Units will be sold through
dealers who are members of the National Association of Securities
Dealers, Inc. and through others. Sales may be made to or
through dealers at prices which represent discounts from the
Public Offering Price as set forth in the table below. Certain
commercial banks are making Units of the Trusts available to
their customers on an agency basis. A portion of the sales
charge paid by their customers is retained by or remitted to the
banks in the amounts shown in the table below. Under the
Glass-Steagall Act, banks are prohibited from underwriting Trust
Units; however, the Glass-Steagall Act does permit certain agency
transactions and the banking regulators have indicated that these
particular agency transactions are 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.
<TABLE>
<CAPTION>
DOLLAR WEIGHTED AVERAGE YEARS TO MATURITY*
4 to 7.99 8 to 14.99 15 or More
AMOUNT OF INVESTMENT Discount per Unit (% of Public Offering Price)
<S> <C> <C> <C>
$1,000 to $99,999 2.00% 3.00% 4.00%
$100,000 to $499,999 1.75 2.75 3.50
$500,000 to $999,999 1.50 2.50 3.00
$1,000,000 or more 1.25 2.25 2.50
- -----------------------
</TABLE>
* If the dollar weighted average maturity of a Trust is from 1
to 3.99 years, the concession or agency commission is 1.00% of
the Public Offering Price.
In addition to such discounts, the Sponsor may, from time to
time, pay or allow an additional discount, in the form of cash or
other compensation, to dealers employing registered
representatives who sell, during a specified time period, a
minimum dollar amount of Units of the Trust and other unit
investment trusts underwritten by the Sponsor.
The Sponsor reserves the right to change the levels of
discounts at any time. The difference between the discount and
the sales charge will be retained by the Sponsor.
The Sponsor reserves the right to reject, in whole or in
part, any order for the purchase of Units.
Profits of Sponsor. The Sponsor will retain a portion of
the sales charge on each Unit sold, representing the difference
between the Public Offering Price of the Units and the discounts
allowed to firms selling such Units. The Sponsor may realize
additional profit or loss as a result of the possible change in
the daily evaluation of the Bonds in a Trust, since the value of
its inventory of Units may increase or decrease.
MARKET FOR UNITS
While not obligated to do so, the Sponsor intends to,
subject to change at any time, maintain a market for Units of
each Series of the Trust offered hereby and to continuously offer
to purchase said Units at prices, as determined by the Evaluator,
based on the aggregate bid prices of the underlying Bonds of such
Series, together with Purchased Interest (if any) and Daily
Accrued Interest to the expected date of settlement.
Accordingly, Unitholders who wish to dispose of their Units
should inquire of their broker or bank as to the current market
price of the Units prior to making a tender for redemption to the
Trustee.
REDEMPTION
If more favorable terms do not exist in the over-the-counter
market described above, Unitholders of a Series of the Trust may
cause their Units to be redeemed by the Trustee by making a
written request to the Trustee, Investors Fiduciary Trust
Company, P.O. Box 419430, Kansas City, Missouri 64173-0216 and,
in the case of Units evidenced by a certificate, by tendering
such certificate to the Trustee, properly endorsed or accompanied
by a written instrument or instruments of transfer in form
satisfactory to the Trustee. Unitholders must sign such written
request, and such certificate or transfer instrument, exactly as
their names appear on the records of the Trustee and on any
certificate representing the Units to be redeemed. If the amount
of the redemption is $25,000 or less and the proceeds are payable
to the Unitholder(s) of record at the address of record, no
signature guarantee is necessary for redemptions by individual
account owners (including joint owners). Additional
documentation may be requested, and a signature guarantee is
always required, from corporations, executors, administrators,
trustees, guardians or associations. The signatures must be
guaranteed by a participant in the Securities Transfer Agents
Medallion Program ("STAMP") or such other signature program in
addition to, or in substitution for, STAMP, as may be accepted by
the Trustee. A certificate should only be sent by registered or
certified mail for the protection of the Unitholder. Since
tender of the certificate is required for redemption when one has
been issued, Units represented by a certificate cannot be
redeemed until the certificate representing such Units has been
received by the purchaser.
Redemption shall be made by the Trustee on the seventh
calendar day following the day on which a tender for redemption
is received, or if the seventh calendar day is not a business
day, on the first business day prior thereto (the "Redemption
Date"), by payment of cash equivalent to the Redemption Price for
that Series of the Trust, determined as set forth below under
"Computation of Redemption Price," as of the Evaluation Time
stated under "Essential Information" in Part Two, next following
such tender, multiplied by the number of Units being redeemed.
The price received upon redemption might be more or less than the
amount paid by the Unitholder depending on the value of the Bonds
in the portfolio at the time of redemption.
Under regulations issued by the Internal Revenue Service,
the Trustee is required to withhold a certain 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 tax return. Under
normal circumstances the Trustee obtains the Unitholder's tax
identification number from the selling broker. However, any time
a Unitholder elects to tender Units for redemption, such
Unitholder should make sure that the Trustee has been provided a
certified tax identification number in order to avoid this
possible "back-up withholding." In the event the Trustee has not
been previously provided such number, one must be provided at the
time redemption is requested.
Any amounts paid on redemption representing interest shall
be withdrawn from the Interest Account of such Series to the
extent that funds are available for such purpose. All other
amounts paid on redemption shall be withdrawn from the Principal
Account of such Series. The Trustee is empowered to sell Bonds
from the portfolio of a Series in order to make funds available
for the redemption of Units of such Series. Such sale may be
required when Bonds would not otherwise be sold and might result
in lower prices than might otherwise be realized. To the extent
Bonds are sold, the size and diversity of that Series of the
Trust will be reduced.
The Trustee is irrevocably authorized in its discretion, if
the Sponsor does not elect to purchase any Units tendered for
redemption, in lieu of redeeming such Units, to sell such Units
in the over-the-counter market for the account of tendering
Unitholders at prices which will return to such Unitholders
amounts in cash, net after brokerage commissions, transfer taxes
and other charges, equal to or in excess of the Redemption Price
for such Units. In the event of any such sale, the Trustee shall
pay the net proceeds thereof to the Unitholders on the day they
would otherwise be entitled to receive payment of the Redemption
Price.
The right of redemption may be suspended and payment
postponed (1) for any period during which the New York Stock
Exchange is closed, other than customary weekend and holiday
closings, or during which (as determined by the Securities and
Exchange Commission) trading on the New York Stock Exchange is
restricted; (2) for any period during which an emergency exists
as a result of which disposal by the Trustee of Bonds is not
reasonably practicable or it is not reasonably practicable fairly
to determine the value of the underlying Bonds in accordance with
the Trust Agreement; or (3) for such other period as the
Securities and Exchange Commission may by order permit. The
Trustee is not liable to any person in any way for any loss or
damage which may result from any such suspension or postponement.
Computation of Redemption Price. The Redemption Price for
Units of each Series of the Trust is computed by the Evaluator as
of the Evaluation Time stated under "Essential Information" in
Part Two next occurring after the tendering of a Unit for
redemption and on any other business day desired by it, by
A. adding (1) the cash on hand in such Series of the
Trust; (2) the aggregate value of the Bonds held in such
Series of the Trust, as determined by the Evaluator on the
basis of bid prices therefor; and (3) accrued interest or
Purchased Interest and Daily Accrued Interest (as
applicable) on the Bonds in that Series of the Trust as of
the date of computation;
B. deducting therefrom (1) amounts representing any
applicable taxes or governmental charges payable out of that
Series of the Trust and for which no deductions have been
previously made for the purpose of additions to the Reserve
Account described under "Expenses of the Trust"; (2) amounts
representing estimated accrued expenses of that Series of
the Trust including, but not limited to, fees and expenses
of the Trustee (including legal and auditing fees), the
Evaluator, the Sponsor and bond counsel, if any; (3) cash
held for distribution to Unitholders of record as of the
business day prior to the evaluation being made; and (4)
other liabilities incurred by such Series of the Trust; and
C. finally, dividing the results of such computation
by the number of Units of such Series of the Trust
outstanding as of the date thereof.
