<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 23, 1996
REGISTRATION NO. 333-08225
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- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 1
TO
FORM S-6
----------------
FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
A. EXACT NAME OF TRUST:
EVEREN UNIT INVESTMENT TRUSTS, SERIES 51
B. NAME OF DEPOSITOR:
EVEREN UNIT INVESTMENT TRUSTS,
a service of EVEREN Securities, Inc.
C. COMPLETE ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES:
EVEREN UNIT INVESTMENT TRUSTS
77 West Wacker Drive, 29th Floor
Chicago, Illinois 60601
D. NAME AND COMPLETE ADDRESS OF AGENT FOR SERVICE: Copy to:
ROBERT K. BURKE MARK J. KNEEDY
77 West Wacker Drive, 29th Floor c/o Chapman and Cutler
Chicago, Illinois 60601 111 West Monroe Street
Chicago, Illinois 60603
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
TITLE AND AMOUNT OF PROPOSED MAXIMUM AMOUNT OF
SECURITIES BEING REGISTERED AGGREGATE OFFERING PRICE REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Series An indefinite number of Indefinite $500 (previously paid)
51 Units of Beneficial Inter-
est pursuant to Rule 24f-2
under the Investment Com-
pany Act of 1940
</TABLE>
E. APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC:
As soon as practicable after the effective date of the Registration Statement.
[X] Check box if it is proposed that this filing will become effective at
2:00 P.M. on July 23, 1996 pursuant to paragraph (b) of Rule 487.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a) may determine.
<PAGE>
EVEREN UNIT INVESTMENT TRUSTS, SERIES 51
----------------
CROSS-REFERENCE SHEET
(FORM N-8B-2 ITEMS REQUIRED BY INSTRUCTIONS AS
TO THE PROSPECTUS IN FORM S-6)
<TABLE>
<CAPTION>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
----------- ---------------------
I. ORGANIZATION AND GENERAL INFORMATION
<C> <S> <C>
1. (a)Name of trust................... Prospectus front cover
(b)Title of securities issued...... Essential Information
2. Name and address of each depositor. General Information--Administration of
the Trusts
3. Name and address of trustee........
4. Name and address of principal
underwriters...................... The Tax-Exempt Portfolios--
Underwriting
5. State of organization of trust..... The Trust Funds
6. Execution and termination of trust
agreement......................... The Trust Funds; General Information--
Administration of the Trusts
7. Changes of name.................... The Trust Funds
8. Fiscal year........................ *
9. Litigation.........................
II. GENERAL DESCRIPTION OF THE TRUST AND
SECURITIES OF THE TRUST
10. (a)Registered or bearer securities. General Information--Unitholders
(b)Cumulative or distributive
securities........................ The Trust Funds
(c)Redemption...................... General Information--Redemption
(d)Conversion, transfer, etc....... General Information--Unitholders;
General Information--Market for Units
(e)Periodic payment plan........... *
(f)Voting rights................... General Information--Unitholders
General Information--Investment
(g)Notice of certificateholders.... Supervision; General Information--
Administration of the Trusts; General
Information--Unitholders
(h)Consents required............... General Information--Unitholders;
General Information--Administration of
the Trusts
(i)Other provisions................ The GNMA Portfolios--Federal Tax
Status; The Tax-Exempt Portfolios--
Federal Tax Status; The Tax-Exempt
Portfolios--Insurance on the Bonds
11. Type of securities comprising
units............................. The Trust Funds; General Information--
Trust Information
12. Certain information regarding peri-
odic payment
certificates...................... *
Essential Information; Public Offering
of Units; General Information--
13. (a) Load, fees, expenses, etc...... Interest, Estimated Long-Term Return
and Estimated Current Return; General
Information--Expenses of the Trusts
</TABLE>
- --------
* Inapplicable, answer negative or not required.
i
<PAGE>
<TABLE>
<CAPTION>
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
----------- ---------------------
<C> <S> <C>
(b)Certain information regarding
periodic payment certifi-
cates....................... *
(c)Certain percentages........... Essential Information; Public Offering
of Units
(d)Certain other fees, etc. pay-
able by holders............. General Information--Unitholders
(e)Certain profits receivable by
depositor, principal under-
writers, trustee or affili- General Information--Expenses of the
ated persons................ Trusts; Public Offering of Units
(f)Ratio of annual charges to in-
come........................ *
The Trust Funds;
14. Issuance of trust's securities... General Information--Unitholders
15. Receipt and handling of payments
from purchasers................. *
16. Acquisition and disposition of The Trust Funds; General Information--
underlying securities........... Trust Information; General
Information--Investment Supervision
General Information--Market for Units;
General Information--Redemption;
17. Withdrawal or redemption......... Public Offering of Units
18. (a)Receipt, custody and disposi-
tion of income.............. General Information--Unitholders
(b)Reinvestment of distributions. General Information--Distribution
Reinvestment
(c)Reserves or special funds..... General Information--Expenses of the
Trusts
(d)Schedule of distributions..... *
General Information--Unitholders;
19. Records, accounts and reports.... General Information--Redemption;
General Information--Administration of
the Trusts
20. Certain miscellaneous provisions
of trust agreement
(a)Amendment..................... General Information--Administration of
the
(b)Termination................... Trusts
(c)and (d) Trustee, removal and General Information--Administration of
successor................... the Trusts
(e)and (f) Depositor, removal and General Information--Administration of
successor................... the Trusts
21. Loans to security holders........ *
22. Limitations on liability......... General Information--Administration of
the Trusts
23. Bonding arrangements............. *
24. Other material provisions of
trust agreement................. *
III. ORGANIZATION, PERSONNEL AND
AFFILIATED PERSONS OF DEPOSITOR
25. Organization of depositor........ General Information--Administration of
the Trusts
26. Fees received by depositor....... See Items 13(a) and 13(e)
27. Business of depositor............ General Information--Administration of
the Trusts
28. Certain information as to offi-
cials and affiliated persons of General Information--Administration of
depositor....................... the Trusts
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
----------- ---------------------
<C> <S> <C>
29. Voting securities of depos- General Information--Administration of the
itor...................... Trusts
30. Persons controlling deposi-
tor.......................
31. Payment by depositor for
certain services rendered
to trust..................
32. Payment by depositor for *
certain other services
rendered to trust.........
33. Remuneration of employees
of depositor for certain
services rendered to
trust.....................
34. Remuneration of other per-
sons for certain services
rendered to trust.........
IV. DISTRIBUTION AND REDEMPTION
35. Distribution of trust's se- Public Offering of Units
curities by states........
36. Suspension of sales of *
trust's securities........
37. Revocation of authority to
distribute................
38. (a)Method of distribution.. Public Offering of Units;
(b)Underwriting agreements. General Information--Market for Units;
(c)Selling agreements...... Public Offering of Units; The Tax-Exempt
Portfolios--Underwriting
39. (a)Organization of princi-
pal underwriters..........
(b)N.A.S.D. membership of General Information--Administration
principal underwriters.... of the Trusts
40. Certain fees received by See Items 13(a) and 13(e)
principal underwriters....
41. (a)Business of principal General Information--Administration
underwriters.............. of the Trusts
(b)Branch offices of prin-
cipal underwriters........
(c)Salesmen of principal *
underwriters..............
42. Ownership of trust's secu-
rities by certain persons.
43. Certain brokerage commis-
sions received by princi-
pal underwriters.......... Public Offering of Units
44. (a)Method of valuation..... Public Offering of Units
(b)Schedule as to offering *
price.....................
(c)Variation in offering Public Offering of Units
price to certain persons..
45. Suspension of redemption General Information--Redemption
rights....................
46. (a)Redemption valuation.... General Information--Redemption;
General Information--Market for Units;
Public Offering of Units
(b)Schedule as to redemp- *
tion price................
General Information--Market for Units;
47. Maintenance of position in Public Offering of Units;
underlying securities..... General Information--Redemption
V. INFORMATION CONCERNING THE TRUSTEE
OR CUSTODIAN
48. Organization and regulation General Information--Administration
of trustee................ of the Trusts
49. Fees and expenses of trust-
ee........................
50. Trustee's lien............. General Information--Expenses of the Trusts
</TABLE>
- --------
* Inapplicable, answer negative or not required.
iii
<PAGE>
<TABLE>
<CAPTION>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
----------- ---------------------
VI. INFORMATION CONCERNING INSURANCE OF
HOLDERS OF SECURITIES
<C> <S> <C>
51. Insurance of holders of trust's Cover Page; General Information--
securities.................. Expenses of the Trusts; The Tax-Exempt
Portfolios--Insurance on the Bonds
VII. POLICY OF REGISTRANT
52. (a) Provisions of trust agreement The Trust Funds; General Information--
with respect to selection or Trust Information; General
elimination of underlying se- Information--Investment Supervision
curities.....................
(b) Transactions involving elimi-
nation of underlying securi-
ties......................... *
(c) Policy regarding substitution
or elimination of underlying General Information--Investment
securities................... Supervision; General Information--
Trust Information
(d) Fundamental policy not other-
wise covered................. *
Essential Information; General
53. Tax status of Trust.............. Information--Trust Information;
The GNMA Portfolios--Federal Tax
Status; The Tax-Exempt Portfolios--
Federal Tax Status
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. Trust's securities during last
ten years........................
55.
56. Certain information regarding pe-
riodic payment certificates..... *
57.
58.
59. Financial statements (Instruction
1(c) to Form S-6)............... *
</TABLE>
- --------
* Inapplicable, answer negative or not required.
iv
<PAGE>
EVEREN UNIT INVESTMENT TRUSTS, SERIES 51
GNMA Portfolio Series 6 and GNMA Portfolio Series 7 (each a "GNMA Portfolio")
were formed for the purpose of obtaining safety of capital and current monthly
distributions of interest and principal through investment in a portfolio
primarily consisting of mortgage-backed securities of the modified pass-
through type. All payments of principal and interest on the mortgage-backed
securities are fully guaranteed by the Government National Mortgage
Association ("GNMA"). The full faith and credit of the United States is
pledged to the payment of the Securities in each series of the GNMA Portfolios
but the Units themselves are not backed by such full faith and credit. The
value of the Units, the estimated current return and the estimated long-term
return to new purchasers will fluctuate with the value of the portfolio which
will generally decrease or increase inversely with changes in interest rates.
Units of the GNMA Portfolios are particularly well suited for purchase by
Individual Retirement Accounts, Keogh Plans, pension funds and other tax
deferred retirement plans. Minimum purchase for each Trust: $1,000 ($250 for
IRAs).
Insured National Series 20 (the "Insured National Trust," a "Tax-Exempt
Portfolio" or an "Insured Trust") was formed for the purpose of gaining
interest income exempt from Federal income taxes while conserving capital and
diversifying risks by investing in an insured, fixed portfolio consisting of
obligations issued by or on behalf of states of the United States or counties,
municipalities, authorities or political subdivisions thereof.
Insured Michigan Series 15 (the "Insured State Trust," "Tax-Exempt Portfolio"
or "Insured Trust") was formed for the purpose of gaining interest income free
from Federal income taxes and State and local income taxes and/or property
taxes while conserving capital and diversifying risks by investing in an
insured, fixed portfolio consisting of obligations issued by or on behalf of
the State for which such Trust Fund is named or counties, municipalities,
authorities or political subdivisions thereof.
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 a Trust does
not mean that the Units of the Trust are insured by any governmental or
private organization. The Units are not insured.
Insurance guaranteeing the scheduled payment of principal and interest on all
of the Bonds in the portfolio of each Insured Trust (other than any U.S.
Treasury Obligations) has been obtained directly by the issuer or the Sponsor
from MBIA Insurance Corporation or other insurers. See "Insurance on the
Bonds" for each Insured Trust. Insurance obtained by a Bond issuer is
effective so long as such Bonds are outstanding. THE INSURANCE DOES NOT RELATE
TO THE UNITS OF THE INSURED TRUSTS OFFERED HEREBY OR TO THEIR MARKET VALUE. As
a result of such insurance, the Units of the Insured Trusts have received a
rating of "AAA" by Standard & Poor's, a division of The McGraw-Hill Companies,
("Standard & Poor's"). See "Insurance on the Bonds" for each Insured Trust. No
representation is made as to any insurer's ability to meet its commitments.
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.
The investor is advised to read and retain this Prospectus for future
reference.
THE DATE OF THIS PROSPECTUS IS JULY 23, 1996.
<PAGE>
SUMMARY
PUBLIC OFFERING PRICE. The Public Offering Price per Unit of a Trust Fund
during the initial offering period is equal to a pro rata share of the
offering prices of the Securities in such Trust Fund plus or minus a pro rata
share of cash, if any, in the Principal Account held or owned by such Trust
Fund, plus accrued interest plus that sales charge indicated under "Essential
Information." The secondary market Public Offering Price per Unit will be
based upon a pro rata share of the bid prices of the Securities in each Trust
Fund plus or minus a pro rata share of cash, if any, in the Principal Account
held or owned by such Trust Fund, plus accrued interest plus the applicable
sales charge indicated under "Public Offering of Units--Public Offering
Price." The sales charge is reduced on a graduated scale for sales involving
at least $100,000 or 10,000 Units and will be applied on whichever basis is
more favorable to the investor. The minimum purchase for each Trust is $1,000.
INTEREST AND PRINCIPAL DISTRIBUTIONS. Distributions of the estimated annual
interest income to be received by each Trust Fund, after deduction of
estimated expenses, will be made monthly. See "Essential Information."
Distributions of funds, if any, in the Principal Account will be made as
provided in "General Information--Unitholders--Distributions to Unitholders."
REINVESTMENT. Each Unitholder of a Trust Fund offered herein may elect to have
distributions of principal or interest or both automatically invested without
charge in shares of certain mutual funds sponsored by Zurich Kemper
Investments, Inc. See "General Information--Distribution Reinvestment."
ESTIMATED LONG-TERM RETURN AND ESTIMATED CURRENT RETURN. As of the opening of
business on the Initial Date of Deposit, the Estimated Long-Term Return and
the Estimated Current Return, if applicable, for each Trust were as set forth
in "Essential Information." The Estimated Current Return is calculated by
dividing the estimated net annual interest income per Unit by the Public
Offering Price. The estimated net annual interest income per Unit will vary
with changes in fees and expenses of the Trustee, the Sponsor and Evaluator
and with the principal prepayment, redemption, maturity and exchange or sale
of Securities while the Public Offering Price will vary with changes in the
offering price of the underlying Securities and with changes in the accrued
interest; therefore, there is no assurance that the present Estimated Current
Return will be realized in the future. Estimated Long-Term Return is
calculated using a formula which (1) takes into consideration, and determines
and factors in the relative weightings of, the market values, yields (which
takes into account the amortization of premiums and the accretion of
discounts) and estimated retirements or average lives of all of the Securities
in the applicable Trust and (2) takes into account the expenses and sales
charge associated with each Trust Unit. Since the market values and estimated
retirements or average lives of the Securities and the expenses of a Trust
will change, there is no assurance that the present Estimated Long-Term Return
will be realized in the future. 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. After the initial offering period, while under no obligation
to do so, the Sponsor intends to, and certain Underwriters may, maintain a
market for the Units and to offer to repurchase such Units at prices subject
to change at any time which are based on the aggregate bid side evaluation of
the Securities in a Trust plus accrued interest.
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
security when due, volatile interest rates, early call provisions, and changes
to the tax status of the Securities. See "The GNMA Portfolios--Risk Factors"
and "The Tax-Exempt Portfolios--Risk Factors."
2
<PAGE>
EVEREN UNIT INVESTMENT TRUSTS, SERIES 51
ESSENTIAL INFORMATION
AS OF THE OPENING OF BUSINESS ON THE INITIAL DATE OF DEPOSIT
SPONSOR AND EVALUATOR: EVEREN UNIT INVESTMENT TRUSTS, A SERVICE OF
EVEREN SECURITIES, INC.
TRUSTEE: THE BANK OF NEW YORK
The income, expense and distribution data set forth below has been calculated
for Unitholders purchasing less than 10,000 Units of a Trust. Unitholders
purchasing 10,000 Units or more of a Trust will receive a slightly higher
return because of the reduced sales charge for larger purchases.