UNITHOLDERS
Ownership of Units. Ownership of Units of the Trust will
not be evidenced by a certificate unless a Unitholder or the
Unitholder's registered broker/dealer makes a written request to
the Trustee.
Units are transferable by making a written request to the
Trustee and, in the case of Units evidenced by a certificate,
presenting and surrendering such certificate to the Trustee
properly endorsed or accompanied by a written instrument or
instruments of transfer which should be sent by registered or
certified mail for the protection of the Unitholder.
Unitholders must sign such written request, and such certificate
or transfer instrument (if applicable), exactly as their names
appear on the records of the Trustee and on any certificate
representing the Units to be transferred. Such signatures must
be guaranteed by a participant in the Securities Transfer Agents
Medallion Program ("STAMP") or such other signature program in
addition to, or in substitution for, STAMP, as may be accepted by
the Trustee.
Units may be purchased and certificates, if requested, will
be issued in denominations of one Unit or any whole unit multiple
thereof subject to any minimum investment requirement established
by the Sponsor from time to time. However, in connection with
qualified plans in which Investors Fiduciary Trust Company acts
as Trustee, fractional units (to three decimal places) will be
permitted. Any certificate issued will be numbered serially for
identification, issued in fully registered form and will be
transferable only on the books of the Trustee. The Trustee may
require a Unitholder to pay a reasonable fee to be determined in
the sole discretion of the Trustee, for each certificate
re-issued or transferred, and to pay any governmental charge that
may be imposed in connection with each such transfer or
interchange. The Trustee at the present time does not intend to
charge for the normal transfer or interchange of certificates.
Destroyed, stolen, mutilated or lost certificates will be
replaced upon delivery to the Trustee of satisfactory indemnity
(generally amounting to not more than 3% of the market value of
the Units), affidavit of loss, evidence of ownership and payment
of expenses incurred.
Distributions to Unitholders. Interest Distributions.
Interest received by a Series of the Trust, including any portion
of the proceeds from a disposition of Bonds which represents
accrued interest, is credited by the Trustee to the Interest
Account for such Series. All other receipts are credited by the
Trustee to a separate Principal Account for such Series. During
each year the distributions to the Unitholders of each Series of
the Trust as of each Record Date (see "Essential Information" in
Part Two) will be made on the following Distribution Date or
shortly thereafter and shall consist of an amount substantially
equal to one-twelfth or one-half (depending on the distribution
option selected) of such holders' pro rata share of the net
estimated net annual interest income to the Interest Account for
such Series of the Trust, after deducting estimated expenses.
Persons who purchase Units of the Trust between a Record
Date and a Distribution Date will receive their first
distribution on the second Distribution Date following their
purchase of Units. All distributions of principal and interest
will be paid in cash unless a Unitholder has elected to reinvest
principal and/or interest payments in shares of one of the
reinvestment funds. See "Distribution Reinvestment." Interest
distributions per Unit for each Series will be in the amounts
shown under "Essential Information" in the applicable Part Two
and may change as underlying Municipal Bonds are redeemed, paid
or sold, or as expenses of such Series of the Trust change or the
number of outstanding Units of such Series of the Trust changes.
Since interest on Bonds in each Series of the Trust is
payable at varying intervals, usually in semiannual installments,
and distributions of income are made to Unitholders of a Series
of the Trust at what may be different intervals from receipt of
interest, the interest accruing to such Series of the Trust may
not be equal to the amount of money received and available for
distribution from the Interest Account of such Series.
Therefore, on each Distribution Date the amount of interest
actually on deposit in the Interest Account and available for
distribution may be slightly more or less than the interest
distribution made. In order to eliminate fluctuations in
interest distributions resulting from such variances, the Trustee
is authorized by the Trust Agreement to advance such amounts as
may be necessary to provide interest distributions of
approximately equal amounts. The Trustee will be reimbursed,
without interest, for any such advances from funds available in
the Interest Account of such Series.
Because the interest to which Unitholders of a Series of the
Trust are entitled will at most times exceed the amount available
for distribution, there will almost always remain an item of
accrued interest that is added to the daily value of the Units of
such Series. If Unitholders of a Series sell or redeem all or a
portion of their Units they will be paid their proportionate
share of the accrued interest of such Series to, but not
including, the fifth business day after the date of a sale or to
the date of tender in the case of a redemption.
Unitholders purchasing Units will initially receive
distributions in accordance with the election of the prior owner.
Unitholders desiring to change their distribution option may do
so by sending written notice to the Trustee, together with their
certificate (if one was issued). Certificates should only be
sent by registered or certified mail to minimize the possibility
of loss. If written notice and any certificate are received by
the Trustee not later than January 1 or July 1 of a year, the
change will become effective on January 2 for distributions
commencing with February 15 or August 15, respectively, of that
year. If notice is not received by the Trustee, the Unitholder
will be deemed to have elected to continue with the same option
for the subsequent twelve months.
Principal Distributions. In addition, the Trustee will
distribute on each Distribution Date or shortly thereafter, to
each Unitholder of record on the preceding Record Date, an amount
substantially equal to such holders' pro rata share of the cash
balance, if any, in the Principal Account of such Series computed
as of the close of business on the preceding Record Date.
However, no distribution will be required if the balance in the
Principal Account of such Series is less than $1.00 per Unit.
Statement to Unitholders. With each distribution, the
Trustee will furnish or cause to be furnished to each Unitholder
a statement of the amount of interest and the amount of other
receipts, if any, which are being distributed, expressed in each
case as a dollar amount per Unit.
The accounts of each Series of the Trust are required to be
audited, at the Series' expense, annually by independent auditors
designated by the Sponsor, unless the Trustee determines that
such an audit would not be in the best interest of the
Unitholders of such Series of the Trust. The accountants' report
will be furnished by the Trustee to any Unitholder of such Series
of the Trust upon written 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 Unitholder of a Series of
the Trust a statement covering the calendar year, setting forth:
A. As to the Interest Account:
1. The amount of interest received on the Bonds
in such Series including amounts received as a portion
of the proceeds of any disposition of the Bonds;
2. The amount paid from the Interest Account of
such Series representing accrued interest of any Units
redeemed;
3. The deductions from the Interest Account of
such Series for applicable taxes, if any, fees and
expenses (including auditing fees) of the Trustee, the
Evaluator, the Sponsor and bond counsel, if any;
4. Any amounts credited by the Trustee to a
Reserve Account for such Series described under
"Expenses of the Trust"; and
5. The net amount remaining after such payments
and deductions, expressed both as a total dollar amount
and a dollar amount per Unit outstanding on the last
business day of such calendar year.
B. As to the Principal Account:
1. The dates of the maturity, liquidation or
redemption of any of the Bonds in such Series and the
net proceeds received therefrom excluding any portion
credited to the Interest Account;
2. The amount paid from the Principal Account of
such Series representing the principal of any Units
redeemed;
3. The deductions from the Principal Account of
such Series for payment of applicable taxes, if any,
fees and expenses (including auditing expenses) of the
Trustee, the Evaluator, the Sponsor and of bond
counsel, if any;
4. Any amounts credited by the Trustee to a
Reserve Account for such Series described under
"Expenses of the Trust"; and
5. The net amount remaining after distributions
of principal and deductions, expressed both as a dollar
amount and as a dollar amount per Unit outstanding on
the last business day of such calendar year.
C. The following information:
1. A list of the Bonds in such Series as of the
last business day of such calendar year;
2. The number of Units of such
Series
outstanding on the last business day of such calendar
year;
3. The Redemption Price of such Series based on
the last Trust Evaluation made during such calendar
year;
4. The amount actually distributed during such
calendar year from the Interest and Principal Accounts
of such Series separately stated, expressed both as
total dollar amounts and as dollar amounts per Unit of
such Series outstanding on the Record Date for each
such distribution.
Rights of Unitholders. A Unitholder may at any time tender
Units to the Trustee for redemption. No Unitholder of a Series
shall have the right to control the operation and management of
such Series or of the Trust in any manner, except to vote with
respect to amendment of the Trust Agreement or termination of
such Series of the Trust. The death or incapacity of any
Unitholder will not operate to terminate the Series or the Trust
nor entitle legal representatives or heirs to claim an accounting
or to bring any action or proceeding in any court for partition
or winding up of such Series or the Trust.
INVESTMENT SUPERVISION
The Sponsor may not alter the portfolio of the Trust by the
purchase, sale or substitution of Bonds, except in the special
circumstances noted below. Thus, with the exception of the
redemption or maturity of Bonds in accordance with their terms,
and/or the sale of Bonds to meet redemption requests, the assets
of the Trust will remain unchanged under normal circumstances.
The Sponsor may direct the Trustee to dispose of Bonds the
value of which has been affected by certain adverse events,
including institution of certain legal proceedings, a decline in
their price or the occurrence of other market factors, including
advance refunding, so that in the opinion of the Sponsor the
retention of such Bonds in a Series of the Trust would be
detrimental to the interest of the Unitholders of such Series.
The proceeds from any such sales, exclusive of any portion which
represents accrued interest, will be credited to the Principal
Account for distribution to the Unitholders.
The Sponsor is required to instruct the Trustee to reject
any offer made by an issuer of the Bonds to issue new obligations
in exchange or substitution for any of such Bonds 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 Bonds
or (2) in the written opinion of the Sponsor the issuer will
probably default with respect to such Bonds 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 Bonds
originally deposited thereunder. Within five days after the
deposit of obligations in exchange or substitution for underlying
Bonds, the Trustee is required to give notice thereof to each
Unitholder, identifying the Bonds eliminated and the Bonds
substituted therefor.
The Trustee may sell Bonds designated by the Sponsor from a
Series of the Trust for the purpose of redeeming Units of such
Series tendered for redemption and the payment of expenses.
ADMINISTRATION OF THE TRUST
The Trustee. The Trustee, Investors Fiduciary Trust
Company, is a trust company specializing in investment related
services, organized and existing under the laws of Missouri,
having its trust office at 127 West 10th Street, Kansas City,
Missouri 64105. The Trustee is subject to supervision and
examination by the Division of Finance of the State of Missouri
and the Federal Deposit Insurance Corporation. Investors
Fiduciary Trust Company is owned by State Street Boston
Corporation.
The Trustee, whose duties are ministerial in nature, has not
participated in selecting the portfolio of any Series of the
Trust. For information relating to the responsibilities of the
Trustee under the Trust Agreements, reference is made to the
material set forth under "Unitholders."
In accordance with the Trust Agreements, the Trustee shall
keep proper records of all transactions at its office. Such
records shall include the name and address of, and the number of
Units held by, every Unitholder of each Series. The books and
records with respect to a Series of the Trust shall be open to
inspection by any Unitholder of such Series 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. The Trustee shall keep a certified copy or duplicate
original of the Trust Agreements on file in its office available
for inspection at all reasonable times during usual business
hours by any Unitholder, together with a current list of the
Bonds held in each Series of the Trust. Pursuant to the Trust
Agreements, the Trustee may employ one or more agents for the
purpose of custody and safeguarding of Bonds comprising each
Trust Fund.
Under the Trust Agreements, the Trustee or any successor
trustee may resign and be discharged of the trust created by the
Trust Agreements 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 Unitholders then of record, not less
than sixty 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 thirty days after notification, the retiring Trustee may
apply to a court of competent jurisdiction for the appointment of
a successor. The Sponsor may at any time remove the Trustee with
or without cause and appoint a successor trustee as provided in
the Trusts Agreements. 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 a
successor trustee, all the rights, powers, duties and obligations
of the original Trustee shall vest in the successor.
The Trustee shall be a corporation organized under the laws
of the United States or any state thereof, which is authorized
under such laws to exercise trust powers. The Trustee shall have
at all times an aggregate capital, surplus and undivided profits
of not less than $5,000,000.
The Evaluator. Kemper Unit Investment Trusts, a service of
Kemper Securities, Inc., the Sponsor, also serves as Evaluator.
The Evaluator may resign or be removed by the Trustee, in which
event the Trustee is to use its best efforts to appoint a
satisfactory successor. Such resignation or removal shall become
effective upon acceptance of appointment by the successor
evaluator. If, upon resignation of the Evaluator, no successor
has accepted appointment within thirty days after notice of
resignation, the Evaluator may apply to a court of competent
jurisdiction for the appointment of a successor. Notice of such
resignation or removal and appointment shall be mailed by the
Trustee to each Unitholder. At the present time, pursuant to a
contract with the Evaluator, Muller Data Corporation, a
non-affiliated firm regularly engaged in the business of
evaluating, quoting or appraising comparable securities, provides
portfolio evaluations of the Bonds in the Trusts which are then
reviewed by the Evaluator. In the event the Sponsor is unable to
obtain current evaluations from Muller Data Corporation, it may
make its own evaluations or it may utilize the services of any
other non-affiliated evaluator or evaluators it deems
appropriate.
Amendment and Termination. The Trust Agreements may be
amended by the Trustee and the Sponsor without the consent of any
of the Unitholders: (1) to cure any ambiguity or to correct or
supplement any provision which may be defective or inconsistent;
(2) to change any provision thereof as may be required by the
Securities and Exchange Commission or any successor governmental
agency; or (3) to make such provisions as shall not adversely
affect the interests of the Unitholders. The Trust Agreements
may also be amended in any respect by the Sponsor and the
Trustee, or any of the provisions thereof may be waived, with the
written consent of the holders of Units representing 66-2/3% of
the Units then outstanding, provided that no such amendment or
waiver will reduce the interest in a Series of the Trust of any
Unitholder without the consent of such Unitholder or reduce the
percentage of Units required to consent to any such amendment or
waiver without the consent of all Unitholders. In no event shall
the Trust Agreements be amended to increase the number of Units
issuable thereunder or to permit, except in accordance with the
provisions of the Trust Agreements, the acquisition of any Bonds
in addition to or in substitution for those in the Trust. The
Trustee shall promptly notify Unitholders of the substance of any
such amendment.
The Trust Agreements provide that a Series of the Trust
shall terminate upon the maturity, redemption or other
disposition, of the last of the Bonds held in such Series, but in
no event later than the Mandatory Termination Date set forth
under "Essential Information" in Part Two for each Trust. If the
value of a Series of the Trust shall be less than the applicable
minimum Trust value stated under "Essential Information" in Part
Two (40% of the aggregate principal amount of Bonds deposited in
the Trust), the Trustee may, in its discretion, and shall, when
so directed by the Sponsor, terminate such Series of the Trust.
A Series of the Trust may be terminated at any time by the
holders of Units representing 66-2/3% of the Units of such Series
then outstanding. In the event of termination, written notice
thereof will be sent by the Trustee to all Unitholders of such
Series. Within a reasonable period after termination, the
Trustee will sell any Bonds remaining in such Series of the Trust
and, after paying all expenses and charges incurred by such
Series of the Trust, will distribute to Unitholders of such
Series (upon surrender for cancellation of certificates for
Units, if issued) their pro rata share of the balances remaining
in the Interest and Principal Accounts of such Series.
Limitations on Liability. The Sponsor: The Sponsor is
liable for the performance of its obligations arising from its
responsibilities under the Trust Agreements, but will be under no
liability to the Unitholders for taking any action or refraining
from any action in good faith pursuant to the Trust Agreements or
for errors in judgment, except in cases of its own gross
negligence, bad faith or willful misconduct. The Sponsor shall
not be liable or responsible in any way for depreciation or loss
incurred by reason of the sale of any Bonds.