<TABLE>
<CAPTION>
GNMA GNMA INSURED INSURED
PORTFOLIO PORTFOLIO NATIONAL MICHIGAN
SERIES 6 SERIES 7 SERIES 20 SERIES 15
--------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
Public Offering Price per
Unit (1)(2)............... $ 10.102 $ 10.094 $ 10.093 $ 10.089
Principal Amount of Securi-
ties per Unit............. $ 10.000 $ 10.000 $ 10.000 $ 10.000
Estimated Current Return
based on Public Offering
Price (3)(4)(5)(6)........ 6.39% 7.01% 5.43% 5.33%
Estimated Long-Term Re-
turn (3)(4)(5)(6)......... 6.43% 7.19% 5.48% 5.39%
Estimated Normal Annual
Distribution per Unit (6). -- -- $ 0.54836 $ 0.53818
Principal Amount of Securi-
ties...................... $ 500,000 $ 500,000 $ 4,100,000 $ 2,540,000
Number of Units............ 50,000 50,000 410,000 254,000
Fractional Undivided Inter-
est per Unit.............. 1/50,000 1/50,000 1/410,000 1/254,000
Calculation of Public Of-
fering Price:
Aggregate Offering Price
of Securities............ $ 487,384 $ 484,729 $ 3,935,345 $ 2,437,188
Aggregate Offering Price
of Securities per Unit... $ 9.748 $ 9.695 $ 9.598 $ 9.595
Plus Sales Charge per
Unit (7)................. $ 0.354 $ 0.399 $ 0.495 $ 0.494
Public Offering Price per
Unit (1)(2).............. $ 10.102 $ 10.094 $ 10.093 $ 10.089
Redemption Price per Unit.. $ 9.698 $ 9.645 $ 9.538 $ 9.535
Sponsor's Initial Repur-
chase Price per Unit...... $ 9.748 $ 9.695 $ 9.598 $ 9.595
Excess of Public Offering
Price per Unit over Re-
demption Price per Unit... $ 0.404 $ 0.449 $ 0.555 $ 0.554
Excess of Public Offering
Price per Unit over Spon-
sor's Initial Repurchase
Price per Unit............ $ 0.354 $ 0.399 $ 0.495 $ 0.494
Calculation of Estimated
Net Annual Interest Income
per Unit (6):
Estimated Annual Interest
Income................... 6.625% 7.250% $ 0.57012 $ 0.56122
Less: Estimated Annual Ex-
pense.................... 0.170% 0.170% $ 0.02176 $ 0.02304
--------- ---------- ------------ ------------
Estimated Net Annual In-
terest Income............ 6.455% 7.080% $ 0.54836 $ 0.53818
Estimated Daily Rate of Net
Interest Accrual per Unit. -- -- $0.001523220 $0.001494940
Type of GNMA Securities.... Midget Long Term -- --
Estimated Average Life of
GNMA Securities........... 6.2 years 10.8 years -- --
Minimum Principal Value of
the Trust under which
Trust Agreement may be
terminated (8)............ 40% 40% $ 820,000 $ 508,000
</TABLE>
Evaluations for purposes of sale, purchase or redemption of Units are made as
of the close of business of the Sponsor (currently 3:15 p.m. Central Time)
next following receipt of an order for a sale or purchase of Units or receipt
by the Trustee of Units tendered for redemption.
3
<PAGE>
ESSENTIAL INFORMATION--(CONTINUED)
<TABLE>
<CAPTION>
INSURED
GNMA GNMA INSURED MICHIGAN
PORTFOLIO PORTFOLIO NATIONAL SERIES
SERIES 6 SERIES 7 SERIES 20 15
--------- --------- --------- --------
<S> <C> <C> <C> <C>
Trustee's Annual Fee per $1,000
principal amount of Securities (9).... $0.860 $0.860 $1.300 $1.280
Reduction of Trustee's fee per Unit
during the first year (6)............. N/A N/A $0.00539 $0.00292
Estimated annual interest income per
Unit during the first year (6)........ $0.56473 $0.55830
Interest Payments (10):
First Payment per Unit, representing 5
days................................. $0.00897 $0.00983 $0.00762 $0.00747
Estimated Normal Monthly Distribution
per Unit............................. $0.04570 $0.04485
Estimated Normal Annual Distribution
per Unit............................. $0.54836 $0.53818
Sales Charge (7):
As a percentage of Public Offering
Price per Unit....................... 3.500% 3.950% 4.900% 4.900%
As a percentage of net amount
invested............................. 3.632% 4.116% 5.157% 5.149%
As a percentage of net amount invested
in earning assets.................... 3.632% 4.116% 5.157% 5.149%
</TABLE>
<TABLE>
<C> <S> <C>
First Settlement Date.............. July 26, 1996
Mandatory Termination Date......... December 31, 2027
Evaluator's Annual Evaluation Fee-- Maximum of $0.175 per $1,000 Principal Amount of
GNMA Portfolios................... Securities
Evaluator's Annual Evaluation Fee--
Tax-Exempt Portfolios............. Maximum of $0.30 per $1,000 Principal Amount of Securities
Sponsor's Annual Surveillance Fee--
GNMA Portfolio.................... Maximum of $0.25 per $1,000 Principal Amount of Securities
Sponsor's Annual Surveillance Fee--
Tax-Exempt Portfolios............. Maximum of $0.002 per Unit
</TABLE>
- ---------------------
(1) Anyone ordering Units for settlement after the First Settlement Date will
pay accrued interest from such date to the date of settlement (normally
three business days after order) less distributions from the Interest
Account subsequent to the First Settlement Date. For purchases settling on
the First Settlement Date, no accrued interest will be added to the Public
Offering Price.
(2) Many unit investment trusts issue a number of units such that each unit
represents approximately $1,000 principal amount of underlying securities.
The Sponsor, on the other hand, in determining the number of Units for
each Trust has elected not to follow this format but rather to provide
that number of Units which will establish as close as possible as of the
Initial Date of Deposit a Principal Amount of Securities per Unit of $10.
(3) The Estimated Current Return and Estimated Long-Term Return are increased
for transactions entitled to a reduced sales charge. See "Public Offering
of Units--Public Offering Price."
(4) The Estimated Current Returns are calculated by dividing the estimated net
annual interest income per Unit by the Public Offering Price. The
estimated net annual interest income per Unit will vary with changes in
fees and expenses of the Trustee, the Sponsor and the Evaluator and with
the principal prepayment, redemption, maturity, exchange or sale of
Securities while the Public Offering Price will vary with changes in the
offering price of the underlying Securities and with changes in the
accrued interest; therefore, there is no assurance that the present
Estimated Current Returns indicated above will be realized in the future.
The Estimated Long-Term Returns are calculated using a formula which (1)
takes into consideration, and determines and factors in the relative
weightings of, the market values, yields (which takes into account the
amortization of premiums and the accretion of discounts) and estimated
retirement dates of all of the Securities in the applicable 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
Securities and expenses of each Trust will change, there is no assurance
that the present Estimated Long-Term Returns as indicated above will be
realized in the future. The Estimated Current Returns and Estimated Long-
Term Returns are expected to differ because the calculation of the
Estimated Long-Term Returns reflects the estimated date and amount of
principal returned while the Estimated Current Return calculations include
only net annual interest income and Public Offering Price.
(5) This figure is based on estimated per Unit cash flows. Estimated cash
flows will vary with changes in fees and expenses, with changes in current
interest rates and with the principal prepayment, redemption, maturity,
call, exchange or sale of the underlying Securities. The estimated cash
flows to Unitholders for the Trusts are either set forth under "Estimated
Cash Flows to Unitholders" for each Trust or are available upon request at
no charge from the Sponsor.
4
<PAGE>
(6) Estimated annual interest amounts, which are expressed in dollar amounts
for the Tax-Exempt Portfolios, are expressed as percentages for the GNMA
Portfolios due to the prepayment risk associated with GNMA Securities.
During the first year, the Trustee has agreed to reduce its fee (and to
the extent necessary pay expenses of the Trust Funds) in the amounts
stated above. The Trustee has agreed to the foregoing to cover all or a
portion of the interest on any Securities accruing prior to their expected
dates of delivery, since interest will not accrue to the benefit of
Unitholders of a Trust Fund until such Securities are actually delivered
to the Trust Fund. The estimated net annual interest income per Unit will
remain as indicated. See "The Trust Funds" and "General Information--
Interest, Estimated Long-Term Return and Estimated Current Return."
(7) The sales charge as a percentage of the net amount invested in earning
assets will increase as accrued interest increases. Transactions subject
to quantity discounts (see "Public Offering of Units--Public Offering
Price") will have reduced sales charges, thereby reducing all percentages
in the table.
(8) The minimum principal value of each Trust (other than a Tax-Exempt
Portfolio) under which the Trust Agreement may be terminated is 40% of the
total aggregate principal amount of securities deposited in each such
Trust during the primary offering period. The minimum principal value of
each Tax-Exempt Portfolio under which the Trust Agreement may be
terminated is 20% of the initial aggregate principal amount of securities
deposited in such Trust.
(9) See "General Information--Expenses of the Trusts."
(10) Unitholders will receive interest distributions monthly. The Record Date
is the first day of the month, commencing August 1, 1996, and the
distribution date is the fifteenth day of the month, commencing August
15, 1996.
5
<PAGE>
THE TRUST FUNDS
EVEREN Unit Investment Trusts, Series 51 includes the following separate unit
investment trusts created by the Sponsor under the name EVEREN Unit Investment
Trusts: "GNMA Portfolio Series 6," "GNMA Portfolio Series 7," "Insured
National Series 20" and "Insured Michigan Series 15" (collectively, the
"Trusts" or "Trust Funds"). Each of the Trust Funds is separate and is
designated by a different series number. Each of the Trust Funds was created
under the laws of the State of New York pursuant to a trust indenture dated
the Initial Date of Deposit (the "Trust Agreements") between EVEREN Unit
Investment Trusts, a service of EVEREN Securities, Inc. (the "Sponsor") and
The Bank of New York (the "Trustee").*
The GNMA Portfolios were formed for the purpose of obtaining safety of capital
and currently monthly distributions of interest and principal through
investment in a portfolio primarily consisting of mortgage-backed securities
of the modified pass-through type on which all payments of principal and
interest are fully guaranteed by the GNMA. The full faith and credit of the
United States is pledged to the payment of the Securities in each GNMA
Portfolio but the Units themselves are not backed by such full faith and
credit.
The Insured National Trust was formed for the purpose of gaining interest
income exempt from Federal income taxes while conserving capital and
diversifying risks by investing in an insured, fixed portfolio consisting of
obligations issued by or on behalf of states of the United States or counties,
municipalities, authorities or political subdivisions thereof.
The Insured State Trust was formed for the purpose of gaining interest income
free from Federal income taxes and State and local income and/or property
taxes while conserving capital and diversifying risks by investing in an
insured, fixed portfolio consisting of obligations issued by or on behalf of
the State for which such Trust Fund is named or counties, municipalities,
authorities or political subdivisions thereof.
There is, of course, no guarantee that the Trust Funds' objectives will be
achieved. Offerees in the states of Illinois, Indiana, Virginia and Washington
may purchase Units of the GNMA Portfolios and the Insured National Trust only.
As used herein, the terms "Securities" and "Bonds" mean the obligations
initially deposited in the Trusts described under "Portfolio" for each Trust
(including all contracts to purchase such obligations accompanied by an
irrevocable letter of credit sufficient to perform such contracts initially
deposited in the Trusts) and any additional obligations deposited in the
Trusts following the Initial Date of Deposit. As used herein, the terms
"Municipal Bonds" and "Municipal Obligations" mean the obligations (and
contracts for the purchase thereof) included in the Tax-Exempt Portfolios. As
used herein, the term "Portfolio Obligations" means the obligations (and
contracts for the purchase thereof) included in the GNMA Portfolios.
On the Initial Date of Deposit, the Sponsor delivered to the Trustee that
aggregate principal amount of Securities or contracts for the purchase thereof
for deposit in the Trust Funds as set forth under "Essential Information." Of
such principal amount, the amount specified in "Essential Information" was
deposited in each Trust. In exchange for the Securities so deposited, the
Trustee delivered to the Sponsor documentation evidencing the ownership of
that number of Units for each Trust as indicated under "Essential
Information." Each Trust initially consists of delivery statements (i.e.,
contracts) to purchase obligations. The Sponsor has a limited right of
substitution for such Securities in the event of a failed contract. See
"General Information--Trust Information."
- ---------------------
* Reference is made to the Trust Agreements, and any statements contained
herein are qualified in their entirety by the provisions of the Trust
Agreements.
6
<PAGE>
Additional Units of each Trust may be issued from time to time following the
Initial Date of Deposit by depositing in the Trust additional Securities or
contracts to purchase thereof together with irrevocable letters of credit or
cash. As additional Units are issued by a Trust as a result of the deposit of
additional Securities by the Sponsor, the aggregate value of the Securities in
the Trust will be increased and the fractional undivided interest in the Trust
represented by each Unit will be decreased. The Sponsor may continue to make
additional deposits of Securities into a Trust following the Initial Date of
Deposit, provided that such additional deposits will be in principal amounts
which will maintain the same original percentage relationship among the
principal amounts of the Securities in such Trust established by the initial
deposit of the Securities. Thus, although additional Units will be issued,
each Unit will continue to represent the same principal amount of each
Security, and the percentage relationship among the principal amount of each
Security in the related Trust will remain the same.
Each Unit initially offered represents that undivided interest in the
appropriate Trust indicated under "Essential Information." To the extent that
any Units are redeemed by the Trustee or additional Units are issued as a
result of additional Securities being deposited by the Sponsor, the fractional
undivided interest in a Trust represented by each unredeemed Unit will
increase or decrease accordingly, although the actual interest in such Trust
represented by such fraction will remain unchanged. Units will remain
outstanding until redeemed upon tender to the Trustee by Unitholders, which
may include the Sponsor, or until the termination of the Trust Agreement.
An investment in Units of a Trust Fund 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
Securities 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 long-term obligations in particular. The Sponsor
cannot predict the degree to which such fluctuations will continue in the
future.
7
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
UNITHOLDERS
EVEREN UNIT INVESTMENT TRUSTS, SERIES 51
We have audited the accompanying statements of condition and the related
portfolios of EVEREN Unit Investment Trusts, Series 51 as of July 23, 1996.
The statements of condition and portfolios are the responsibility of the
Sponsor. Our responsibility is to express an opinion on such financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of Securities owned at July 23, 1996 and a
letter of credit deposited to purchase Securities by correspondence with the
Trustee. An audit also includes assessing the accounting principles used and
significant estimates made by the Sponsor, as well as evaluating the overall
financial statement presentation. We believe our audit provides a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of EVEREN Unit Investment
Trusts, Series 51 as of July 23, 1996, in conformity with generally accepted
accounting principles.
GRANT THORNTON LLP
Chicago, Illinois
July 23, 1996
8
<PAGE>
EVEREN UNIT INVESTMENT TRUSTS, SERIES 51
STATEMENTS OF CONDITION AT THE OPENING OF BUSINESS ON JULY 23, 1996, THE
INITIAL DATE OF DEPOSIT
<TABLE>
<CAPTION>
GNMA GNMA INSURED INSURED
PORTFOLIO PORTFOLIO NATIONAL MICHIGAN
SERIES 6 SERIES 7 SERIES 20 SERIES 15
--------- --------- ---------- ----------
<S> <C> <C> <C> <C>
INVESTMENT IN SECURITIES
Securities deposited in the Trusts
(1)(2).............................. $ -- $ -- $ -- $ --
Contracts to purchase Securities
(1)(2).............................. 487,384 484,729 3,935,345 2,437,188
Accrued interest to First Settlement
Date on Securities (1)(3)........... 1,748 1,913 26,514 32,011
-------- -------- ---------- ----------
Total............................... $489,132 $486,642 $3,961,859 $2,469,199
======== ======== ========== ==========
Number of Units...................... 50,000 50,000 410,000 254,000
LIABILITY AND INTEREST OF UNITHOLDERS
Liability--
Accrued interest payable to Sponsor
(1)(3)............................. $ 1,748 $ 1,913 $ 26,514 $ 32,011
Interest of Unitholders--
Cost to investors (4)............... 505,100 504,700 4,138,130 2,562,606
Less: Gross underwriting commission
(4)................................ 17,716 19,971 202,785 125,418
-------- -------- ---------- ----------
Net interest to Unitholders
(1)(3)(4).......................... 487,384 484,729 3,935,345 2,437,188
-------- -------- ---------- ----------
Total............................. $489,132 $486,642 $3,961,859 $2,469,199
======== ======== ========== ==========
</TABLE>
- --------
NOTES:
(1) The aggregate value of the Securities listed in each "Portfolio" and their
cost to the Trust are the same. The value of the Securities is determined
by Cantor Fitzgerald & Co. on the bases set forth under "Public Offering
of Units--Public Offering Price". The contracts to purchase Securities are
collateralized by an irrevocable letter of credit of $7,409,782 which has
been deposited with the Trustee. Of this amount, $7,344,646 relates to the
offering price of Securities to be purchased and $65,136 relates to
accrued interest on such Securities to the expected dates of delivery.