The Trustee: The Trust Agreements provides that the Trustee
shall be under no liability for any action taken in good faith in
reliance upon prima facie properly executed documents or for the
disposition of monies, Bonds, or certificates except by reason of
its own gross negligence, bad faith or willful misconduct, nor
shall the Trustee be liable or responsible in any way for
depreciation or loss incurred by reason of the sale by the
Trustee of any Bonds. In the event that the Sponsor shall fail
to act, the Trustee may act and shall not be liable for any such
action taken by it in good faith. The Trustee shall not be
personally liable for any taxes or other governmental charges
imposed upon or in respect of the Bonds or upon the interest
thereon. In addition, the Trust Agreements contains other
customary provisions limiting the liability of the Trustee.
The Evaluator: The Trustee and Unitholders may rely on any
evaluation furnished by the Evaluator and shall have no
responsibility for the accuracy thereof. The Trust Agreements
provide that the determinations made by the Evaluator 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 or Unitholders for errors in
judgment, but shall be liable only for its gross negligence, lack
of good faith or willful misconduct.
EXPENSES OF THE TRUST
The Sponsor will not charge any Series of the Trust fees for
services performed as Sponsor, except the Sponsor shall receive
an annual surveillance fee for services performed for such Trust
Funds in an amount not to exceed the amount shown under
"Essential Information" in Part Two for performing portfolio
surveillance services for each Trust. Such fee (which is based
on the largest number of Units outstanding during each year) may
exceed the actual costs of providing such surveillance services
for a Trust, but at no time will the total amount received for
portfolio surveillance services rendered to such Series in any
calendar year exceed the aggregate cost to the Sponsor for
providing such services. 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 paid all
the expenses of creating and establishing the Trust, including
the cost of the initial preparation, printing and execution of
the Prospectus, Trust Agreements and the certificates, legal and
accounting expenses, advertising and selling expenses, payment of
closing fees, expenses of the Trustee, initial evaluation fees
and other out-of-pocket expenses.
The Trustee receives for its services the fee set forth
under "Essential Information" appearing in Part Two. The Trustee
fee which is calculated monthly is based on the largest aggregate
principal amount of Bonds in each Trust Fund at any time during
the period. Funds that are available for future distributions,
redemptions and payment of expenses are held in accounts which
are non-interest bearing to Unitholders and are available for use
by the Trustee pursuant to normal banking procedures; however,
the Trustee is also authorized by the Trust Agreements to make
from time to time certain non-interest bearing advances to the
Trust Funds. The Trustee's fee is payable on or before each
Distribution Date. See "Unitholders-Distributions to
Unitholders."
For evaluation of Bonds in a Series of the Trust, the
Evaluator receives a fee payable monthly, calculated on an annual
rate as set forth under "Essential Information" in Part Two,
based upon the largest aggregate principal amount of Bonds in
such Series of the Trust at any time during such monthly period.
The Trustee's fees, the Evaluator's fees and the
surveillance fees are deducted from the Interest Account of each
Series to the extent funds are available and then from the
Principal Account of such Series. Such fees may be increased
without approval of Unitholders by amounts not exceeding a
proportionate increase in the Consumer Price Index entitled "All
Services Less Rent of Shelter", published by the United States
Department of Labor, or any equivalent index substituted
therefor.
The following additional charges are or may be incurred by a
Series of the Trust: (a) fees for the Trustee's extraordinary
services; (b) expenses of the Trustee (including legal and
auditing expenses, but not including any fees and expenses
charged by any agent for custody and safeguarding of Bonds) and
of bond counsel, if any; (c) various governmental charges; (d)
expenses and costs of any action taken by the Trustee to protect
the Trust or such Series, or the rights and interests of the
Unitholders; (e) indemnification of the Trustee for any loss,
liability or expense incurred by it in the administration of such
Series of the Trust not resulting from gross negligence, bad
faith or willful misconduct on its part; (f) indemnification of
the Sponsor for any loss, liability or expense incurred in acting
as Sponsor of such Series of the Trust without gross negligence,
bad faith or willful misconduct; and (g) expenditures incurred in
contacting Unitholders upon termination of the Series. The fees
and expenses set forth herein are payable out of such Series of
the Trust and, when owed to the Trustee, are secured by a lien on
the assets of the Series of the Trust.
Fees and expenses of a Series of the Trust shall be
deducted from the Interest Account of such Series, or, to the
extent funds are not available in such Account, from the
Principal Account of such Series. The Trustee may withdraw from
the Principal Account or the Interest Account of such Series such
amounts, if any, as it deems necessary to establish a reserve for
any taxes or other governmental charges or other extraordinary
expenses payable out of that Series of the Trust. Amounts so
withdrawn shall be credited to a separate account maintained for
such Series known as the Reserve Account and shall not be
considered a part of such Series when determining the value of
the Units of such Series until such time as the Trustee shall
return all or any part of such amounts to the appropriate
account.
THE SPONSOR
The Sponsor, Kemper Unit Investment Trusts, with an office
at 77 West Wacker Drive, 29th Floor, Chicago, Illinois 60601,
(800) 621-5024, is a service of Kemper Securities, Inc., which is
a wholly-owned subsidiary of Kemper Financial Companies, Inc.,
which, in turn, is a wholly-owned subsidiary of Kemper
Corporation. The Sponsor acts as underwriter of a number of
other Kemper unit investment trusts and will act as underwriter
of any other unit investment trust created by the Sponsor in the
future. As of January 31, 1994, the total stockholder's equity
of Kemper Securities, Inc. was approximately $261,673,436
(unaudited).
If at any time the Sponsor shall fail to perform any of its
duties under the Trust Agreements or shall become incapable of
acting or shall be adjudged a bankrupt or insolvent or its
affairs are taken over by public authorities, then the Trustee
may (a) appoint a successor sponsor at rates of compensation
deemed by the Trustee to be reasonable and not exceeding such
reasonable amounts as may be prescribed by the Securities and
Exchange Commission, or (b) terminate the Trust Agreements and
liquidate the Trust or any Series thereof as provided therein or
(c) continue to act as Trustee without terminating the Trust
Agreements.
The foregoing financial information with regard to the
Sponsor relates to the Sponsor only and not to this Trust or any
Series. Such information is included in this Prospectus only for
the purposes of informing investors as to the financial
responsibility of the Sponsor and its ability to carry out its
contractual obligations with respect to the Series of the Trust.
More comprehensive financial information can be obtained upon
request from the Sponsor.
LEGAL OPINIONS
The legality of the Units offered hereby and certain matters
relating to federal tax law were passed upon by Chapman and
Cutler, 111 West Monroe Street, Chicago, Illinois 60603, as
counsel for the Sponsor.
INDEPENDENT AUDITORS
The statement of net assets, including the schedule of
investments, appearing in Part Two of this Prospectus and
Registration Statement, with information pertaining to the
specific Series of the Trust to which such statement relates, has
been audited by Ernst & Young LLP, independent auditors, as set
forth in their report appearing in Part Two and is included in
reliance upon such report given upon the authority of such firm
as experts in accounting and auditing.
<PAGE>
Kemper Defined Funds
Insured Corporate Series 5
Part Two
Dated April 28, 1995
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.
NOTE: Part Two of this Prospectus May Not Be Distributed unless
Accompanied by
Part One.
<PAGE>
Kemper Defined Funds
Insured Corporate Series 5
Essential Information
As of March 17, 1995
Sponsor and Evaluator: Kemper Unit Investment
Trusts
Trustee: Investors Fiduciary Trust
Company
<TABLE>
<CAPTION>
General Information
<S>
<C>
Principal Amount of Securities
$42,500,000
Number of Units
4,250,000
Fractional Undivided Interest in the Trust per Unit
1/4,250,000
Principal Amount of Securities per Unit
$10
Calculation of Public Offering Price:
Aggregate Value of Securities in the Trust
$41,147,310
Aggregate Value of Securities per Unit
$9.682
Principal Cash per Unit (1)
$-
Purchased Interest per Unit through settlement date
of March 24, 1995
$.043
Total Price including Purchase Interest per Unit
$9.725
Sales Charge of 3.9% of Public Offering Price
(4.058% of net amount invested) per Unit
$.395
Public Offering Price per Unit
$10.120
Redemption Price per Unit
$9.571
Calculation of Estimated Net Annual Interest Income per Unit:
Estimated Annual Interest Income
$.6975
Less: Estimated Annual Expense
$.0238
Estimated Net Annual Interest Income
$.6737
Daily Rate at which Estimated Net Annual Interest Income
Accrues per Unit
$.001871
Estimated Current Return Based on Public Offering Price (2)
6.66%
Estimated Long-Term Return (2)
6.91%
</TABLE>
[FN]
1. This amount, if any, represents principal cash or overdraft
which is an
asset or liability of the Trust and is included in the Public
Offering Price.
2. The Estimated Current Return and Estimated Long-Term Return
will vary with
changes in the Public Offering Price and there is no assurance
that such
returns on the date hereof will be applicable on a subsequent
date of
purchase. These estimated returns are increased for transactions
entitled to
a reduced sales charge (see "Public Offering of Units - Public
Offering Price"
- - Part One).
<PAGE>
Kemper Defined Funds
Insured Corporate Series 5
Essential Information (continued)
As of March 17, 1995
Sponsor and Evaluator: Kemper Unit Investment
Trusts
Trustee: Investors Fiduciary Trust
Company
Record and Distribution Date Record Date is the
first of each
month and distributions
to
Unitholders on such
record dates
will be made on the
15th day of the
month.
Distribution Dates No distribution (other
than capital
gains distributions)
need be made
from the Principal
Account if the
balance therein,
excluding capital
gains, is less than
$1.00 per Unit.
Trustee's Annual Fee (including
estimated expenses) $1.61 per 100 Units
(includes $1.63
of Trustee's annual fee
per $1,000
principal amount of
underlying
Securities and $.15 of
out-of-pocket
expenses per 100
Units).
Evaluator's Annual Fee $.30 per $1,000
principal amount of
underlying Securities.
Surveillance Fee $.25 per $1,000
principal amount of
underlying Securities.
Date of Trust Agreement and
Initial Deposit October 11, 1994
Mandatory Termination Date December 31, 2030
Weighted Average Stated Maturity
of Bonds 9 years
Discretionary Liquidation Amount The Trust may be
terminated if the
value thereof is less
than
$17,000,000 (40% of the
par value of
the Securities
deposited in the
Trust).
<PAGE>
Report of Independent Auditors
Unitholders
Kemper Defined Funds
Insured Corporate Series 5
We have audited the accompanying statement of assets and
liabilities,
including the schedule of investments, of Kemper Defined Funds
Insured
Corporate Series 5 as of December 31, 1994, and the related
statements of
operations and changes in net assets for the period from October
11, 1994
(Date of Initial Deposit) to December 31, 1994. These financial
statements
are the responsibility of the Trust's sponsor. Our
responsibility is to
express an opinion on these 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 investments owned as of
December 31, 1994,
by correspondence with the custodial bank. 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 that 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 Kemper Defined
Funds Insured
Corporate Series 5 at December 31, 1994, and the results of its
operations and
the changes in its net assets for the period from October 11,
1994 to December
31, 1994, in conformity with generally accepted accounting
principles.
Ernst & Young LLP
Kansas City, Missouri
April 14, 1995
<PAGE>
Kemper Defined Funds
Insured Corporate Series 5
Statement of Assets and Liabilities
December 31, 1994
<TABLE>
<CAPTION>
<S> <C>
<C>
Assets
Corporate Securities, at value (cost $21,832,035)
$21,781,030
Interest receivable
512,110
Cash
3,507
- -----------
Total assets
22,296,647
Liabilities and net assets
Amount due to sponsor
381,422
Accrued liabilities
704
- -----------
382,126
Net assets, applicable to 2,375,000 Units
outstanding:
Cost of Trust assets, exclusive of interest $21,832,035
Unrealized depreciation (51,005)
Distributable funds 133,491
-----------
- -----------
Net assets
$21,914,521
===========
Net asset value per Unit
$9.23
===========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
Kemper Defined Funds
Insured Corporate Series 5
Statement of Operations
<TABLE>
<CAPTION>
Period from
October 11,
1994 to
December 31,
1994
<S>
<C>
--------
Investment income - interest
$208,039
Expenses:
Trustee's fees and related expenses
6,693
Evaluator's and portfolio surveillance fees
2,005
--------
Total expenses
8,698
--------
Net investment income
199,341
Unrealized depreciation on investments
during the period
(51,005)
--------
Net increase in net assets resulting
from operations
$148,336
========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
Kemper Defined Funds
Insured Corporate Series 5
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Period from
October 11,
1994 to
December 31,
1994
<S>
<C>
- -----------
Operations:
Net investment income
$199,341
Unrealized depreciation on investments
during the period
(51,005)
- -----------
Net increase in net assets resulting
from operations
148,336
Distributions to Unitholders:
Net investment income
(15,804)
Principal from investment transactions
(100,663)
- -----------
Total distributions to Unitholders
(116,467)
Capital transactions:
Issuance of 2,375,000 Units
21,882,652
- -----------
Total increase in net assets
21,914,521
Net assets:
Beginning of the period
-
- -----------
End of the period (including distributable
funds applicable to Trust Units of
$133,491 at December 31, 1994)
$21,914,521
===========
Trust Units outstanding at the end of the period
2,375,000
===========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
<TABLE>
Kemper
Defined Funds
Insured
Corporate Series 5
Schedule of
Investments
December
31, 1994
<CAPTION>
Coupon
Maturity Redemption Principal
Name of Issuer(5) Rate
Date Provisions(2) Rating(1) Amount(4) Value(3)
<S> <C> <C>
<C> <C> <C> <C>
-------
- ---------- -------------- -------- ----------- -----------
Pacific Gas & Electric Company 7.875%
3/01/2002 Non-Callable AAA $4,750,000 $4,664,500
Pennsylvania Power & Light Company 6.875
3/01/2004 Non-Callable AAA 4,750,000 4,369,905
Philadelphia Electric Company 6.625
3/01/2003 Non-Callable AAA 4,750,000 4,285,023
Public Service Electric & Gas Company 6.75
3/01/2006 Non-Callable AAA 4,750,000 4,214,342
Texas Utilities Electric Company 6.75
7/01/2005 Non-Callable AAA 4,750,000 4,247,260
----------- -----------
$23,750,000 $21,781,030
=========== ===========
</TABLE>
[FN]
See accompanying notes to Schedule of Investments.
<PAGE>
Kemper Defined Funds
Insured Corporate Series 5
Notes to Schedule of Investments
1. All ratings are by Standard & Poor's Corporation, unless
marked with the
symbol "*", in which case the rating is by Moody's Investors
Service, Inc.
The symbol "NR" indicates Bonds for which no rating is available.
2. There is shown under this heading the year in which each
issue of Bonds is
initially redeemable and the redemption price for that year or,
if currently
redeemable, the redemption price currently in effect; unless
otherwise
indicated, each issue continues to be redeemable at declining
prices
thereafter, but not below par value. The prices at which the
Bonds may be
redeemed or called prior to maturity may or may not include a
premium and, in
certain cases, may be less than the cost of the Bonds to the
Trust. In
addition, certain Bonds in the Portfolio may be redeemed in whole
or in part
other than by operation of the stated redemption provisions under
certain
unusual or extraordinary circumstances specified in the
instruments setting
forth the terms and provisions of such Bonds.
3. See Note 1 to the accompanying financial statements for a
description of
the method of determining cost and value.
4. At December 31, 1994, the Portfolio of the Trust consists of
5 obligations
issued by public utility companies. None of the Bonds in the
Trust will
mature within five years after December 31, 1994.
5. Insurance on the Bonds in the Trust was obtained directly by
the issuer of
the Bonds or by the Trust's sponsor.
[FN]
See accompanying notes to financial statements.