(2) Insurance coverage providing for the timely payment of principal and
interest on the Securities in an Insured Trust has been obtained directly
by the issuer of such Securities or by the Sponsor from MBIA Insurance
Corporation or other insurers.
(3) The Trustee will advance to each Trust the amount of net interest accrued
to the First Settlement Date for distribution to the Sponsor as the
Unitholder of Record.
(4) The aggregate public offering price includes a sales charge for the Trust
as set forth under "Essential Information", assuming all single
transactions involve less than 10,000 Units. For single transactions
involving 10,000 or more Units the sales charge is reduced (see "Public
Offering of Units--Public Offering Price") resulting in an equal reduction
in both the Cost to investors and the Gross underwriting commission while
the Net interest to Unitholders remains unchanged.
9
<PAGE>
PUBLIC OFFERING OF UNITS
PUBLIC OFFERING PRICE. Units of a Trust are offered at the Public Offering
Price thereof. During the initial offering period, the Public Offering Price
per Unit is equal to the aggregate of the offering side evaluations of the
Securities in such Trust (as determined, pursuant to the terms of a contract
with the Evaluator, by Cantor Fitzgerald & Co., a non-affiliated firm
regularly engaged in the business of evaluating, quoting or appraising
comparable securities), plus or minus a pro rata share of cash, if any, in the
Principal account held or owned by such Trust plus accrued interest plus the
applicable sales charge referred to in the tables below divided by the number
of outstanding Units of such Trust. The Public Offering Price for secondary
market transactions, on the other hand, is based on the aggregate bid side
evaluations of the Securities in a Trust (also, currently, as determined by
Cantor Fitzgerald & Co.), plus or minus cash, if any, in the Principal Account
held or owned by such Trust, plus accrued interest plus a sales charge based
upon the dollar weighted average maturity of such Trust.
For the GNMA Portfolios, the sales charge per Unit will be reduced pursuant to
the following graduated scale:
<TABLE>
<CAPTION>
MIDGET TRUST LONG-TERM TRUST
--------------------- ---------------------
PERCENT OF PERCENT OF PERCENT OF PERCENT OF
OFFERING NET AMOUNT OFFERING NET AMOUNT
TICKET SIZE* PRICE INVESTED PRICE INVESTED
- ------------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Less than $100,000.................. 3.50% 3.627% 3.95% 4.112%
$100,000 to $249,999................ 3.25 3.359 3.70 3.842
$250,000 to $499,999................ 2.85 2.934 3.35 3.466
$500,000 to $999,999**.............. 2.60 2.669 3.10 3.199
</TABLE>
- --------
*The breakpoint sales charges are also applied on a Unit basis utilizing a
breakpoint equivalent in the above table of $10 per Unit and will be applied
on whichever basis is more favorable to the investor.
**For any transactions in excess of these amounts, contact the Sponsor for the
applicable sales charge.
For the Tax-Exempt Portfolios, the sales charge per Unit will be reduced
during the initial offering period pursuant to the following graduated scale:
<TABLE>
<CAPTION>
WEIGHTED AVERAGE YEARS TO MATURITY
---------------------------------------------------------------------------------------
0 TO 7.49 7.5 TO 9.99 10 TO 14.99 15 OR MORE
--------------------- --------------------- --------------------- ---------------------
PERCENT OF PERCENT OF PERCENT OF PERCENT OF PERCENT OF PERCENT OF PERCENT OF PERCENT OF
OFFERING NET AMOUNT OFFERING NET AMOUNT OFFERING NET AMOUNT OFFERING NET AMOUNT
NUMBER OF UNITS PRICE INVESTED PRICE INVESTED PRICE INVESTED PRICE INVESTED
- --------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 to 9,999 Units........ 3.0% 3.093% 3.9% 4.058% 4.2% 4.384% 4.9% 5.152%
10,000 to 24,999 Units.. 2.8 2.881 3.7 3.842 4.0 4.167 4.5 4.712
25,000 to 49,999 Units.. 2.6 2.669 3.5 3.627 3.8 3.950 4.3 4.493
50,000 to 99,999 Units.. 2.5 2.564 3.3 3.413 3.5 3.627 3.5 3.627
100,000 or more Units... 2.0 2.041 2.7 2.775 2.8 2.881 3.0 3.093
</TABLE>
As indicated above, in connection with secondary market transactions the sales
charge is based upon the dollar weighted average maturity of a Trust and is
determined in accordance with the tables set forth below. For purposes of this
computation, Securities will be deemed to mature on their expressed maturity
dates unless: (a) the Securities 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 Securities 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
10
<PAGE>
the dollar weighted average maturity of such Trust's portfolio, in accordance
with the following schedules.
For the Tax-Exempt Portfolios, in connection with secondary market
transactions the sales charge per Unit will be reduced as set forth below:
<TABLE>
<CAPTION>
SECONDARY
---------------------------------------
YEARS TO MATURITY*
4 TO 7.99 8 TO 14.99 15 OR MORE
--------- ------------------ ----------
SALES CHARGE (% OF PUBLIC OFFERING
AMOUNT OF INVESTMENT PRICE)
-------------------- ---------------------------------------
<S> <C> <C> <C>
$1,000 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 the Trust Fund is from 1 to 3.99
years the sales charge is 2% and 1.5% of the Public Offering Price for
purchases of $1,000 to $249,999 and $250,000 or more, respectively.
The reduced sales charges resulting from quantity discounts as shown on the
tables above will apply to all purchases of Units on any one day by the same
purchaser from the same Underwriter or dealer and for this purpose purchases
of Units of a Trust Fund 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 charges will also be applicable to a trust or other
fiduciary purchasing for a single trust estate or single fiduciary account.
Units may be purchased in the primary or secondary market at the Public
Offering Price less the concession the Sponsor typically allows to dealers and
other selling agents for purchases (see "Public Distribution of Units") by
investors who purchase Units through registered investment advisers, certified
financial planners or registered broker-dealers who in each case either charge
periodic fees for financial planning, investment advisory or asset management
services, or provide such services in connection with the establishment of an
investment account for which a comprehensive "wrap fee" charge is imposed.
For purposes of calculating the applicable sales charge, purchasers who have
indicated their intent to purchase a specified amount of Units of any EVEREN
Unit Investment Trusts which provides for binding Letter of Intent purchases
in the primary offering period by executing and delivering a letter of intent
to the Sponsor, which letter of intent must be in a form acceptable to the
Sponsor and shall have a maximum duration of thirteen months, will be eligible
to receive a reduced sales charge according to the sales charge tables as set
forth in the applicable prospectus based on the amount of intended aggregate
purchases as expressed in the letter of intent. By establishing a letter of
intent, a Unitholder agrees that the first purchase of Units following the
execution of such letter of intent will be at least 5% of the total amount of
the intended aggregate purchases expressed in such Unitholder's letter of
intent. Further, through the establishment of the letter of intent, such
Unitholder agrees that Units representing 5% of the total amount of the
intended purchases will be held in escrow by the Trustee pending completion of
these purchases. All distributions on Units held in escrow will be credited to
such Unitholder's account. If total purchases prior to the expiration of the
letter of intent period equal or exceed the amount specified in a
11
<PAGE>
Unitholder's letter of intent, the Units held in escrow will be transferred to
such Unitholder's account. If the total purchases are less than the amount
specified, the Unitholder involved must pay the Sponsor an amount equal to the
difference between the amounts paid for these purchases and the amounts which
would have been paid if the higher sales charge had been applied. If such
Unitholder does not pay the additional amount within 20 days after written
request by the Sponsor or the Unitholder's securities representative, the
Sponsor will instruct the Trustee to redeem an appropriate number of the
escrowed Units to meet the required payment. By establishing a letter of
intent, a Unitholder irrevocably appoints the Sponsor as attorney to give
instructions to redeem any or all of such Unitholder's escrowed Units, with
full power of substitution in the premises. A Unitholder or his securities
representative must notify the Sponsor whenever such Unitholder makes a
purchase of Units that he wishes to be counted towards the intended amount.
As an alternative to the binding letter of intent described above, a purchaser
desiring to purchase during a 13 month period $500,000 or more of any
combination of series of EVEREN Unit Investment Trusts may qualify for a
reduced sales charge by signing a nonbinding Letter of Intent with any single
broker dealer. After signing a Letter of Intent, at the date total purchases,
less redemptions, of units of any combination of series of EVEREN Unit
Investment Trusts by a purchaser (including units purchased in the name of the
spouse of a purchaser or in the name of a child of such purchaser under 21
years of age) exceed $500,000, the selling broker/dealer, bank or other will
credit the unitholder with cash as a retroactive reduction of the sales charge
on such units equal to the amount which would have been paid for the total
aggregated sale amount. If a purchaser does not complete the required
purchases under the Letter of Intent within the 13 month period, no such
retroactive sales charge reduction shall be made. To qualify as a purchase
under a Letter of Intent each purchase of units of EVEREN Unit Investment
Trusts must equal or exceed $100,000.
Unitholders of the various series of EVEREN Unit Investment Trusts, Insured
Corporate Series who meet the conditions in the next succeeding sentence may,
during the primary offering period of a High Yield Corporate Income Series or
Investment Grade Corporate Income Series only, acquire Units of such High
Yield Corporate Income Series or Investment Grade Corporate Income Series at
the reduced sales charge equivalent to purchases during the initial offering
period of 100,000 or more Units. First, the special sales charge discount only
applies to purchases acquired with funds received from distributions of
unscheduled principal payments in connection with units issued in such series
and, second, the minimum purchase must be at least $1,000.
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 a Trust without a sales charge, although
a transaction processing fee may be imposed on such trades.
Had Units of a Trust been available for sale at the opening of business on the
Initial Date of Deposit, the Public Offering Price would have been as shown
under "Essential Information." The Public Offering Price per Unit of a Trust
on the date of this Prospectus or on any subsequent date will vary from the
amount stated under "Essential Information" in accordance with fluctuations in
the prices of the underlying Securities and the amount of accrued interest on
the Units. On the Initial Date of Deposit, pursuant to an exemptive order from
the Securities and Exchange Commission, the Public Offering Price at which
Units will be sold will not exceed the price determined as of the opening of
business on the Initial Date of Deposit as shown under "Essential
Information"; however, should the value of the underlying Securities decline,
purchasers will, of course, be given the benefit of such lower price. The
aggregate bid and offering side evaluations of the Securities shall be
determined (a) on the basis of current bid or offering
12
<PAGE>
prices of the Securities, (b) if bid or offering prices are not available for
any particular Security, on the basis of current bid or offering prices for
comparable bonds, (c) by determining the value of Securities on the bid or
offer side of the market by appraisal, or (d) by any combination of the above.
The foregoing evaluations and computations shall be made as of the evaluation
time stated under "Essential Information," on each business day commencing
with the Initial Date of Deposit of the Securities, effective for all sales
made during the preceding 24-hour period.
The interest on the Securities deposited in a Trust, less the related
estimated fees and expenses, is estimated to accrue in the annual amounts per
Unit set forth under "Essential Information." The amount of net interest
income which accrues per Unit may change as Securities mature or are redeemed,
exchanged or sold, or as the expenses of a Trust change or the number of
outstanding Units of a Trust changes.
Although payment is normally made three business days following the order for
purchase, payments may be made prior thereto. A person will become the owner
of Units on the date of settlement provided payment has been received. Cash,
if any, made available to the Sponsor prior to the date of settlement for the
purchase of Units may be used on the Sponsor's business and may be deemed to
be a benefit to the Sponsor, subject to the limitations of the Securities
Exchange Act of 1934. If a Unitholder desires to have certificates
representing Units purchased, such certificates will be delivered as soon as
possible following his written request therefor. For information with respect
to redemption of Units purchased, but as to which certificates requested have
not been received, see "General Information--Redemption" below.
ACCRUED INTEREST. Accrued interest is the accumulation of unpaid interest on a
security from the last day on which interest thereon was paid. Interest on
Securities generally is paid semi-annually (monthly in the case of Ginnie
Maes, if any) although a Trust accrues such interest daily. Because of this, a
Trust always has an amount of interest earned but not yet collected by the
Trustee. For this reason, with respect to sales settling subsequent to the
First Settlement Date, the Public Offering Price of Units will have added to
it the proportionate share of accrued interest to the date of settlement.
Unitholders will receive on the next distribution date of a Trust the amount,
if any, of accrued interest paid on their Units.
In an effort to reduce the amount of accrued interest which would otherwise
have to be paid in addition to the Public Offering Price in the sale of Units
to the public, the Trustee will advance the amount of accrued interest as of
the First Settlement Date and the same will be distributed to the Sponsor as
the Unitholder of record as of the First Settlement Date. Consequently, the
amount of accrued interest to be added to the Public Offering Price of Units
will include only accrued interest from the First Settlement Date to the date
of settlement, less any distributions from the Interest Account subsequent to
the First Settlement Date.
Because of the varying interest payment dates of the Securities, accrued
interest at any point in time will be greater than the amount of interest
actually received by the Trusts and distributed to Unitholders. Therefore,
there will always remain an item of accrued interest that is added to the
value of the Units. If a Unitholder sells or redeems all or a portion of his
Units, he will be entitled to receive his proportionate share of the accrued
interest from the purchaser of his Units. Since the Trustee has the use of the
funds held in the Interest Account for distributions to Unitholders and since
such Account is non-interest-bearing to Unitholders, the Trustee benefits
thereby.
13
<PAGE>
COMPARISON OF PUBLIC OFFERING PRICE AND REDEMPTION PRICE. While the Initial
Public Offering Price of Units will be determined on the basis of the current
offering prices of the Securities in a Trust, the redemption price per Unit
(as well as the secondary market price per Unit) at which Units may be
redeemed (see "General Information--Redemption") will be determined on the
basis of the current bid prices of the Securities. As of the opening of
business on the Initial Date of Deposit, the Public Offering Price per Unit
(based on the offering prices of the Securities in a Trust and including the
sales charge) exceeded the redemption price at which Units could have been
redeemed (based upon the current bid prices of the Securities in a Trust) by
the amount shown under "Essential Information." Under current market
conditions the bid prices for U.S. Treasury Obligations are expected to be
approximately 1/8 to 1/4 of 1% lower than the offer price of such obligations.
In the past, bid prices on securities similar to those in the Trust Funds have
been lower than the offering prices thereof by as much as 5% or more of
principal amount in the case of inactively traded bonds or as little as 1/2 of
1% in the case of actively traded bonds, but the difference between such
offering and bid prices may be expected to average 3% to 4% of principal
amount. For this reason, among others (including fluctuations in the market
prices of the Securities and the fact that the Public Offering Price includes
a sales charge), the amount realized by a Unitholder upon any redemption of
Units may be less than the price paid for such Units.
PUBLIC DISTRIBUTION OF UNITS. The Sponsor intends to qualify the Units for
sale in a number of states (except for an Insured State Trust or uninsured
State Trust which will be qualified for sale only in the state for which such
Trust is named). 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 below. Certain commercial banks are making
Units of the Trust Funds 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 amount shown in the tables below. Under the Glass-Steagall
Act, banks are prohibited from underwriting Trust Fund 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. The Sponsor reserves the right to change the discounts set forth
below from time to time. 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 a Trust
and other unit investment trusts created by the Sponsor. The difference
between the discount and the sales charge will be retained by the Sponsor. For
Tax-Exempt Portfolios only, any dealer who sells at least those amounts of
Units set forth under "The Tax-Exempt Portfolios--Underwriting" on the Initial
Date of Deposit will be entitled to a concession or agency commission equal to
the corresponding takedown set forth in that section for all Units sold during
the initial offering period.
14
<PAGE>
For the GNMA portfolios, the primary and secondary market concessions or agency
commissions are as follows:
<TABLE>
<CAPTION>
MIDGET TRUSTS
-----------------------------------------------------------
SECONDARY
PRIMARY MARKET MARKET
------------------------------------------------- ---------
VOLUME DISCOUNTS**
--------------------------------------
FIRM SALES FIRM SALES FIRM SALES
REGULAR OR SALE OR SALE OR SALE
CONCESSION ARRANGEMENTS ARRANGEMENTS ARRANGEMENTS
OR AGENCY ($250,000 TO ($500,000 TO ($1,000,000
DOLLAR AMOUNT OF TRADE* COMMISSION $499,999) $999,999) OR MORE) ALL SALES
- ----------------------- ---------- ------------ ------------ ------------ ---------
<S> <C> <C> <C> <C> <C>
$0 to $99,999........... 2.10% 2.15% 2.20% 2.25% 2.10%
$100,000 to $249,999.... 2.00 2.05 2.10 2.20 2.10
$250,000 to $499,999.... 1.75 1.80 1.80 1.85 1.80
$500,000 to $999,999***. 1.50 1.55 1.55 1.60 1.55
</TABLE>
<TABLE>
<CAPTION>
LONG-TERM TRUSTS
-----------------------------------------------------------
SECONDARY
PRIMARY MARKET MARKET
------------------------------------------------- ---------
VOLUME DISCOUNTS**
--------------------------------------
FIRM SALES FIRM SALES FIRM SALES
REGULAR OR SALE OR SALE OR SALE
CONCESSION ARRANGEMENTS ARRANGEMENTS ARRANGEMENTS
OR AGENCY ($250,000 TO ($500,000 TO ($1,000,000
DOLLAR AMOUNT OF TRADE* COMMISSION $499,999) $999,999) OR MORE) ALL SALES
- ----------------------- ---------- ------------ ------------ ------------ ---------
<S> <C> <C> <C> <C> <C>
$0 to $99,999........... 2.50% 2.60% 2.65% 2.70% 2.60%
$100,000 to $249,999.... 2.50 2.55 2.60 2.65 2.60
$250,000 to $499,999.... 2.25 2.30 2.30 2.35 2.30
$500,000 to $999,999***. 2.00 2.05 2.05 2.10 2.05
</TABLE>
- --------
*The breakpoint discount are also applied on a Unit basis utilizing a
breakpoint equivalent in the above table of $1,000 per 100 Units.
**Volume discounts will be given to firms who reach cumulative firm sales or
sales arrangement levels of at least $250,000 during the initial one month
period after the Initial Date of Deposit. After a firm has met the minimum
$250,000 volume level, volume discounts will be given on all trades
originated from or by that firm, including those placed prior to reaching
the $250,000 level, and will continue to be given during the entire initial
offering period.
***For any transactions in excess of these amounts, contact the Sponsor for the
applicable rates.
For the Tax-Exempt Portfolios, the primary and secondary market concessions or
agency commissions are as follows:
<TABLE>
<CAPTION>
PRIMARY
--------------------------------------------
WEIGHTED AVERAGE YEARS TO MATURITY
0 TO 7.49 7.5 TO 9.99 10 TO 14.99 15 OR MORE
---------------------------------------
NUMBER OF UNITS DISCOUNT PER UNIT
- --------------- --------------------------------------------
<S> <C> <C> <C> <C>
1 to 9,999 Units................... $0.20 $0.27 $0.28 $0.32
10,000 to 24,999 Units............. $0.19 $0.25 $0.27 $0.32
25,000 to 49,999 Units............. $0.18 $0.23 $0.26 $0.32
50,000 to 99,999 Units............. $0.17 $0.22 $0.25 $0.25
100,000 or more Units.............. $0.11 $0.17 $0.18 $0.20
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
SECONDARY MARKET
-------------------------------
DOLLAR WEIGHT AVERAGE
YEARS TO MATURITY*
4 TO 7.99 8 TO 14.99 15 OR MORE
------------------------------------
DISCOUNT PER UNIT
(PERCENT OF PUBLIC OFFERING
DOLLAR AMOUNT OF TRADE 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 Fund is from 1 to 3.99
years, the concession or agency commission is 1.00% of the Public Offering
Price.
Notwithstanding anything to the contrary in the table above, for Insured
National Series 20 only the primary market concessions or agency commissions
are as follows: 1 to 9,999 Units--$0.35; 10,000 to 24,999 Units--$0.34; 25,000
to 49,999 Units--$0.33; 50,000 to 99,999 Units--$0.25; and 100,000 or more
Units--$0.20.
The Sponsor reserves the right to reject, in whole or in part, any order for
the purchase of Units.
PROFITS OF SPONSOR AND UNDERWRITERS. In connection with Trusts other than a
Tax-Exempt Portfolio, the Sponsor will receive gross sales charges equal to
the percentage of the Offering Price of the Units of such Trusts stated under
"Public Offering Price" and will pay a fixed portion of such sales charges to
dealers and agents. As set forth under "The Tax-Exempt Portfolios--
Underwriting," the Underwriters of each Tax-Exempt Portfolio will receive
gross sales charges equal to the percentage of the Public Offering Price of
the Units of such Trust Fund stated under "Public Offering Price" and the
Sponsor will receive a fixed portion of such sales charges. In addition, the
Sponsor may realize a profit or a loss resulting from the difference between
the purchase prices of the Securities to the Sponsor and the cost of such
Securities to a Trust Fund, which is based on the offering side evaluation of
the Securities. See "Portfolio" for each Trust. The Sponsor or Underwriters
may also realize profits or losses with respect to Securities deposited in a
Trust which were acquired from underwriting syndicates of which the Sponsor or
any Underwriter was a member. An underwriter or underwriting syndicate
purchases securities from the issuer on a negotiated or competitive bid basis,
as principal, with the motive of marketing such securities to investors at a
profit. The Sponsor and the Underwriters may realize additional profits or
losses during the initial offering period on unsold Units as a result of
changes in the daily evaluation of the Securities in a Trust.
16
<PAGE>
G
N
M
A
P
O
R
T
F
O
L
I
O
S
THE GNMA PORTFOLIOS
THE TRUST PORTFOLIO
The purpose and objective of GNMA Portfolio Series 6 and GNMA Portfolio Series
7 is to provide investors with an appropriate vehicle to obtain safety of
capital and monthly distributions of interest and principal through investment
in a fixed portfolio primarily consisting of Ginnie Maes backed by the full
faith and credit of the United States.
In selecting Securities for deposit in the GNMA Portfolios, the following
factors, among others, were considered by the Sponsor: (i) the types of such
obligations available; (ii) the prices and yields of such obligations relative
to other comparable obligations, including the extent to which such
obligations are traded at a premium or at a discount from par; and (iii) the
maturities of such obligations.
Because regular payments of principal are to be received and certain of the
Securities from time to time may be redeemed or will mature in accordance with
their terms or may be sold under certain circumstances described herein, the
Trusts referred to herein might not retain their present size and composition.
GNMA-1
GNMA PORTFOLIOS
<PAGE>
GNMA PORTFOLIO SERIES 6 PORTFOLIO
AS OF THE INITIAL DATE OF DEPOSIT: JULY 23, 1996
Government National Mortgage Association, Modified Pass-Through
Mortgage-Backed Securities
<TABLE>
<CAPTION>
RANGE OF COST OF
FACE STATED SECURITIES
AMOUNT ISSUER COUPON MATURITIES(1) TO TRUST(2)
- ---------------------------------------------------
<C> <S> <C> <C> <C>
$125,000 GNMA 7.00% 2011 to 2012 $123,750
375,000 GNMA 6.50% 2011 to 2012 363,634
-------- --------
$500,000 $487,384
======== ========
</TABLE>
- --------
See "Notes to Portfolios."
GNMA PORTFOLIO SERIES 7 PORTFOLIO
AS OF THE INITIAL DATE OF DEPOSIT: JULY 23, 1996
Government National Mortgage Association, Modified Pass-Through
Mortgage-Backed Securities
<TABLE>
<CAPTION>
RANGE OF COST OF
FACE STATED SECURITIES
AMOUNT ISSUER COUPON MATURITIES(1) TO TRUST(2)
- ---------------------------------------------------
<C> <S> <C> <C> <C>
$125,000 GNMA 8.00% 2025 to 2027 $125,899
375,000 GNMA 7.00% 2025 to 2027 358,830
-------- --------
$500,000 $484,729
======== ========
</TABLE>
- --------
See "Notes to Portfolios."
GNMA-2
GNMA PORTFOLIOS
<PAGE>
NOTES TO PORTFOLIOS
(1) The principal amount of Securities listed as having the range of
maturities shown is an aggregate of individual Securities having varying
ranges of maturities within that shown. They are listed as one category of
Securities with a single range of maturities because of current market
conditions that accord no difference in price among the Securities grouped
together on the basis of the difference in their maturity ranges. At some
time in the future, however, the difference in maturity ranges could
affect the market value of the individual Securities.
(2) Some Securities may be represented by contracts to purchase such
Securities. During the initial offering period, evaluations of Securities
are made on the basis of current offering side evaluations of the
Securities. The aggregate offering price is greater than the aggregate bid
price of the Securities, which is the basis on which Redemption Prices
will be determined for purposes of redemption of Units after the initial
offering period. Other information regarding the Securities in the Trusts,
at the opening of business on the Initial Date of Deposit, is as follows:
<TABLE>
<CAPTION>
GNMA GNMA
PORTFOLIO PORTFOLIO
SERIES 6 SERIES 7
--------- ---------
<S> <C> <C>
Cost of Securities to Sponsor............................ $485,508 $482,854
Profit or (Loss) to Sponsor.............................. $ 1,876 $ 1,875
Annual Interest Income to Trust.......................... $ 33,125 $ 36,250
Bid Side Value of Securities............................. $484,883 $482,229
</TABLE>
(3) This Security has been purchased at a deep discount from the par value
because there is little or no stated interest income thereon. Securities
which pay no interest are normally described as "zero coupon" bonds. Over
the life of Securities purchased at a deep discount the value of such
Securities will increase such that upon maturity the holders of such
Securities will receive 100% of the principal amount thereof.
----------------
* In addition to the information as to the GNMA modified pass-through
mortgage-backed Securities set forth under "Portfolios," the Trustee will
furnish Unitholders a statement listing the name of issuer, pool number,
interest rate, maturity date and principal amount for each such Security in
the portfolio upon written request.
----------------
GNMA-3
GNMA PORTFOLIOS
<PAGE>
RISK FACTORS
Each Trust is a unit investment trust whose objectives are to obtain safety of
capital and to provide current monthly distributions of interest and principal
through investment in a fixed portfolio initially consisting primarily of
contracts to purchase taxable mortgage-backed securities of the modified pass-
through type ("Ginnie Maes" or "Securities"), including so-called "Ginnie Mae
II's," which involve larger pools of mortgages and which have a central paying
agent, fully guaranteed as to principal and interest by the Government
National Mortgage Association ("GNMA"). All of the Ginnie Maes in the Trusts
consist of pools of long term mortgages on 1- to 4-family dwellings. Certain
GNMA Portfolio Series may also include certain zero coupon U.S. Treasury
Obligations.
An investment in Units of a Trust should be made with an understanding of the
risks which an investment in fixed rate long term 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
Securities will fluctuate inversely with changes in interest rates. In
addition, the potential for appreciation of the underlying Securities, which
might otherwise be expected to occur as a result of a decline in interest
rates, may be limited or negated by increased principal prepayments in respect
of the underlying mortgages. The high inflation of prior years, together with
the fiscal measures adopted to attempt to deal with it, have resulted in wide
fluctuations in interest rates and, thus, in the value of fixed rate long term
debt obligations generally. The sponsor cannot predict whether such
fluctuations will continue in the future.
The Securities in the Trusts were chosen in part on the basis of their
respective stated maturity dates. The ranges of maturity dates of each of the
Securities contained in the Trusts are shown on the "Portfolios." The stated
mandatory termination date of the GNMA Portfolios are set forth under
"Essential Information." See "Life of the Securities and of the GNMA Trusts"
below.
The Trusts may be appropriate mediums for investors who desire to participate
in a portfolio of taxable fixed income securities offering the safety of
capital provided by securities backed by the full faith and credit of the
United States but who do not wish to invest the minimum amount which is
required for a direct investment in GNMA guaranteed securities. The portfolio
of each GNMA Trust initially consists of contracts to purchase Ginnie Maes,
including so-called Ginnie Mae II's, fully guaranteed as to payments of
principal and interest by the Government National Mortgage Association.
Each group of Ginnie Maes described herein as having a specified range of
maturities includes individual mortgage-backed securities which have varying
ranges of maturities within each range specified under "Essential
Information." Each such group of Ginnie Maes is described as one category of
securities because current market conditions accord no difference in price
among the individual Ginnie Mae securities within such group on the basis of
the difference in the maturity dates of each Ginnie Mae. As long as this
market condition prevails, a purchase of Ginnie Maes with the same coupon rate
and a maturity date within the range mentioned above will be considered an
acquisition of the same Security. In the future, however, the difference in
maturity ranges could affect the market value of the individual Ginnie Maes.
At such time, any additional purchases by a Trust will take into account the
maturities of the individual Securities.
The Trusts may contain Securities which were acquired at a market discount.
Such Securities trade at less than par value because the interest rates
thereon are lower than interest rates on comparable debt securities being
issued at currently prevailing interest rates. If such interest rates for
newly issued and otherwise comparable securities increase, the market discount
of previously issued securities will increase
GNMA-4
GNMA PORTFOLIOS
<PAGE>
and if such interest rates for newly issued comparable securities decline, the
market discount of previously issued securities will decrease, other things
being equal. Market discount attributable to interest rate changes does not
indicate a lack of market confidence in the issue.
Unitholders will be "at risk" with respect to such Securities (i.e., may
derive either gain or loss from fluctuations in the evaluation of the
Securities) from the date they commit for Units. See "General Information--
Interest, Estimated Current Return and Estimated Long-Term Return."
The mortgages underlying a Ginnie Mae may be prepaid at any time without
penalty. A lower or higher return on Units may occur depending on whether the
price at which the respective Ginnie Maes were acquired by a Trust is lower or
higher than par (which represents the price at which such Ginnie Maes will be
redeemed upon prepayment). Redemption of premium Ginnie Maes at par pursuant
to prepayments of mortgages will operate to lower the current return on Units
of such Series outstanding at that time since premium Ginnie Maes normally
carry higher interest coupons than par or discount Ginnie Maes. If mortgage
rates decline in the future, such prepayments may occur with increasing
frequency because, among other reasons, mortgagors may be able to refinance
their outstanding mortgages at lower interest rates. See "Life of the
Securities and of the GNMA Trusts."
Set forth below is a brief description of the current method of origination of
Ginnie Maes; the nature of such securities, including the guaranty of GNMA;
the basis of selection and acquisition of the Ginnie Maes included in the
Trusts; and the expected life of the Ginnie Maes and of the Trusts. The
"Portfolios" contain information concerning the coupon rate and range of
stated maturities of the Ginnie Maes in the Trusts.
Origination. The Ginnie Maes included in each Trust are backed by the
indebtedness secured by underlying mortgage pools of long-term mortgages on 1-
to 4-family dwellings. The pool of mortgages which is to underlie a particular
new issue of Ginnie Maes is assembled by the proposed issuer of such Ginnie
Maes. The issuer is typically a mortgage banking firm, and in every instance
must be a mortgagee approved by and in good standing with the Federal Housing
Administration ("FHA"). In addition, GNMA imposes its own criteria on the
eligibility of issuers, including a net worth requirement.
The mortgages which are to comprise a new Ginnie Mae pool may have been
originated by the issuer itself in its capacity as a mortgage lender or may be
acquired by the issuer from a third party. Such third party may be another
mortgage banker, a banking institution, the Veterans Administration ("VA")
(which in certain instances acts as a direct lender and thus originates its
own mortgages) or one of several governmental agencies. All mortgages in any
given pool will be insured under the National Housing Act, as amended ("FHA-
insured") or Title V of the Housing Act of 1949 ("FMHA-insured") or guaranteed
under the Servicemen's Readjustment Act of 1944, as amended, or Chapter 37 of
Title 38, U.S.C. ("VA-guaranteed"). Such mortgages will have a date for the
first scheduled monthly payment of principal that is not more than one year
prior to the date on which GNMA issues its guaranty commitment as described
below, will have comparable interest rates and maturity dates, and will meet
additional criteria of GNMA. All mortgages in the pools backing the Ginnie
Maes contained in the GNMA Portfolio Series are mortgages on 1- to 4-family
dwellings. In general, the mortgages in these pools provide for monthly
payments over the life of the mortgage (aside from prepayments) designed to
repay the principal of the mortgage over such period, together with interest
at the fixed rate of the unpaid balance.
To obtain GNMA approval of a new pool of mortgages, the issuer will file with
GNMA an application containing information concerning itself, describing
generally the pooled mortgages, and requesting that GNMA approve the issue and
issue its commitment (subject to GNMA's satisfaction with the mortgage
GNMA-5
GNMA PORTFOLIOS
<PAGE>
documents and other relevant documentation) to guarantee the timely payment of
principal of and interest on the Ginnie Maes to be issued by the issuer. If
the application is in order, GNMA will issue its commitment and will assign a
GNMA pool number to the pool. Upon completion of the required documentation
(including detained information as to the underlying mortgages, a custodial
agreement with a Federal or state regulated financial institution satisfactory
to GNMA pursuant to which the underlying mortgages will be held in
safekeeping, and a detailed guaranty agreement between GNMA and the issuer)
the issuance of the Ginnie Maes is permitted. When the Ginnie Maes are issued,
GNMA will endorse its guaranty thereon. The aggregate principal amount of
Ginnie Maes issued will be equal to the then aggregate unpaid principal
balances of the pooled mortgages. The interest rate borne by the Ginnie Maes
is currently fixed at 1/2 of 1% below the interest rate of the pooled 1- to 4-
family mortgages, the differential being applied to the payment of servicing
and custodial charges as well as GNMA's guaranty fee.