<PAGE>
Kemper Defined Funds
Insured Corporate Series 5
Notes to Financial Statements
1. Significant Accounting Policies
Valuation of Securities
As of the date of the financial statements and during the Trust's
primary
offering period, Corporate Securities are stated at offering
prices as
determined by Kemper Unit Investment Trusts (A Service of Kemper
Securities,
Inc.), the "Evaluator" and sponsor of the Trust. At the end of
the primary
offering period and thereafter, the Corporate Securities will be
stated at bid
prices as determined by Kemper Unit Investment Trusts. The
aggregate prices
of the Corporate Securities are determined based on (a) current
prices of the
Corporate Securities, (b) current prices for comparable corporate
securities,
(c) appraisal, or (d) any combination of the above. (See Note 5
- - Insurance.)
Cost of Securities
Cost of the Trust's Securities is based on the offering prices of
the
Securities on the dates of deposit of such Securities acquired
during the
primary sales period. Premium or discount is not being
amortized. Realized
gain (loss) from Security transactions is reported on an
identified cost
basis.
Investment Income
Interest income consists of interest accrued as earned.
2. Unrealized Appreciation and Depreciation
Following is an analysis of net unrealized depreciation at
December 31, 1994:
<TABLE>
<CAPTION>
<S>
<C>
Gross unrealized depreciation
$(62,832)
Gross unrealized appreciation
11,827
- ---------
Net unrealized depreciation
$(51,005)
=========
</TABLE>
<PAGE>
Kemper Defined Funds
Insured Corporate Series 5
Notes to Financial Statements (continued)
3. Transactions with Affiliates
From the inception of the Trust through January 31, 1995, the
Trustee,
Investors Fiduciary Trust Company (IFTC), was 50% owned by Kemper
Financial
Services, Inc., an affiliate of Kemper Unit Investment Trusts.
On that date,
State Street Boston Corporation acquired IFTC. Payments to the
Trustee
included $1.63 of Trustee's annual fee per $1,000 principal
amount of
underlying Securities in the Trust through December 31, 1994,
calculated
monthly, based on the largest aggregate principal amount of
Securities in the
Trust at any time during the month and reimbursement of
out-of-pocket expenses
of $.15 per 100 Units through December 31, 1994, calculated
monthly, based on
the largest number of Trust Units outstanding at any time during
the month.
The annual Evaluator's fee and portfolio surveillance fee,
calculated monthly,
are $.30 and $.25, respectively, per $1,000 principal amount of
Securities in
the Trust based on the largest aggregate principal amount of
Securities in the
Trust at any time during the month.
The amount of purchased interest on Securities acquired during
the primary
sales period is paid by the sponsor. The sponsor will be
reimbursed for such
payment subsequent to the primary sales period.
4. Federal Income Taxes
The Trust is not an association taxable as a corporation for
federal income
tax purposes. Each Unitholder is considered to be the owner of a
pro rata
portion of the Trust under Subpart E, Subchapter J of Chapter 1
of the
Internal Revenue Code of 1986, as amended. Accordingly, no
provision has been
made for federal income taxes.
5. Other Information
Cost to Investors
The cost to initial investors of Units of the Trust was based on
the aggregate
offering price of the Securities on the date of an investor's
purchase, plus
or minus a pro rata share of cash or overdraft in the Principal
Account,
purchased interest and daily accrued interest, plus a sales
charge of 3.9% of
the Public Offering Price (equivalent to 4.058% of the net amount
invested).
The Public Offering Price for secondary market transactions is
based on the
aggregate bid prices of the Securities plus or minus a pro rata
share of cash
or overdraft in the Principal Account, purchased interest and
daily accrued
interest on the date of an investor's purchase, plus a sales
charge of 4.5% of
the Public Offering Price (equivalent to 4.712% of the net amount
invested).
<PAGE>
<TABLE>
Kemper Defined Funds
Insured Corporate Series 5
Notes to Financial Statements (continued)
5. Other Information (continued)
Insurance
Insurance guaranteeing the payment of all principal and interest
on the Bonds
in the portfolio has been obtained from an independent company by
the issuer
of the Bonds involved or by the Trust's sponsor. Insurance
obtained by the
Trust's sponsor or a Bond issuer is effective as long as such
Bonds are
outstanding. As a result of such insurance, the Units of the
Trust have
received a rating of "AAA" by Standard & Poor's Corporation. No
representation is made as to any insurer's ability to meet its
commitments.
Selected data per Unit of the Trust outstanding during the period
- -
<CAPTION>
Period from
October 11,
1994 to
December 31,
1994
<S>
<C>
-----
Investment income - interest
$.12
Expenses
.01
-----
Net investment income
.11
Distributions to Unitholders:
Net investment income
(.01)
principal from investment transactions
(.07)
-----
Total distributions to Unitholders
(.08)
Net loss on investments
(.05)
-----
Change in net asset value
(.02)
Net asset value:
Beginning of the period
9.25*
-----
End of the period, including distributable funds
$9.23
=====
</TABLE>
[FN]
* Value at Date of Initial Deposit (October 11, 1994).
<PAGE>
Consent of Independent Auditors
We consent to the reference to our firm under the caption
"Independent
Auditors" and to the use of our report dated April 14, 1995, in
this Post-
Effective Amendment to the Registration Statement (Form S-6) and
related
Prospectus of Kemper Defined Funds Insured Corporate Series 5
dated April 28,
1995.
Ernst & Young LLP
Kansas City, Missouri
April 28, 1995
<PAGE>
Kemper Defined Funds
Insured Corporate Series 6
Part Two
Dated April 28, 1995
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.
NOTE: Part Two of this Prospectus May Not Be Distributed unless
Accompanied by
Part One.
<PAGE>
Kemper Defined Funds
Insured Corporate Series 6
Essential Information
As of March 17, 1995
Sponsor and Evaluator: Kemper Unit Investment
Trusts
Trustee: Investors Fiduciary Trust
Company
<TABLE>
<CAPTION>
General Information
<S>
<C>
Principal Amount of Securities
$23,650,000
Number of Units
2,365,000
Fractional Undivided Interest in the Trust per Unit
1/2,365,000
Principal Amount of Securities per Unit
$10
Calculation of Public Offering Price:
Aggregate Value of Securities in the Trust
$23,097,498
Aggregate Value of Securities per Unit
$9.766
Principal Cash per Unit (1)
$-
Purchased Interest per Unit through settlement date
of March 24, 1995
$.049
Total Price including Purchase Interest per Unit
$9.815
Sales Charge of 4.9% of Public Offering Price
(5.152% of net amount invested) per Unit
$.506
Public Offering Price per Unit
$10.321
Redemption Price per Unit
$9.709
Calculation of Estimated Net Annual Interest Income per Unit:
Estimated Annual Interest Income
$.7860
Less: Estimated Annual Expense
$.0249
Estimated Net Annual Interest Income
$.7611
Daily Rate at which Estimated Net Annual Interest Income
Accrues per Unit
$.002114
Estimated Current Return Based on Public Offering Price (2)
7.37%
Estimated Long-Term Return (2)
7.44%
</TABLE>
[FN]
1. This amount, if any, represents principal cash or overdraft
which is an
asset or liability of the Trust and is included in the Public
Offering Price.
2. The Estimated Current Return and Estimated Long-Term Return
will vary with
changes in the Public Offering Price and there is no assurance
that such
returns on the date hereof will be applicable on a subsequent
date of
purchase. These estimated returns are increased for transactions
entitled to
a reduced sales charge (see "Public Offering of Units - Public
Offering Price"
- - Part One).
<PAGE>
Kemper Defined Funds
Insured Corporate Series 6
Essential Information (continued)
As of March 17, 1995
Sponsor and Evaluator: Kemper Unit Investment
Trusts
Trustee: Investors Fiduciary Trust
Company
Record and Distribution Date Record Date is the
first of each
month and distributions
to
Unitholders on such
record dates
will be made on the
15th day of the
month.
Distribution Dates No distribution (other
than capital
gains distributions)
need be made
from the Principal
Account if the
balance therein,
excluding capital
gains, is less than
$1.00 per Unit.