Ginnie Mae II's consist of jumbo pools of mortgages consisting of pools or
mortgages from more than one issuer. The major advantage of Ginnie Mae II's
lies in the fact that a central paying agent sends one check to the holder on
the required payment date. This greatly simplifies the current procedure of
collecting distributions from each issuer of a Ginnie Mae, since such
distributions are often received late.
Nature of Ginnie Maes and GNMA Guaranty. All of the Ginnie Maes in the GNMA
Portfolio Series, including the Ginnie Mae II's, are of the "modified pass-
through" type, i.e., they provide for timely monthly payments to the
registered holders thereof (including a GNMA Portfolio) of a pro rata share of
the scheduled principal payments on the underlying mortgages, whether or not
collected by the issuers. Such monthly payments will also include, on a pro
rata basis, any prepayments of principal of such mortgages received and
interest (net of the servicing and other charges described above) on the
aggregate unpaid principal balance of such Ginnie Maes, whether or not the
interest on the underlying mortgages has been collected by the issuers.
The Ginnie Maes in the GNMA Portfolio Series are guaranteed as to timely
payment of principal and interest by GNMA. Funds received by the issuers on
account of the mortgages backing the Ginnie Maes in the GNMA Portfolio Series
are intended to be sufficient to make the required payments of principal of
and interest on such Ginnie Maes but, if such funds are insufficient for that
purpose, the guaranty agreements between the issuers and GNMA require the
issuers to make advances sufficient for such payments. If the issuers fail to
make such payments, GNMA will do so.
GNMA is authorized by Section 306(g) of Title III of the National Housing Act
to guarantee the timely payment of principal of and interest on securities
which are based on or backed by a trust for pool composed of mortgages insured
by FHA, the Farmers' Home Administration ("FMHA") or guaranteed by the VA.
Section 306(g) provides further that the full faith and credit of the United
States is pledged to the payment of all amounts which may be required to be
paid under any guaranty under such subsection. An opinion of an Assistant
Attorney General of the United States, dated December 9, 1969, states that
such guaranties "constitute general obligations of the United States backed by
its full faith and credit."* GNMA is empowered to borrow from the United
States Treasury to the extent necessary to make any payments of principal and
interest required under such guaranties. Ginnie Maes are backed by the
aggregate indebtedness secured by the underlying FHA-insured, FMHA-insured or
VA-guaranteed
- --------
*Any statement in this Prospectus that a particular Security is backed by the
full faith and credit of the United States is based upon the opinion of an
Assistant Attorney General of the United States and should be so construed.
GNMA-6
GNMA PORTFOLIOS
<PAGE>
mortgages and, except to the extent of funds received by the issuers on
account of such mortgages, Ginnie Maes do not constitute a liability of nor
evidence any recourse against such issuers, but recourse thereon is solely
against GNMA. Holders of Ginnie Maes (such as the Trusts) have no security
interest in or lien on the underlying mortgages.
The GNMA guaranties referred to herein relate only to payment of principal of
and interest on the Ginnie Maes in the portfolio and not the Units offered
hereby.
Life of the Securities and of the GNMA Trusts. Monthly payments of principal
will be made, and additional prepayments of principal may be made, to the GNMA
Trusts in respect of the mortgages underlying the Ginnie Maes in each GNMA
Portfolio. All of the mortgages in the pools relating to the Ginnie Maes in
each GNMA Portfolio are subject to prepayment without any significant premium
or penalty at the option of the mortgagors. It has been the experience of the
mortgage industry that the average life of mortgages comparable to those
contained in the GNMA Portfolios, owing to prepayments, refinancings and
payments from foreclosures is considerably less than the stated maturity for
each series set forth in "Essential Information."
In the mid 1970's, published tables for Ginnie Maes utilized a 12 year average
life assumption for Ginnie Mae pools of 26-30 year mortgages on 1- to 4-family
dwellings. This assumption was derived from the FHA experience relating to
prepayments on such mortgages during the period from the mid 1950's to the mid
1970's. This 12 year average life assumption was calculated in respect of a
period during which mortgage lending rates were fairly stable. That assumption
is probably no longer an accurate measure of the life of Ginnie Maes or their
underlying single family mortgage pools. However, current yield tables,
published in 1981, still utilize the 12 year average life assumption and
Ginnie Maes continue to be traded based on this assumption. Recently it has
been observed that mortgages issued at high interest rates have experienced
accelerated prepayment rates which would indicate a shorter average life than
12 years.
A number of factors, including homeowner's mobility, change in family size and
mortgage market interest rates will affect the average life of the Ginnie Maes
in the Trusts. For example, Ginnie Maes issued during a period of high
interest rates will be backed by a pool of mortgage loans bearing similarly
high rates. In general, during a period of declining interest rates, new
mortgage loans with interest rates lower than those charged during periods of
high rates will become available. To the extent a homeowner has an outstanding
mortgage with a high rate, he may refinance his mortgage at a lower interest
rate or he may rapidly repay his old mortgage. Should this happen, a Ginnie
Mae issued with a high interest rate may experience a rapid prepayment of
principal as the underlying mortgage loans prepay in whole or in part.
Accordingly, there can be no assurance that the prepayment levels which will
be actually realized will conform to the experience of the FHA, other mortgage
lenders or other Ginnie Mae investors. It is not possible to meaningfully
predict prepayment levels regarding the Ginnie Maes in the Trusts. Therefore,
the termination of a Trust might be accelerated as a result of prepayments
made as described herein.
In addition to prepayments as described above, sales of Securities in a Trust
under certain permitted circumstances may result in an accelerated termination
of such Trust. Also, it is possible that, in the absence of a secondary market
for the Units or otherwise, redemptions of Units may occur in sufficient
numbers to reduce a Trust to a size resulting in such termination. Early
termination of a Trust may have important consequences to the Unitholder;
e.g., to the extent that Units were purchased with a view to an investment of
longer duration, the overall investment program of the investor may require
readjustment; or the overall return on investment may be less or greater than
anticipated, depending in part on whether the purchase price paid for Units
represented the payment of an overall premium or a
GNMA-7
GNMA PORTFOLIOS
<PAGE>
discount, respectively, above or below the stated principal amounts of the
underlying mortgages. In addition, a capital gain or loss may result for tax
purposes from termination of a Trust.
FEDERAL TAX STATUS
In the opinion of Chapman and Cutler, counsel for the Sponsor, under existing
law:
Each Trust is an association taxable as a corporation under the Internal
Revenue Code of 1986, as amended (the "Code") and intends to qualify on a
continuous basis for special federal income tax treatment as a "regulated
investment company" under the Code. If a Trust so qualifies and timely
distributes to Unitholders 90% or more of its taxable income (without regard
to its net capital gain, i.e., the excess of its long-term capital gain over
its net short-term capital loss), it will not be subject to federal income tax
on the portion of its taxable income (including any net capital gain) that it
distributes to Unitholders. In addition, to the extent a Trust distributes to
Unitholders at least 98% of its taxable income (including any net capital
gain), it will not be subject to the 4% excise tax on certain undistributed
income of "regulated investment companies." Each Trust intends to timely
distribute its taxable income (including any net capital gains) to avoid the
imposition of federal income tax or the excise tax. Distributions of the
entire net investment income of each Trust are required by the Indenture.
In any taxable year of a Trust, the distributions of its income, other than
distributions which are designated as capital gains dividends, will, to the
extent of the earnings and profits of such Trust, constitute dividends for
Federal income tax purposes which are taxable as ordinary income to
Unitholders. To the extent that the distributions to a Unitholder in any year
exceed a Trust's current and accumulated earnings and profits, they will be
treated as a return of capital and will reduce the Unitholder's basis in his
Units, and to the extent that they exceed his basis, will be treated as a gain
from the sale of his Units as discussed below. Distributions from each Trust
will not be eligible for the 70% dividends received deduction for
corporations. Although distributions generally will be treated as distributed
when paid, distributions declared in October, November or December, payable to
Unitholders of record on a specified date in one of those months and paid
during January of the following year will be treated as having been
distributed by each Trust (and received by the Unitholders) on December 31 of
the year such distributions are declared.
Under the Code, certain miscellaneous itemized deductions, such as investment
expenses, tax return preparation fees and employee business expenses, will be
deductible by individuals only to the extent they exceed 2% of adjusted gross
income. Miscellaneous itemized deductions subject to this limitation under
present law do not include expenses incurred by a Trust as long as the Units
of such Trust are held by or for 500 or more persons at all times during the
taxable year or another exception is met. In the event the Units of a Trust
are held by fewer than 500 persons, additional taxable income will be realized
by the individual (and other noncorporate) Unitholders in excess of the
distributions received from such Trust.
Distributions of a Trust's net capital gain which a Trust designates as
capital gain dividends will be taxable to Unitholders thereof as long-term
capital gains, regardless of the length of time the Units have been held by a
Unitholder. However, if a Unitholder receives a long-term capital gain
dividend (or is allocated to a portion of a Trust's undistributed long-term
capital gain) and sells his Units at a loss prior to holding them for 6
months, such loss will be recharacterized as long-term capital loss to the
extent of such long-term capital gain received as a dividend or allocated to a
Unitholder. Distributions in partial liquidation, reflecting the proceeds of
prepayments, redemptions, maturities (including monthly mortgage
GNMA-8
GNMA PORTFOLIOS
<PAGE>
payments of principal) or sales of Securities from a Trust (exclusive of net
capital gain) will not be taxable to Unitholders of such Trust to the extent
that they represent a return of capital for tax purposes. The portion of
distributions which represents a return of capital will, however, reduce a
Unitholder's basis in his Units, and to the extent they exceed the basis of
his Units will be taxable as a capital gain. A Unitholder may recognize gain
or loss when his Units are sold or redeemed. Such gain or loss will constitute
either a long-term or short-term capital gain or loss depending upon the
length of time the Unitholder has held his Units. Any loss of Units held six
months or less will be treated as long-term capital loss to the extent of any
long-term capital gains dividends received (or deemed to have been received)
by the Unitholder with respect to such Units. For taxpayers other than
corporations, net capital gains are presently subject to a maximum stated
marginal rate of 28%. However, it should be noted that legislative proposals
are introduced from time to time that affect tax rates and could affect
relative differences at which ordinary income and capital gains are taxed. A
capital loss is long-term if the asset is held for more than one year and
short-term if held for one year or less.
The Revenue Reconciliation Act of 1993 (the "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 Act, the 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 Ginnie Mae has been purchased by a Trust at a market discount (i.e., for
a purchase price less than its stated redemption price at maturity (or if
issued with original issue discount, its "revised issue price")) unless the
amount of market discount is "de minimis" as specified in the Code, each
payment of principal on the Ginnie Mae will generally constitute ordinary
income to such Series of the Trust to the extent of any accrued market
discount unless a Trust elects to include market discount in taxable income as
it accrues. In the case of a Ginnie Mae, the amount of market discount that is
deemed to accrue each month shall generally be the amount of discount that
bears the same ratio to the total amount of remaining market discount that the
amount of interest paid during the accrual period (each month) bears to the
total amount of interest remaining to be paid on the Ginnie Mae as of the
beginning of the accrual period.
Each Unitholder of each Trust shall receive an annual statement describing the
tax status of the distributions paid by such Trust.
Each Unitholder 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 a Trust to
such Unitholder (including amounts received upon the redemption of Units) will
be subject to back-up withholding.
A Unitholder who is a foreign investor (i.e., an investor other than a United
States citizen or resident or a United States corporation, partnership, estate
or trust) should be aware that, generally, subject to applicable tax treaties,
distributions from a Trust which constitute dividends for Federal income tax
purposes (other than dividends which a Trust designates as capital gain
dividends) will be subject to United States income taxes, including
withholding taxes. However, distributions received by a foreign
GNMA-9
GNMA PORTFOLIOS
<PAGE>
investor from a Trust that are designated by a Trust as capital gain dividends
should not be subject to United States Federal income taxes, including
withholding taxes, if all of the following conditions are met (i) the capital
gain dividend is not effectively connected with the conduct by the foreign
investor of a trade or business within the United States, (ii) 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 (iii) 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 years thereafter). Foreign investors
should consult their tax advisors with respect to United States tax
consequences of ownership of Units. Units in a Trust and Trust distributions
may also be subject to state and local taxation and Unitholders should consult
their tax advisors in this regard.
It should be remembered that even if distributions are reinvested, they are
still treated as distributions for income tax purposes.
ESTIMATED CASH FLOWS TO UNITHOLDERS
The table below sets forth the per Unit estimated monthly distributions of
interest and principal to Unit holders. The table assumes a constant
prepayment rate on the Initial Date of Deposit. The table also assumes no
changes in the current interest rates, no exchanges, redemptions, or sales of
the underlying securities prior to their maturity or expected retirement date
and assumes that the prepayment rate will not change. To the extent the
foregoing assumptions change, actual distributions will vary.
GNMA PORTFOLIO SERIES 6
Monthly
<TABLE>
<CAPTION>
ESTIMATED ESTIMATED
INTEREST PRINCIPAL
DATES DISTRIBUTION DISTRIBUTION
----- ------------ ------------
<S> <C> <C>
August 1996 $0.00983 $0.00000
September 1996 0.05380 0.03322
October 1996 0.05362 0.03540
November 1996 0.05343 0.03756
December 1996 0.05323 0.03971
January 1997 0.05301 0.04183
February 1997 0.05279 0.04394
March 1997 0.05255 0.04603
April 1997 0.05230 0.04809
May 1997 0.05205 0.05013
June 1997 0.05178 0.05214
July 1997 0.05150 0.05413
August 1997 0.05121 0.05609
September 1997 0.05090 0.05801
October 1997 0.05059 0.05991
November 1997 0.05027 0.06178
December 1997 0.04994 0.06361
January 1998 0.04960 0.06541
February 1998 0.04924 0.06717
March 1998 0.04888 0.06889
April 1998 0.04851 0.07058
May 1998 0.04813 0.07223
June 1998 0.04774 0.07384
July 1998 0.04735 0.07541
August 1998 0.04694 0.07693
September 1998 0.04653 0.07841
October 1998 0.04611 0.07985
November 1998 0.04568 0.08125
December 1998 0.04524 0.08260
</TABLE>
<TABLE>
<CAPTION>
ESTIMATED ESTIMATED
INTEREST PRINCIPAL
DATES DISTRIBUTION DISTRIBUTION
----- ------------ ------------
<S> <C> <C>
January 1999 $0.04479 $0.08390
February 1999 0.04434 0.08516
March 1999 0.04388 0.08461
April 1999 0.04343 0.08407
May 1999 0.04298 0.08353
June 1999 0.04253 0.08300
July 1999 0.04208 0.08247
August 1999 0.04163 0.08194
September 1999 0.04119 0.08142
October 1999 0.04076 0.08090
November 1999 0.04032 0.08038
December 1999 0.03989 0.07986
January 2000 0.03946 0.07935
February 2000 0.03903 0.07885
March 2000 0.03861 0.07834
April 2000 0.03818 0.07784
May 2000 0.03776 0.07734
June 2000 0.03735 0.07685
July 2000 0.03693 0.07635
August 2000 0.03652 0.07586
September 2000 0.03612 0.07538
October 2000 0.03571 0.07490
November 2000 0.03531 0.07442
December 2000 0.03491 0.07394
January 2001 0.03451 0.07346
February 2001 0.03411 0.07299
March 2001 0.03372 0.07253
April 2001 0.03333 0.07206
May 2001 0.03294 0.07160
</TABLE>
GNMA-10
GNMA PORTFOLIOS
<PAGE>
<TABLE>
<CAPTION>
ESTIMATED ESTIMATED
INTEREST PRINCIPAL
DATES DISTRIBUTION DISTRIBUTION
----- ------------ ------------
<S> <C> <C>
June 2001 $0.03256 $0.07114
July 2001 0.03217 0.07068
August 2001 0.03179 0.07023
September 2001 0.03141 0.06978
October 2001 0.03104 0.06933
November 2001 0.03067 0.06889
December 2001 0.03029 0.06844
January 2002 0.02993 0.06801
February 2002 0.02956 0.06757
March 2002 0.02920 0.06713
April 2002 0.02884 0.06670
May 2002 0.02848 0.06628
June 2002 0.02812 0.06585
July 2002 0.02777 0.06543
August 2002 0.02741 0.06501
September 2002 0.02706 0.06459
October 2002 0.02672 0.06417
November 2002 0.02637 0.06376
December 2002 0.02603 0.06335
January 2003 0.02569 0.06294
February 2003 0.02535 0.06254
March 2003 0.02501 0.06214
April 2003 0.02468 0.06174
May 2003 0.02435 0.06134
June 2003 0.02402 0.06094
July 2003 0.02369 0.06055
August 2003 0.02336 0.06016
September 2003 0.02304 0.05978
October 2003 0.02272 0.05939
November 2003 0.02240 0.05901
December 2003 0.02208 0.05863
January 2004 0.02176 0.05825
February 2004 0.02145 0.05788
March 2004 0.02114 0.05750
April 2004 0.02083 0.05713
May 2004 0.02052 0.05676
June 2004 0.02022 0.05640
July 2004 0.01991 0.05603
August 2004 0.01961 0.05567
September 2004 0.01931 0.05531
October 2004 0.01902 0.05496
November 2004 0.01872 0.05460
December 2004 0.01843 0.05425
January 2005 0.01813 0.05390
February 2005 0.01784 0.05355
March 2005 0.01756 0.05321
April 2005 0.01727 0.05286
May 2005 0.01699 0.05252
June 2005 0.01670 0.05218
July 2005 0.01642 0.05184
August 2005 0.01614 0.05151
September 2005 0.01587 0.05118
October 2005 0.01559 0.05085
November 2005 0.01532 0.05052
December 2005 0.01505 0.05019
January 2006 0.01478 0.04987
February 2006 0.01451 0.04954
March 2006 0.01424 0.04922
April 2006 0.01398 0.04890
May 2006 0.01371 0.04859
June 2006 0.01345 0.04827
July 2006 0.01319 0.04796
</TABLE>
<TABLE>
<CAPTION>
ESTIMATED ESTIMATED
INTEREST PRINCIPAL
DATES DISTRIBUTION DISTRIBUTION
----- ------------ ------------
<S> <C> <C>
August 2006 $0.01294 $0.04765
September 2006 0.01268 0.04734
October 2006 0.01242 0.04703
November 2006 0.01217 0.04673
December 2006 0.01192 0.04643
January 2007 0.01167 0.04613
February 2007 0.01142 0.04583
March 2007 0.01118 0.04553
April 2007 0.01093 0.04523
May 2007 0.01069 0.04494
June 2007 0.01045 0.04465
July 2007 0.01021 0.04436
August 2007 0.00997 0.04407
September 2007 0.00973 0.04379
October 2007 0.00950 0.04350
November 2007 0.00926 0.04322
December 2007 0.00903 0.04294
January 2008 0.00880 0.04266
February 2008 0.00857 0.04238
March 2008 0.00834 0.04211
April 2008 0.00811 0.04183
May 2008 0.00789 0.04156
June 2008 0.00767 0.04129
July 2008 0.00744 0.04102
August 2008 0.00722 0.04075
September 2008 0.00701 0.04049
October 2008 0.00679 0.04022
November 2008 0.00657 0.03996
December 2008 0.00636 0.03970
January 2009 0.00614 0.03944
February 2009 0.00593 0.03919
March 2009 0.00572 0.03893
April 2009 0.00551 0.03868
May 2009 0.00530 0.03842
June 2009 0.00510 0.03817
July 2009 0.00489 0.03792
August 2009 0.00469 0.03768
September 2009 0.00449 0.03743
October 2009 0.00428 0.03719
November 2009 0.00408 0.03694
December 2009 0.00389 0.03670
January 2010 0.00369 0.03646
February 2010 0.00349 0.03622
March 2010 0.00330 0.03599
April 2010 0.00310 0.03575
May 2010 0.00291 0.03552
June 2010 0.00272 0.03529
July 2010 0.00253 0.03505
August 2010 0.00234 0.03482
September 2010 0.00216 0.03460
October 2010 0.00197 0.03437
November 2010 0.00179 0.03414
December 2010 0.00160 0.03392
January 2011 0.00142 0.03370
February 2011 0.00124 0.03348
March 2011 0.00106 0.03326
April 2011 0.00088 0.03304
May 2011 0.00070 0.03282
June 2011 0.00053 0.03261
July 2011 0.00035 0.03239
August 2011 0.00018 0.03218
</TABLE>
GNMA-11
GNMA PORTFOLIOS
<PAGE>
GNMA PORTFOLIO SERIES 7
Monthly
<TABLE>
<CAPTION>
ESTIMATED ESTIMATED
INTEREST PRINCIPAL
DATES DISTRIBUTION DISTRIBUTION
----- ------------ ------------
<S> <C> <C>
August 1996 $0.00897 $0.00000
September 1996 0.05900 0.00892
October 1996 0.05895 0.01080
November 1996 0.05889 0.01268
December 1996 0.05881 0.01456
January 1997 0.05873 0.01644
February 1997 0.05863 0.01831
March 1997 0.05852 0.02017
April 1997 0.05840 0.02203
May 1997 0.05827 0.02388
June 1997 0.05813 0.02572
July 1997 0.05798 0.02755
August 1997 0.05782 0.02936
September 1997 0.05764 0.03117
October 1997 0.05746 0.03296
November 1997 0.05726 0.03474
December 1997 0.05706 0.03651
January 1998 0.05684 0.03825
February 1998 0.05662 0.03998
March 1998 0.05638 0.04169
April 1998 0.05613 0.04338
May 1998 0.05588 0.04506
June 1998 0.05561 0.04671
July 1998 0.05533 0.04833
August 1998 0.05505 0.04994
September 1998 0.05475 0.05152
October 1998 0.05445 0.05307
November 1998 0.05413 0.05460
December 1998 0.05381 0.05611
January 1999 0.05348 0.05758
February 1999 0.05313 0.05903
March 1999 0.05278 0.05870
April 1999 0.05244 0.05837
May 1999 0.05209 0.05804
June 1999 0.05175 0.05771
July 1999 0.05141 0.05739
August 1999 0.05107 0.05707
September 1999 0.05073 0.05674
October 1999 0.05039 0.05642
November 1999 0.05006 0.05611
December 1999 0.04972 0.05579
January 2000 0.04939 0.05548
February 2000 0.04907 0.05517
March 2000 0.04874 0.05486
April 2000 0.04841 0.05455
May 2000 0.04809 0.05424
June 2000 0.04777 0.05394
July 2000 0.04745 0.05364
August 2000 0.04713 0.05333
September 2000 0.04682 0.05303
October 2000 0.04650 0.05274
November 2000 0.04619 0.05244
December 2000 0.04588 0.05215
January 2001 0.04557 0.05186
February 2001 0.04526 0.05156
March 2001 0.04496 0.05128
April 2001 0.04465 0.05099
May 2001 0.04435 0.05070
</TABLE>
<TABLE>
<CAPTION>
ESTIMATED ESTIMATED
INTEREST PRINCIPAL
DATES DISTRIBUTION DISTRIBUTION
----- ------------ ------------
<S> <C> <C>
June 2001 $0.04405 $0.05042
July 2001 0.04375 0.05014
August 2001 0.04346 0.04986
September 2001 0.04316 0.04958
October 2001 0.04287 0.04930
November 2001 0.04258 0.04902
December 2001 0.04229 0.04875
January 2002 0.04200 0.04848
February 2002 0.04171 0.04820
March 2002 0.04143 0.04794
April 2002 0.04114 0.04767
May 2002 0.04086 0.04740
June 2002 0.04058 0.04714
July 2002 0.04030 0.04687
August 2002 0.04002 0.04661
September 2002 0.03975 0.04635
October 2002 0.03947 0.04609
November 2002 0.03920 0.04583
December 2002 0.03893 0.04558
January 2003 0.03866 0.04532
February 2003 0.03839 0.04507
March 2003 0.03813 0.04482
April 2003 0.03786 0.04457
May 2003 0.03760 0.04432
June 2003 0.03733 0.04408
July 2003 0.03707 0.04383
August 2003 0.03681 0.04359
September 2003 0.03656 0.04334
October 2003 0.03630 0.04310
November 2003 0.03605 0.04286
December 2003 0.03579 0.04262
January 2004 0.03554 0.04239
February 2004 0.03529 0.04215
March 2004 0.03504 0.04192
April 2004 0.03479 0.04168
May 2004 0.03455 0.04145
June 2004 0.03430 0.04122
July 2004 0.03406 0.04099
August 2004 0.03382 0.04076
September 2004 0.03357 0.04054
October 2004 0.03333 0.04031
November 2004 0.03310 0.04009
December 2004 0.03286 0.03987
January 2005 0.03262 0.03965
February 2005 0.03239 0.03943
March 2005 0.03216 0.03921
April 2005 0.03193 0.03899
May 2005 0.03169 0.03877
June 2005 0.03147 0.03856
July 2005 0.03124 0.03835
August 2005 0.03101 0.03813
September 2005 0.03079 0.03792
October 2005 0.03056 0.03771
November 2005 0.03034 0.03750
December 2005 0.03012 0.03730
January 2006 0.02990 0.03709
February 2006 0.02968 0.03688
March 2006 0.02946 0.03668
April 2006 0.02924 0.03648
May 2006 0.02903 0.03628
June 2006 0.02881 0.03608
</TABLE>
GNMA-12
GNMA PORTFOLIOS
<PAGE>
<TABLE>
<CAPTION>
ESTIMATED ESTIMATED
INTEREST PRINCIPAL
DATES DISTRIBUTION DISTRIBUTION
----- ------------ ------------
<S> <C> <C>
July 2006 $0.02860 $0.03588
August 2006 0.02839 0.03568
September 2006 0.02818 0.03548
October 2006 0.02797 0.03529
November 2006 0.02776 0.03509
December 2006 0.02755 0.03490
January 2007 0.02735 0.03471
February 2007 0.02714 0.03451
March 2007 0.02694 0.03432
April 2007 0.02674 0.03414
May 2007 0.02653 0.03395
June 2007 0.02633 0.03376
July 2007 0.02613 0.03357
August 2007 0.02594 0.03339
September 2007 0.02574 0.03321
October 2007 0.02554 0.03302
November 2007 0.02535 0.03284
December 2007 0.02515 0.03266
January 2008 0.02496 0.03248
February 2008 0.02477 0.03230
March 2008 0.02458 0.03213
April 2008 0.02439 0.03195
May 2008 0.02420 0.03177
June 2008 0.02401 0.03160
July 2008 0.02383 0.03143
August 2008 0.02364 0.03125
September 2008 0.02346 0.03108
October 2008 0.02327 0.03091
November 2008 0.02309 0.03074
December 2008 0.02291 0.03058
January 2009 0.02273 0.03041
February 2009 0.02255 0.03024
March 2009 0.02237 0.03008
April 2009 0.02220 0.02991
May 2009 0.02202 0.02975
June 2009 0.02184 0.02959
July 2009 0.02167 0.02942
August 2009 0.02150 0.02926
September 2009 0.02132 0.02910
October 2009 0.02115 0.02894
November 2009 0.02098 0.02879
December 2009 0.02081 0.02863
January 2010 0.02064 0.02847
February 2010 0.02047 0.02832
March 2010 0.02031 0.02816
April 2010 0.02014 0.02801
May 2010 0.01998 0.02786
June 2010 0.01981 0.02771
July 2010 0.01965 0.02756
August 2010 0.01949 0.02741
September 2010 0.01933 0.02726
October 2010 0.01916 0.02711
November 2010 0.01900 0.02696
December 2010 0.01885 0.02682
January 2011 0.01869 0.02667
February 2011 0.01853 0.02652
March 2011 0.01837 0.02638
April 2011 0.01822 0.02624
May 2011 0.01806 0.02610
June 2011 0.01791 0.02595
July 2011 0.01776 0.02581
August 2011 0.01761 0.02567
</TABLE>
<TABLE>
<CAPTION>
ESTIMATED ESTIMATED
INTEREST PRINCIPAL
DATES DISTRIBUTION DISTRIBUTION
----- ------------ ------------
<S> <C> <C>
September 2011 $0.01745 $0.02553
October 2011 0.01730 0.02540
November 2011 0.01715 0.02526
December 2011 0.01701 0.02512
January 2012 0.01686 0.02499
February 2012 0.01671 0.02485
March 2012 0.01656 0.02472
April 2012 0.01642 0.02458
May 2012 0.01627 0.02445
June 2012 0.01613 0.02432
July 2012 0.01599 0.02419
August 2012 0.01584 0.02406
September 2012 0.01570 0.02393
October 2012 0.01556 0.02380
November 2012 0.01542 0.02367
December 2012 0.01528 0.02354
January 2013 0.01514 0.02342
February 2013 0.01501 0.02329
March 2013 0.01487 0.02317
April 2013 0.01473 0.02304
May 2013 0.01460 0.02292
June 2013 0.01446 0.02279
July 2013 0.01433 0.02267
August 2013 0.01419 0.02255
September 2013 0.01406 0.02243
October 2013 0.01393 0.02231
November 2013 0.01380 0.02219
December 2013 0.01367 0.02207
January 2014 0.01354 0.02195
February 2014 0.01341 0.02183
March 2014 0.01328 0.02172
April 2014 0.01315 0.02160
May 2014 0.01303 0.02149
June 2014 0.01290 0.02137
July 2014 0.01277 0.02126
August 2014 0.01265 0.02114
September 2014 0.01252 0.02103
October 2014 0.01240 0.02092
November 2014 0.01228 0.02081
December 2014 0.01215 0.02070
January 2015 0.01203 0.02059
February 2015 0.01191 0.02048
March 2015 0.01179 0.02037
April 2015 0.01167 0.02026
May 2015 0.01155 0.02015
June 2015 0.01143 0.02004
July 2015 0.01132 0.01994
August 2015 0.01120 0.01983
September 2015 0.01108 0.01973
October 2015 0.01097 0.01962
November 2015 0.01085 0.01952
December 2015 0.01074 0.01941
January 2016 0.01062 0.01931
February 2016 0.01051 0.01921
March 2016 0.01040 0.01911
April 2016 0.01028 0.01901
May 2016 0.01017 0.01891
June 2016 0.01006 0.01881
July 2016 0.00995 0.01871
August 2016 0.00984 0.01861
September 2016 0.00973 0.01851
</TABLE>
GNMA-13
GNMA PORTFOLIOS
<PAGE>
<TABLE>
<CAPTION>
ESTIMATED ESTIMATED
INTEREST PRINCIPAL
DATES DISTRIBUTION DISTRIBUTION
----- ------------ ------------
<S> <C> <C>
October 2016 $0.00962 $0.01841
November 2016 0.00951 0.01832
December 2016 0.00941 0.01822
January 2017 0.00930 0.01812
February 2017 0.00919 0.01803
March 2017 0.00909 0.01793
April 2017 0.00898 0.01784
May 2017 0.00888 0.01774
June 2017 0.00877 0.01765
July 2017 0.00867 0.01756
August 2017 0.00857 0.01747
September 2017 0.00846 0.01737
October 2017 0.00836 0.01728
November 2017 0.00826 0.01719
December 2017 0.00816 0.01710
January 2018 0.00806 0.01701
February 2018 0.00796 0.01692
March 2018 0.00786 0.01684
April 2018 0.00776 0.01675
May 2018 0.00766 0.01666
June 2018 0.00756 0.01657
July 2018 0.00747 0.01649
August 2018 0.00737 0.01640
September 2018 0.00727 0.01632
October 2018 0.00718 0.01623
November 2018 0.00708 0.01615
December 2018 0.00699 0.01606
January 2019 0.00689 0.01598
February 2019 0.00680 0.01590
March 2019 0.00671 0.01581
April 2019 0.00661 0.01573
May 2019 0.00652 0.01565
June 2019 0.00643 0.01557
July 2019 0.00634 0.01549
August 2019 0.00625 0.01541
September 2019 0.00616 0.01533
October 2019 0.00607 0.01525
November 2019 0.00598 0.01517
December 2019 0.00589 0.01509
January 2020 0.00580 0.01501
February 2020 0.00571 0.01494
March 2020 0.00562 0.01486
April 2020 0.00554 0.01478
May 2020 0.00545 0.01471
June 2020 0.00536 0.01463
July 2020 0.00528 0.01456
August 2020 0.00519 0.01448
September 2020 0.00511 0.01441
October 2020 0.00502 0.01433
November 2020 0.00494 0.01426
December 2020 0.00485 0.01419
January 2021 0.00477 0.01411
February 2021 0.00469 0.01404
March 2021 0.00461 0.01397
April 2021 0.00452 0.01390
May 2021 0.00444 0.01383
June 2021 0.00436 0.01376
July 2021 0.00428 0.01369
August 2021 0.00420 0.01362
September 2021 0.00412 0.01355
October 2021 0.00404 0.01348
</TABLE>
<TABLE>
<CAPTION>
ESTIMATED ESTIMATED
INTEREST PRINCIPAL
DATES DISTRIBUTION DISTRIBUTION
----- ------------ ------------
<S> <C> <C>
November 2021 0.00396 0.01341
December 2021 0.00388 0.01334
January 2022 $0.00381 $0.01328
February 2022 0.00373 0.01321
March 2022 0.00365 0.01314
April 2022 0.00357 0.01307
May 2022 0.00350 0.01301
June 2022 0.00342 0.01294
July 2022 0.00334 0.01288
August 2022 0.00327 0.01281
September 2022 0.00319 0.01275
October 2022 0.00312 0.01268
November 2022 0.00305 0.01262
December 2022 0.00297 0.01256
January 2023 0.00290 0.01249
February 2023 0.00282 0.01243
March 2023 0.00275 0.01237
April 2023 0.00268 0.01231
May 2023 0.00261 0.01224
June 2023 0.00254 0.01218
July 2023 0.00246 0.01212
August 2023 0.00239 0.01206
September 2023 0.00232 0.01200
October 2023 0.00225 0.01194
November 2023 0.00218 0.01188
December 2023 0.00211 0.01182
January 2024 0.00204 0.01176
February 2024 0.00197 0.01170
March 2024 0.00191 0.01165
April 2024 0.00184 0.01159
May 2024 0.00177 0.01153
June 2024 0.00170 0.01147
July 2024 0.00164 0.01142
August 2024 0.00157 0.01136
September 2024 0.00150 0.01130
October 2024 0.00144 0.01125
November 2024 0.00137 0.01119
December 2024 0.00130 0.01114
January 2025 0.00124 0.01108
February 2025 0.00117 0.01103
March 2025 0.00111 0.01097
April 2025 0.00105 0.01092
May 2025 0.00098 0.01086
June 2025 0.00092 0.01081
July 2025 0.00086 0.01076
August 2025 0.00079 0.01071
September 2025 0.00073 0.01065
October 2025 0.00067 0.01060
November 2025 0.00061 0.01055
December 2025 0.00054 0.01050
January 2026 0.00048 0.01045
February 2026 0.00042 0.01040
March 2026 0.00036 0.01034
April 2026 0.00030 0.01029
May 2026 0.00024 0.01024
June 2026 0.00018 0.01019
July 2026 0.00012 0.01014
August 2026 0.00006 0.01010
</TABLE>
GNMA-14
GNMA PORTFOLIOS
<PAGE>
T
A
X
E
X
E
M
P
T
P
O
R
T
F
O
L
I
O
S
THE TAX-EXEMPT PORTFOLIOS
THE TRUST PORTFOLIO
The Tax-Exempt Portfolios may be appropriate investment vehicles for investors
who desire to participate in a portfolio of tax-exempt fixed income securities
with greater diversification than they might be able to acquire individually.