Trustee's Annual Fee (including
estimated expenses) $1.76 per 100 Units
(includes $1.74
of Trustee's annual fee
per $1,000
principal amount of
underlying
Securities and $.15 of
out-of-pocket
expenses per 100
Units).
Evaluator's Annual Fee $.30 per $1,000
principal amount of
underlying Securities.
Surveillance Fee $.25 per $1,000
principal amount of
underlying Securities.
Date of Trust Agreement and
Initial Deposit October 11, 1994
Mandatory Termination Date December 31, 2030
Weighted Average Stated Maturity
of Bonds 30.22 years
Discretionary Liquidation Amount The Trust may be
terminated if the
value thereof is less
than
$9,460,000 (40% of the
par value of
the Securities
deposited in the
Trust).
<PAGE>
Report of Independent Auditors
Unitholders
Kemper Defined Funds
Insured Corporate Series 6
We have audited the accompanying statement of assets and
liabilities,
including the schedule of investments, of Kemper Defined Funds
Insured
Corporate Series 6 as of December 31, 1994, and the related
statements of
operations and changes in net assets for the period from October
11, 1994
(Date of Initial Deposit) to December 31, 1994. These financial
statements
are the responsibility of the Trust's sponsor. Our
responsibility is to
express an opinion on these 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 investments owned as of
December 31, 1994,
by correspondence with the custodial bank. 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 that 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 Kemper Defined
Funds Insured
Corporate Series 6 at December 31, 1994, and the results of its
operations and
the changes in its net assets for the period from October 11,
1994 to December
31, 1994, in conformity with generally accepted accounting
principles.
Ernst & Young LLP
Kansas City, Missouri
April 14, 1995
<PAGE>
Kemper Defined Funds
Insured Corporate Series 6
Statement of Assets and Liabilities
December 31, 1994
<TABLE>
<CAPTION>
<S> <C>
<C>
Assets
Securities, at value (cost $11,706,110)
$11,842,419
Interest receivable
284,958
Cash
62,618
- -----------
Total assets
12,189,995
Liabilities and net assets
Amount due to sponsor
265,388
Accrued liabilities
411
- -----------
265,799
Net assets, applicable to 1,290,000 Units
outstanding:
Cost of Trust assets, exclusive of interest $11,706,110
Unrealized appreciation 136,309
Distributable funds 81,777
-----------
- -----------
Net assets
$11,924,196
===========
Net asset value per Unit
$9.24
===========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
Kemper Defined Funds
Insured Corporate Series 6
Statement of Operations
<TABLE>
<CAPTION>
Period from
October 11,
1994 to
December 31,
1994
<S>
<C>
--------
Investment income - interest
$144,120
Expenses:
Trustee's fees and related expenses
4,344
Evaluator's and portfolio surveillance fees
1,232
--------
Total expenses
5,576
--------
Net investment income
138,544
Unrealized appreciation on investments
during the period
136,309
--------
Net increase in net assets resulting
from operations
$274,853
========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
Kemper Defined Funds
Insured Corporate Series 6
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Period from
October 11,
1994 to
December 31,
1994
<S>
<C>
- -----------
Operations:
Net investment income
$138,544
Unrealized appreciation on investments
during the period
136,309
- -----------
Net increase in net assets resulting
from operations
274,853
Distributions to Unitholders:
Net investment income
(17,106)
Principal from investment transactions
(69,705)
- -----------
Total distributions to Unitholders
(86,811)
Capital transactions:
Issuance of 1,290,000 Units
11,736,154
- -----------
Total increase in net assets
11,924,196
Net assets:
Beginning of the period
-
- -----------
End of the period (including distributable
funds applicable to Trust Units of
$81,777 at December 31, 1994)
$11,924,196
===========
Trust Units outstanding at the end of the period
1,290,000
===========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
<TABLE>
Kemper
Defined Funds
Insured
Corporate Series 6
Schedule of
Investments
December
31, 1994
<CAPTION>
Coupon
Maturity Redemption Principal
Name of Issuer(5) Rate
Date Provisions(2) Rating(1) Amount(4) Value(3)
<S> <C> <C>
<C> <C> <C> <C>
-------
- ---------- -------------- -------- ----------- -----------
Duke Power Company 7.875%
5/01/2024 1999 @ 103.59 AAA $600,000 $559,614
New York Telephone Company 7.25
2/15/2024 2004 @ 103.06 AAA 1,500,000 1,288,875
Pacific Gas & Electric Company 8.25
11/01/2022 2002 @ 103.14 AAA 3,000,000 2,867,760
Pennsylvania Power & Light Company 7.30
3/01/2024 2004 @ 103.41 AAA 1,500,000 1,292,505
Public Service Electric & Gas Company 7.00
9/01/2024 2003 @ 102.74 AAA 1,500,000 1,234,185
Tennessee Valley Authority 8.625
11/15/2029 1999 @ 106.16 AAA 3,000,000 2,987,940
Texas Utilities Electric Company 7.625
7/01/2025 2003 @ 102.69 AAA 1,800,000 1,611,540
----------- -----------
$12,900,000 $11,842,419
=========== ===========
</TABLE>
[FN]
See accompanying notes to Schedule of Investments.
<PAGE>
Kemper Defined Funds
Insured Corporate Series 6
Notes to Schedule of Investments
1. All ratings are by Standard & Poor's Corporation, unless
marked with the
symbol "*", in which case the rating is by Moody's Investors
Service, Inc.
The symbol "NR" indicates Bonds for which no rating is available.
2. There is shown under this heading the year in which each
issue of Bonds is
initially redeemable and the redemption price for that year or,
if currently
redeemable, the redemption price currently in effect; unless
otherwise
indicated, each issue continues to be redeemable at declining
prices
thereafter, but not below par value. The prices at which the
Bonds may be
redeemed or called prior to maturity may or may not include a
premium and, in
certain cases, may be less than the cost of the Bonds to the
Trust. In
addition, certain Bonds in the Portfolio may be redeemed in whole
or in part
other than by operation of the stated redemption provisions under
certain
unusual or extraordinary circumstances specified in the
instruments setting
forth the terms and provisions of such Bonds.
3. See Note 1 to the accompanying financial statements for a
description of
the method of determining cost and value.
4. At December 31, 1994, the Portfolio of the Trust consists of
7 obligations
issued by public utility companies. Approximately 28% of the
aggregate
principal amount of Bonds in the Trust are subject to call by the
issuers
within five years after December 31, 1994.
5. Insurance on the Bonds in the Trust was obtained either
directly by the
issuer of the Bonds or by the Trust's sponsor.
[FN]
See accompanying notes to financial statements.
<PAGE>
Kemper Defined Funds
Insured Corporate Series 6
Notes to Financial Statements
1. Significant Accounting Policies
Valuation of Securities
As of the date of the financial statements and during the Trust's
primary
offering period, Securities are stated at offering prices as
determined by
Kemper Unit Investment Trusts (A Service of Kemper Securities,
Inc.), the
"Evaluator" and sponsor of the Trust. At the end of the primary
offering
period and thereafter, the Securities will be stated at bid
prices as
determined by Kemper Unit Investment Trusts. The aggregate
prices of the
Securities are determined based on (a) current prices of the
Securities, (b)
current prices for comparable securities, (c) appraisal, or (d)
any
combination of the above. (See Note 5 - Insurance.)
Cost of Securities
Cost of the Trust's Securities is based on the offering prices of
the
Securities on the dates of deposit of such Securities acquired
during the
primary sales period. Premium or discount is not being
amortized. Realized
gain (loss) from Security transactions is reported on an
identified cost
basis.
Investment Income
Interest income consists of interest accrued as earned.
2. Unrealized Appreciation and Depreciation
Following is an analysis of net unrealized appreciation at
December 31, 1994:
<TABLE>
<CAPTION>
<S>
<C>
Gross unrealized depreciation
$-
Gross unrealized appreciation
136,309
--------
Net unrealized appreciation
$136,309
========
</TABLE>
<PAGE>
Kemper Defined Funds
Insured Corporate Series 6
Notes to Financial Statements (continued)
3. Transactions with Affiliates
From the inception of the Trust through January 31, 1995, the
Trustee,
Investors Fiduciary Trust Company (IFTC), was 50% owned by Kemper
Financial
Services, Inc., an affiliate of Kemper Unit Investment Trusts.