In addition, Municipal Bonds of the type deposited in the Tax-Exempt
Portfolios are often not available in small amounts.
The selection of Municipal 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) Standard & Poor's or Moody's ratings of
the Municipal Bonds; (b) the price of the Municipal Bonds relative to other
issues of similar quality and maturity; (c) the diversification of the
Municipal Bonds as to purpose of issue; (d) the income to the Unitholders of
the Trust; (e) in the case of Insured Trust Funds whether such Bonds were
insured or the availability and cost of insurance for the scheduled payment of
principal and interest on the Municipal Bonds; and (f) the dates of maturity
of the Bonds.
All of the Municipal Bonds in each Trust Fund's portfolio are rated in the
category "BBB" or better (including provisional or conditional ratings) by
Standard & Poor's or "Baa" or better by Moody's. See "Portfolio" for each Tax-
Exempt Portfolio.
All Municipal Bonds deposited in the Trust Funds on the Initial Date of
Deposit were represented by purchase contracts assigned to the Trustee
together with cash, cash equivalents or irrevocable letters of credit issued
by a major commercial bank in the amounts necessary to complete the purchase
thereof. Each Trust consists of that number of Municipal Bonds divided by
purpose of issues (and percentage of principal amount of such Trust) as set
forth in the following table.
SERIES INFORMATION
<TABLE>
<CAPTION>
INSURED INSURED
NATIONAL MICHIGAN
SERIES 20 SERIES 15
---------- ----------
<S> <C> <C>
Number of Obligations.................................... 9 8
Territorial Obligations (1).............................. -0- -0-
General Obligation Bonds (2)(3).......................... 4(39%) 5(64%)
Revenue Bonds (4)(3)..................................... 5(61%) 3(36%)
Revenue Bond Concentrations (3):
Airport................................................. 1(13%)
Hospital................................................ 2(24%) 2(30%)
Stadium................................................. 1(12%)
Water and Sewer......................................... 1(6%)
Utilities...............................................
Hospital................................................
Pollution Control.......................................
Lease Revenue...........................................
Education...............................................
Wastewater..............................................
Miscellaneous........................................... 1(12%)
State Concentrations (3):
Bonds Issued by Issuers Located in Illinois............. 3(27%)
Average life of the Municipal Bonds in the Trust (5)..... 27.7 years 26.1 years
Percentage of "when, as and if issued" or "delayed deliv-
ery" Bonds purchased by the Trust....................... 61% 24%
Syndication (6).......................................... 12% 43%
</TABLE>
TE-1
TAX-EXEMPT PORTFOLIOS
<PAGE>
- ---------------------
(1) Municipal Bonds issued by Territories of the United States (which term
includes the Commonwealth of Puerto Rico and the District of Columbia)
generally receive the same tax exempt treatment for both state and Federal
tax purposes as Municipal Bonds issued by political entities in the named
State Trust. See "State Risk Factors and State Tax Status" for each Trust.
(2) General obligation bonds are general obligations of governmental entities
and are backed by the taxing powers of such entities.
(3) The portfolio percentage in parenthesis represents the principal amount of
such Bonds to the total principal amount of Bonds in the Trust. For a
discussion of the risk associated with investments in the bonds of such
issuers, see "Municipal Bond Risk Factors" below. A high concentration of
bonds located in a single state may subject the unitholder to risks of a
downturn in that states economy.
(4) Revenue bonds are payable from the income of a specific project or
authority and are not supported by an issuer's power to levy taxes.
(5) The average life of the Bonds in a Trust is calculated based upon the
stated maturities of the Bonds in such Trust (or, with respect to Bonds
for which funds or securities have been placed in escrow to redeem such
Bonds on a stated call date, based upon such call date). The average life
of the Bonds in a Trust may increase or decrease from time to time as
Bonds mature or are called or sold.
(6) The Sponsor and/or affiliated Underwriters have participated as either the
sole underwriter or manager or a member of underwriting syndicates from
which approximately that percentage listed above of the aggregate
principal amount of the Bonds in such Trust were acquired.
TE-2
TAX-EXEMPT PORTFOLIOS
<PAGE>
TAXABLE EQUIVALENT ESTIMATED CURRENT RETURN TABLES
As of the date of this Prospectus, the following tables show the approximate
taxable estimated current returns for individuals that are equivalent to tax-
exempt estimated current returns under combined Federal and State taxes (where
applicable) using the published Federal and State tax rates (where applicable)
scheduled to be in effect in 1996. They incorporate increased tax rates for
higher income taxpayers that were included in the Revenue Reconciliation Act
of 1993. These tables illustrate approximately what you would have to earn on
taxable investments to equal the tax-exempt estimated current return in your
income tax bracket. The table assumes that Federal taxable income is equal to
State income subject to tax, and for cases in which more than one State rate
falls within a Federal bracket the State rate corresponding to the highest
income within that Federal bracket is used. The combined State and Federal tax
rates shown reflect the fact that State tax payments are currently deductible
for Federal tax purposes, and have been rounded to the nearest 1/10 of 1%. The
table does not reflect any local taxes or any taxes other than personal income
taxes. The tables do not show the approximate taxable estimated current
returns for individuals that are subject to the alternative minimum tax. The
taxable equivalent estimated current returns may be somewhat higher than the
equivalent returns indicated in the following tables for those individuals who
have adjusted gross incomes in excess of $117,950. The tables do not reflect
the effect of Federal or State limitations (if any) on the amount of allowable
itemized deductions and the deduction for personal or dependent exemptions or
any other credits. These limitations were designed to phase out certain
benefits of these deductions for higher income taxpayers. These limitations,
in effect, raise the marginal Federal tax rate to approximately 44 percent for
taxpayers filing a joint return and entitled to four personal exemptions and
to approximately 41 percent for taxpayers filing a single return entitled to
only one personal exemption. These limitations are subject to certain
maximums, which depend on the number of exemptions claimed and the total
amount of the taxpayer's itemized deductions. For example, the limitation on
itemized deductions will not cause a taxpayer to lose more than 80% of his
allowable itemized deductions, with certain exceptions. See "Federal Tax
Status" for a more detailed discussion of recent Federal tax legislation,
including a discussion of provisions affecting corporations.
NATIONAL
<TABLE>
<CAPTION>
TAXABLE INCOME ($1,000'S) TAX-EXEMPT ESTIMATED CURRENT RETURN
- ---------------------------- -------------------------------------------
4 5% 5 6% 6 7% 7
1/2% 1/2% 1/2% 1/2%
SINGLE JOINT EQUIVALENT TAXABLE ESTIMATED
RETURN RETURN TAX BRACKET CURRENT RETURN
------ ------ ----------- -------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0-
24.00 $ 0- 40.10 15.0% 5.29% 5.88% 6.47% 7.06% 7.65% 8.24% 8.82%
24.00-
58.15 40.10- 96.90 28.0 6.25 6.94 7.64 8.33 9.03 9.72 10.42
58.15-
121.30 96.90-147.70 31.0 6.52 7.25 7.97 8.70 9.42 10.14 10.87
121.30-
263.75 147.70-263.75 36.0 7.03 7.81 8.59 9.38 10.16 10.94 11.72
Over
263.75 Over 263.75 39.6 7.45 8.28 9.11 9.93 10.76 11.59 12.42
</TABLE>
TE-3
TAX-EXEMPT PORTFOLIOS
<PAGE>
MICHIGAN
<TABLE>
<CAPTION>
TAXABLE INCOME
($1,000'S) TAX-EXEMPT ESTIMATED CURRENT RETURN
- ------------------------ -------------------------------------------
4 5 6
4% 1/2% 5% 1/2% 6% 1/2% 7%
SINGLE JOINT EQUIVALENT TAXABLE ESTIMATED CURRENT
RETURN RETURN TAX BRACKET* RETURN
------ ------ ------------ -------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0-
24.00 $ 0- 40.10 20.2% 5.01% 5.64% 6.27% 6.89% 7.52% 8.15% 8.77%
24.00-
58.15 40.10- 96.90 32.4 5.92 6.66 7.40 8.14 8.88 9.62 10.36
58.15-
121.30 96.90-147.70 35.2 6.17 6.94 7.72 8.49 9.26 10.03 10.80
121.30-
263.75 147.70-263.75 39.9 6.66 7.49 8.32 9.15 9.98 10.82 11.65
Over
263.75 Over 263.75 43.3 7.05 7.94 8.82 9.70 10.58 11.46 12.35
</TABLE>
- --------
*The combined State and Federal tax brackets includes both the individual
income tax rate and the Michigan intangible tax rate, because the intangible
tax is generally based on income received from intangibles.
TE-4
TAX-EXEMPT PORTFOLIOS
<PAGE>
INSURED NATIONAL
EVEREN UNIT INVESTMENT TRUSTS, SERIES 51
SERIES 20
PORTFOLIO
AS OF THE INITIAL DATE OF DEPOSIT: JULY 23, 1996
<TABLE>
<CAPTION>
NAME OF ISSUER, TITLE,
COUPON RATE AND MATURITY
DATE OF BOND
REPRESENTED BY SPONSOR'S
AGGREGATE CONTRACTS TO PURCHASE REDEMPTION COST OF BONDS
PRINCIPAL BONDS(1)(5) RATING(2) PROVISIONS(3) TO TRUST(4)
- -------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
$ 500,000 (S) Zeeland Public AAA 2004 @ 102 $ 503,000
Schools, Counties of 2015 @ 100 S.F.
Ottawa and Allegan,
State of Michigan 1994
School Building and Site
and Refunding Bonds,
Series B, (General
Obligation-Unlimited
Tax) (MBIA Insured),
6.05% Due 5/1/2019
500,000 (S) The Sports Authority AAA 2006 @ 101 498,000
of The Metropolitan 2018 @ 100 S.F.
Government of Nashville
and Davidson County
Public Improvement
Revenue Bonds
(Tennessee) (Stadium
Project) Series 1996
(AMBAC Insured), 5.875%
Due 7/1/2021
100,000 (P) Metropolitan Pier and AAA 21,130
Exposition Authority
(Illinois) (MBIA
Insured), 0% Due
6/15/2022
500,000 (S) County of Cook, AAA 2006 @ 101 490,855
Illinois, General 2017 @ 100 S.F.
Obligation Capital
Improvement Bonds,
Series 1996 (FGIC
Insured), 5.875% Due
11/15/2022
500,000 Maine Health and Higher AAA 2004 @ 102 466,650
Educational Facilities 2019 @ 100 S.F.
Authority Revenue Bonds,
Series 1993D (FSA
Insured), 5.5% Due
7/1/2023
500,000 Airport Authority of AAA 2006 @ 102 478,905
Washoe County, Reno 2017 @ 100 S.F.
Nevada Airport Revenue
(Tax-Exempt) Bonds,
Series 1996A. (MBIA
Insured), 5.7% Due
7/1/2026
500,000 (S) New Hampshire Higher AAA 2006 @ 102 495,135
Educational & Health 2017 @ 100 S.F.
Facilities Revenue
Hospital-Concord
Hospital Issue (AMBAC
Insured), 6% Due
10/1/2026
500,000 Chicago School Reform AAA 2006 @ 102 496,125
Board of Trustees of the 2020 @ 100 S.F.
Board of Education of
the City of Chicago,
Illinois, Unlimited Tax
General Obligation Bonds
(Dedicated Tax
Revenues), Series 1996
(MBIA Insured), 6.00%
Due 12/1/2026
500,000 (S) Greenville (South AAA 2006 @ 102 485,545
Carolina) Memorial 2023 @ 100 S.F.
Auditorium District,
Public Facilities
Corporation,
Certificates of
Participation (Bi-Lo
Center Project) Series
1996 B (AMBAC Insured),
5.75% Due 3/1/2027
---------- ----------
$4,100,000 $3,935,345
========== ==========
</TABLE>
- --------
See "Notes to Portfolios."
TE-5
TAX-EXEMPT PORTFOLIOS
<PAGE>
EVEREN UNIT INVESTMENT TRUSTS, SERIES 51 INSURED MICHIGAN
SERIES 15
PORTFOLIO
AS OF THE INITIAL DATE OF DEPOSIT: JULY 23, 1996
<TABLE>
<CAPTION>
NAME OF ISSUER, TITLE,
COUPON RATE AND MATURITY
DATE OF BOND
REPRESENTED BY SPONSOR'S
AGGREGATE CONTRACTS TO PURCHASE REDEMPTION COST OF BONDS
PRINCIPAL BONDS(1)(5) RATING(2) PROVISIONS(3) TO TRUST(4)
- -------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
$ 140,000 Dearborn, Michigan Sewage AAA 2004 @ 101 $ 128,299
Disposal System Revenue 2013 @ 100 S.F.
Bonds, 1995 Series (MBIA
Insured), 5.125% Due
4/1/2014
50,000 (P) Reeths Puffer Schools AAA 15,921
Capital Appreciation,
General Obligation Bonds
of 1992 (FGIC Insured),
0% Due 5/1/2016
250,000 (S) Zeeland Public AAA 2004 @ 102 251,500
Schools, Counties of 2015 @ 100 S.F.
Ottawa and Allegan, State
of Michigan, 1994 School
Building and Site and
Refunding Bonds, Series B
(General Obligation--
Unlimited Tax) (MBIA
Insured), 6.05% Due
5/1/2019
500,000 Mason, Michigan, Public AAA 2005 @ 101.5 467,550
School District, 1995 2016 @ 100 S.F.
Series (FGIC Insured),
5.4% Due 5/1/2021
350,000 (S) Huron Valley School AAA 2007 @ 100 342,895
District Counties of 2017 @ 100 S.F.
Oakland and Livingston,
State of Michigan, 1996
School Building and Site
Bonds (General
Obligation--Unlimited
Tax) (FGIC Insured),
5.75% Due 5/1/2022
500,000 Byron Center Public AAA 2005 @ 101 494,545
Schools, County of Kent, 2016 @ 100 S.F.