On that date,
State Street Boston Corporation acquired IFTC. Payments to the
Trustee
included $1.74 of Trustee's annual fee per $1,000 principal
amount of
underlying Securities in the Trust through December 31, 1994,
calculated
monthly, based on the largest aggregate principal amount of
Securities in the
Trust at any time during the month and reimbursement of
out-of-pocket expenses
of $.15 per 100 Units through December 31, 1994, calculated
monthly, based on
the largest number of Trust Units outstanding at any time during
the month.
The annual Evaluator's fee and portfolio surveillance fee,
calculated monthly,
are $.30 and $.25, respectively, per $1,000 principal amount of
Securities in
the Trust based on the largest aggregate principal amount of
Securities in the
Trust at any time during the month.
The amount of purchased interest on Securities acquired during
the primary
sales period is paid by the sponsor. The sponsor will be
reimbursed for such
payment subsequent to the primary sales period.
4. Federal Income Taxes
The Trust is not an association taxable as a corporation for
federal income
tax purposes. Each Unitholder is considered to be the owner of a
pro rata
portion of the Trust under Subpart E, Subchapter J of Chapter 1
of the
Internal Revenue Code of 1986, as amended. Accordingly, no
provision has been
made for federal income taxes.
5. Other Information
Cost to Investors
The cost to initial investors of Units of the Trust was based on
the aggregate
offering price of the Securities on the date of an investor's
purchase, plus
or minus a pro rata share of cash or overdraft in the Principal
Account,
purchased interest and daily accrued interest, plus a sales
charge of 4.9% of
the Public Offering Price (equivalent to 5.152% of the net amount
invested).
The Public Offering Price for secondary market transactions is
based on the
aggregate bid prices of the Securities plus or minus a pro rata
share of cash
or overdraft in the Principal Account, purchased interest and
daily accrued
interest on the date of an investor's purchase, plus a sales
charge of 5.5% of
the Public Offering Price (equivalent to 5.820% of the net amount
invested).
<PAGE>
<TABLE>
Kemper Defined Funds
Insured Corporate Series 6
Notes to Financial Statements (continued)
5. Other Information (continued)
Insurance
Insurance guaranteeing the payment of all principal and interest
on the Bonds
in the portfolio has been obtained from an independent company by
the issuer
of the Bonds involved or by the Trust's sponsor. Insurance
obtained by the
Trust's sponsor or a Bond issuer is effective as long as such
Bonds are
outstanding. As a result of such insurance, the Units of the
Trust have
received a rating of "AAA" by Standard & Poor's Corporation. No
representation is made as to any insurer's ability to meet its
commitments.
Selected data per Unit of the Trust outstanding during the period
- -
<CAPTION>
Period from
October 11,
1994 to
December 31,
1994
<S>
<C>
-----
Investment income - interest
$.15
Expenses
.01
-----
Net investment income
.14
Distributions to Unitholders:
Net investment income
(.02)
Principal from investment transactions
(.07)
-----
Total distributions to Unitholders
(.09)
Net gain on investments
.05
-----
Change in net asset value
.10
Net asset value:
Beginning of the period
9.14*
-----
End of the period, including distributable funds
$9.24
=====
</TABLE>
[FN]
* Value at Date of Initial Deposit (October 11, 1994).
<PAGE>
Consent of Independent Auditors
We consent to the reference to our firm under the caption
"Independent
Auditors" and to the use of our report dated April 14, 1995, in
this Post-
Effective Amendment to the Registration Statement (Form S-6) and
related
Prospectus of Kemper Defined Funds Insured Corporate Series 6
dated April 28,
1995.
Ernst & Young LLP
Kansas City, Missouri
April 28, 1995
<PAGE>
Contents of Post-Effective AmendmentTo Registration Statement
This Post-Effective amendment to the Registration Statement
comprises the following papers and documents:
The facing sheet
The prospectus
The signatures
The Consent of Independent Accountants
<PAGE>
Signatures
Pursuant to the requirements of the Securities Act of 1933,
The Registrant, Kemper Defined Funds Series 26, certifies that it
meets all of the requirements for effectiveness of this
registration statement pursuant to Rule 485(b) under the
Securities Act of 1933 and 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 27th day of April, 1995.
Kemper Defined Funds Series 26
Registrant
By: Kemper Unit Investment Trusts
(a service of Kemper
Securities, Inc.)
Depositor
By: Michael J. Thoms
Vice President
Pursuant to the requirements of the Securities Act of 1933,
this Amendment to the Registration Statement has been signed
below on April 27, 1995 by the following persons, who constitute
a majority of the Board of Directors of Kemper Securities, Inc.
Signature Title
James R. Boris Chairman and Chief Executive Officer
James R. Boris
Stephen G. McConahey President and Chief Operating Officer
Stephen G. McConahey
Frank V. Geremia Senior Executive Vice President
Frank V. Geremia
David M. Greene Senior Executive Vice President
David M. Greene
Arthur J. McGivern Senior Executive Vice President and
Director
Arthur J. McGivern
Ramon Pecuch Senior Executive Vice President and
Director
Ramon Pecuch
Thomas R. Reedy Senior Executive Vice President and
Director
Thomas R. Reedy
Janet L. Reali Executive Vice President and Director
Janet L. Reali
Daniel D. Williams Executive Vice President and Treasurer
Daniel D. Williams
David B. Mathis Director
David B. Mathis
Stephen B. Timbers Director
Stephen B. Timbers
Donald F. Eller Director
Donald F. Eller
Michael J. Thoms
Michael J. Thoms signs this document pursuant to a Power of
Attorney filed with the Securities and Exchange Commission with
Amendment No. 1 to the Registration Statement on Form S-6 for
Kemper Defined Funds Series 28 (Registration No. 33-56779).
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted
from
Post-effective Amendment Number 1 to Form S-6 and is qualified in
its entirety by reference to such Post-effective Amendment to
Form S-6.
</LEGEND>
<SERIES>
<NUMBER> 5
<NAME> KEMPER DEFINED FUNDS INSURED CORPORATE
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> OCT-11-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 21,832,035
<INVESTMENTS-AT-VALUE> 21,781,030
<RECEIVABLES> 512,110
<ASSETS-OTHER> 3,507
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 22,296,647
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 382,126
<TOTAL-LIABILITIES> 382,126
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 21,882,652
<SHARES-COMMON-STOCK> 2,375,000
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 82,874
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (51,005)
<NET-ASSETS> 21,914,521
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 208,039
<OTHER-INCOME> 0
<EXPENSES-NET> 8,698
<NET-INVESTMENT-INCOME> 199,341
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> (51,005)
<NET-CHANGE-FROM-OPS> 148,336
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (15,804)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> (100,663)
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 21,914,521
<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 schedule contains summary financial information extracted
from
Post-effective Amendment Number 1 to Form S-6 and is qualified in
its entirety by reference to such Post-effective Amendment to
Form S-6.
</LEGEND>
<SERIES>
<NUMBER> 6
<NAME> KEMPER DEFINED FUNDS INSURED CORPORATE
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> OCT-11-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 11,706,110
<INVESTMENTS-AT-VALUE> 11,842,419
<RECEIVABLES> 284,958
<ASSETS-OTHER> 62,618
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 12,189,995
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 265,799
<TOTAL-LIABILITIES> 265,799
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 11,736,154
<SHARES-COMMON-STOCK> 1,290,000
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 51,733
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 136,309
<NET-ASSETS> 11,924,196
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 144,120
<OTHER-INCOME> 0
<EXPENSES-NET> 5,576
<NET-INVESTMENT-INCOME> 138,544
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 136,309
<NET-CHANGE-FROM-OPS> 274,853
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (17,106)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> (69,705)
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 11,924,196
<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>