State of Michigan, 1995
School Building and Site
and Refunding Bonds,
(General
Obligation--Unlimited
Tax) (MBIA insured),
5.875% Due 5/1/2024
250,000 Farmington Hills, AAA 2005 @ 102 242,108
Michigan Economic 2016 @ 100 S.F.
Development Corporation
Revenue Bonds, Botsford
Continuing Care Group -
Series A (MBIA Insured),
5.75% Due 2/15/2025
500,000 The Economic Development AAA 2005 @ 102 494,370
Corporation of the City 2016 @ 100 S.F.
of Dearborn Hospital
Revenue Bonds (Oakwood
Obligated Group) Series
1995A (FGIC Insured),
5.875% Due 11/15/2025
---------- ----------
$2,540,000 $2,437,188
========== ==========
</TABLE>
- --------
See "Notes to Portfolios."
TE-6
TAX-EXEMPT PORTFOLIOS
<PAGE>
NOTES TO PORTFOLIO:
All insured Bonds in the Trust Funds are insured only by the insurer indicated
in the description. The insurance was obtained directly by the issuer of the
Bonds or by the Sponsor.
(P) This Bond was issued at an original issue discount. The tax effect of
Bonds issued at an original issue discount is described in "Federal Tax
Status."
(S) These Municipal Bonds are "when, as and if issued" or "delayed delivery"
and have expected settlement dates after the "First Settlement Date."
Interest on these Bonds begins accruing to the benefit of Unitholders on
the date of delivery.
(X) This Bond is of the same issue as another Bond in the Trust.
(D) This issue of Bonds is secured by, and payable from, escrowed U.S.
Government securities.
(1) Contracts to acquire Municipal Bonds were entered into by the Sponsor
between July 16, 1996 and July 22, 1996. All Bonds are represented by
regular way contracts, unless otherwise indicated, for the performance of
which an irrevocable letter of credit has been deposited with the Trustee.
(2) The ratings have been provided by Cantor Fitzgerald & Co. as reported to
Cantor Fitzgerald & Co. by the respective rating agencies. All ratings
represent Standard & Poor's ratings unless marked with the symbol "*" in
which case the rating represents a Moody's Investors Service, Inc. rating.
A brief description of the applicable Standard & Poor's and Moody's rating
symbols and their meanings is set forth under "Appendix: Description of
Ratings" or under "General Information--Rating of Units." A rating marked
by "[_]" is contingent upon Standard & Poor's receiving final
documentation from the insurer.
(3) There is shown under this heading the year in which each issue of
Municipal Bonds is initially redeemable and the redemption price for that
year; 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 or sinking fund provisions under certain unusual or
extraordinary circumstances specified in the instruments setting forth the
terms and provisions of such Bonds. "S.F." indicates that a sinking fund
is established with respect to an issue of Municipal Bonds.
(4) During the initial offering period, evaluations of Municipal Bonds are
made on the basis of current offering side evaluations of the Municipal
Bonds. The aggregate offering price is greater than the aggregate bid
price of the Municipal Bonds, which is the basis on which Redemption
Prices will be determined for purposes of redemption of Units after the
initial offering period.
(5) Other information regarding the Municipal Bonds in the Trust Funds, at the
opening of business on the Initial Date of Deposit, is as follows:
<TABLE>
<CAPTION>
INSURED INSURED
NATIONAL MICHIGAN
SERIES 20 SERIES 15
---------- ----------
<S> <C> <C>
Cost of Bonds to Sponsor.............................. $3,917,939 $2,420,431
Profit or (Loss) to Sponsor........................... $ 17,406 $ 16,757
Annual Interest Income to Trust....................... $ 233,750 $ 142,550
Bid Side Value of Bonds............................... $3,910,750 $2,421,947
</TABLE>
Neither Cost of Bonds to Sponsor nor Profit or (Loss) to Sponsor reflects
underwriting profits or losses received or incurred by the Sponsor through
its participation in underwriting syndicates but such amounts reflect
portfolio hedging transaction costs, hedging gains or losses, certain other
carrying costs and the cost of insurance obtained by the Sponsor, if any,
prior to the Initial Date of Deposit for individual Bonds.
TE-7
TAX-EXEMPT PORTFOLIOS
<PAGE>
RISK FACTORS
Certain of the Bonds in the Trust Funds may be general obligations of a
governmental entity that are backed by the taxing power of such entity. All
other Bonds in the Trusts are revenue bonds payable from the income of a
specific project or authority and are not supported by the issuer's power to
levy taxes. General obligation bonds are secured by the issuer's pledge of its
faith, credit and taxing power for the payment of principal and interest.
Revenue bonds, on the other hand, are payable only from the revenues derived
from a particular facility or class of facilities or, in some cases, from the
proceeds of a special excise or other specific revenue source. There are, of
course, variations in the security of the different Bonds in the Trust Funds,
both within a particular classification and between classifications, depending
on numerous factors.
Certain of the Bonds in the Trust Funds may be obligations of issuers whose
revenues are derived from services provided by hospitals and other health care
facilities, including nursing homes. Ratings of bonds issued for health care
facilities are often based on feasibility studies that contain projections of
occupancy levels, revenues and expenses. A facility's gross receipts and net
income available for debt service will be affected by future events and
conditions including, among other things, demand for services and the ability
of the facility to provide the services required, physicians' confidence in
the facility, management's capabilities, economic developments in the service
area, competition, efforts by insurers and governmental agencies to limit
rates, legislation establishing state rate-setting agencies, expenses, the
cost and possible unavailability of malpractice insurance, the funding of
Medicare, Medicaid and other similar third party payor programs, and
government regulation. Federal legislation has been enacted which implements a
system of prospective Medicare reimbursement which may restrict the flow of
revenues to hospitals and other facilities which are reimbursed for services
provided under the Medicare program. Future legislation or changes in the
areas noted above, among other things, would affect all hospitals to varying
degrees and, accordingly, any adverse changes in these areas may affect the
ability of such issuers to make payments of principal and interest on
Municipal Bonds held in the portfolios of the Trust Funds. Such adverse
changes also may affect the ratings of the Municipal Bonds held in the
portfolios of the Trust Funds.
Certain of the Bonds in the Trust Funds may be single family mortgage revenue
bonds, which are issued for the purpose of acquiring from originating
financial institutions notes secured by mortgages on residences located within
the issuer's boundaries and owned by persons of low or moderate income.
Mortgage loans are generally partially or completely prepaid prior to their
final maturities as a result of events such as sale of the mortgaged premises,
default, condemnation or casualty loss. Because these Bonds are subject to
extraordinary mandatory redemption in whole or in part from such prepayments
of mortgage loans, a substantial portion of such Bonds will probably be
redeemed prior to their scheduled maturities or even prior to their ordinary
call dates. The redemption price of such issues may be more or less than the
offering price of such Bonds. Extraordinary mandatory redemption without
premium could also result from the failure of the originating financial
institutions to make mortgage loans in sufficient amounts within a specified
time period or, in some cases, from the sale by the Bond issuer of the
mortgage loans. Failure of the originating financial institutions to make
mortgage loans would be due principally to the interest rates on mortgage
loans funded from other sources becoming competitive with the interest rates
on the mortgage loans funded with the proceeds of the single family mortgage
revenue bonds. Additionally, unusually high rates of default on the underlying
mortgage loans may reduce revenues available for the payment of principal of
or interest on such mortgage revenue bonds. Single family mortgage revenue
bonds issued after December 31, 1980 were issued under Section 103A of the
Internal Revenue Code of 1954, which Section contains certain ongoing
requirements relating to the use
TE-8
TAX-EXEMPT PORTFOLIOS
<PAGE>
of the proceeds of such Bonds in order for the interest on such Bonds to
retain its tax-exempt status. In each case, the issuer of the Bonds has
covenanted to comply with applicable ongoing requirements and bond counsel to
such issuer has issued an opinion that the interest on the Bonds is exempt
from Federal income tax under existing laws and regulations. There can be no
assurances that the ongoing requirements will be met. The failure to meet
these requirements could cause the interest on the Bonds to become taxable,
possibly retroactively from the date of issuance.
Certain of the Bonds in the Trust Funds may be obligations of issuers whose
revenues are primarily derived from mortgage loans to housing projects for low
to moderate income families. The ability of such issuers to make debt service
payments will be affected by events and conditions affecting financed
projects, including, among other things, the achievement and maintenance of
sufficient occupancy levels and adequate rental income, increases in taxes,
employment and income conditions prevailing in local labor markets, utility
costs and other operating expenses, the managerial ability of project
managers, changes in laws and governmental regulations, the appropriation of
subsidies and social and economic trends affecting the localities in which the
projects are located. The occupancy of housing projects may be adversely
affected by high rent levels and income limitations imposed under Federal and
state programs. Like single family mortgage revenue bonds, multi-family
mortgage revenue bonds are subject to redemption and call features, including
extraordinary mandatory redemption features, upon prepayment, sale or non-
origination of mortgage loans as well as upon the occurrence of other events.
Certain issuers of single or multi-family housing bonds have considered
various ways to redeem bonds they have issued prior to the stated first
redemption dates for such bonds. In connection with the housing Bonds held by
the Trust Funds, the Sponsor has not had any direct communications with any of
the issuers thereof, but at the Initial Date of Deposit it is not aware that
any of the respective issuers of such Bonds are actively considering the
redemption of such Bonds prior to their respective stated initial call dates.
However, there can be no assurance that an issuer of a Bond in the Trusts will
not attempt to so redeem a Bond in the Trust Funds.
Certain of the Bonds in the Trust Funds may be obligations of issuers whose
revenues are derived from the sale of water and/or sewerage services. Water
and sewerage bonds are generally payable from user fees. Problems faced by
such issuers include the ability to obtain timely and adequate rate increases,
a decline in population resulting in decreased user fees, the difficulty of
financing large construction programs, the limitations on operations and
increased costs and delays attributable to environmental considerations, the
increasing difficulty of obtaining or discovering new supplies of fresh water,
the effect of conservation programs and the impact of "no-growth" zoning
ordinances. Issuers may have experienced these problems in varying degrees.
Certain of the Bonds in the Trust Funds may be obligations of issuers whose
revenues are primarily derived from the sale of electric energy or natural
gas. Utilities are generally subject to extensive regulation by state utility
commissions which, among other things, establish the rates which may be
charged and the appropriate rate of return on an approved asset base. The
problems faced by such issuers include the difficulty in obtaining approval
for timely and adequate rate increases from the governing public utility
commission, the difficulty in financing large construction programs, the
limitations on operations and increased costs and delays attributable to
environmental considerations, increased competition, recent reductions in
estimates of future demand for electricity in certain areas of the country,
the difficulty of the capital market in absorbing utility debt, the difficulty
in obtaining fuel at reasonable prices and the effect of energy conservation.
Issuers may have experienced 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 such Bonds to make payments of principal and/or
interest on such Bonds.
TE-9
TAX-EXEMPT PORTFOLIOS
<PAGE>
Certain of the Bonds in the Trust Funds may be industrial revenue bonds
("IRBs"), including pollution control revenue bonds, which are tax-exempt
securities issued by states, municipalities, public authorities or similar
entities to finance the cost of acquiring, constructing or improving various
industrial projects. These projects are usually operated by corporate
entities. Issuers are obligated only to pay amounts due on the IRBs to the
extent that funds are available from the unexpended proceeds of the IRBs or
receipts or revenues of the issuer under an arrangement between the issuer and
the corporate operator of a project. The arrangement may be in the form of a
lease, installment sale agreement, conditional sale agreement or loan
agreement, but in each case the payments to the issuer are designed to be
sufficient to meet the payments of amounts due on the IRBs. Regardless of the
structure, payment of IRBs is solely dependent upon the creditworthiness of
the corporate operator of the project or corporate guarantor. Corporate
operators or guarantors may be affected by many factors which may have an
adverse impact on the credit quality of the particular company or industry.
These include cyclicality of revenues and earnings, regulatory and
environmental restrictions, litigation resulting from accidents or
environmentally-caused illnesses, extensive competition and financial
deterioration resulting from leveraged buy-outs or takeovers. The IRBs in the
Trust Funds may be subject to special or extraordinary redemption provisions
which may provide for redemption at par or, with respect to original issue
discount bonds, at issue price plus the amount of original issue discount
accreted to the redemption date plus, if applicable, a premium. The Sponsor
cannot predict the causes or likelihood of the redemption date plus, if
applicable, a premium. The Sponsor cannot predict the causes or likelihood of
the redemption of IRBs or other Bonds in the Trust Funds prior to the stated
maturity of such Bonds.
Certain of the Bonds in the Trust Funds may be obligations which are payable
from and secured by revenues derived from the ownership and operation of
facilities such as airports, bridges, turnpikes, port authorities, convention
centers and arenas. The major portion of an airport's gross operating income
is generally derived from fees received from signatory airlines pursuant to
use agreements which consist of annual payments for leases, occupancy of
certain terminal space and service fees. Airport operating income may
therefore be affected by the ability of the airlines to meet their obligations
under the use agreements. The air transport industry is experiencing
significant variations in earnings and traffic, due to increased competition,
excess capacity, increased costs, deregulation, traffic constraints and other
factors, and several airlines are experiencing severe financial difficulties.
The Sponsor cannot predict what effect these industry conditions may have on
airport revenues which are dependent for payment on the financial condition of
the airlines and their usage of the particular airport facility. Similarly,
payment on Bonds related to other facilities is dependent on revenues from the
projects, such as user fees from ports, tolls on turnpikes and bridges and
rents from buildings. Therefore, payment may be adversely affected by
reduction in revenues due to such factors as increased cost of maintenance,
decreased use of a facility, lower cost of alternative modes of
transportation, scarcity of fuel and reduction or loss of rents.
Certain of the Bonds in the Trust Funds may be obligations of issuers which
are, or which govern the operation of, schools, colleges and universities and
whose revenues are derived mainly from ad valorem taxes, or for higher
eduction systems, from tuition, dormitory revenues, grants and endowments.
General problems relating to school bonds include litigation contesting the
state constitutionality of financing public eduction in part from ad valorem
taxes, thereby creating a disparity in educational funds available to schools
in wealthy areas and schools in poor areas. Litigation or legislation on this
issue may affect the sources of funds available for the payment of school
bonds in the Trusts. General problems relating to college and university
obligations would include the prospect of a declining percentage of the
population consisting of "college" age individuals, possible inability to
raise tuition and fees sufficiently to cover increased operating costs, the
uncertainty of continued receipt of Federal grants and state
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funding and new government legislation or regulations which may adversely
affect the revenues or costs of such issuers. All of such issuers have been
experiencing certain of these problems in varying degrees.
Certain of the Bonds in the Trust Funds may be Urban Redevelopment Bonds
("URBs"). URBs have generally been issued under bond resolutions pursuant to
which the revenues and receipts payable under the arrangements with the
operator of a particular project have been assigned and pledged to purchasers.
In some cases, a mortgage on the underlying project may have been granted as
security for the URBs. Regardless of the structure, payment of the URBs is
solely dependent upon the creditworthiness of the operator of the project.
Certain of the Bonds in the Trust Funds may be lease revenue bonds whose
revenues are derived from lease payments made by a municipality or other
political subdivision which is leasing equipment or property for use in its
operation. The risks associated with owning Bonds of this nature include the
possibility that appropriation of funds for a particular project or equipment
may be discontinued. The Sponsor cannot predict the likelihood of
nonappropriation of funds for these types of lease revenue Bonds.
Certain of the Bonds in the Trust Funds may be sales and/or use tax revenue
bonds whose revenues are derived from the proceeds of a special sales or use
tax. Such taxes are generally subject to continuing Legislature approval.
Payments may be adversely affected by reduction of revenues due to decreased
use of a facility or decreased sales.
Investors should be aware that many of the Bonds in the Trust Funds are
subject to continuing requirements such as the actual use of Bond proceeds or
manner of operation of the project financed from Bond proceeds that may affect
the exemption of interest on such Bonds from Federal income taxation. Although
at the time of issuance of each of the Bonds in the Trusts an opinion of bond
counsel was rendered as to the exemption of interest on such obligations from
Federal income taxation, there can be no assurance that the respective issuers
or other obligors on such obligations will fulfill the various continuing
requirements established upon issuance of the Bonds. A failure to comply with
such requirements may cause a determination that interest on such obligations
is subject to Federal income taxation, perhaps even retroactively from the
date of issuance of such Bonds, thereby reducing the value of the Bonds and
subjecting Unitholders to unanticipated tax liabilities.
Federal bankruptcy statutes relating to the adjustment of debts of political
subdivisions or authorities of states of the United States provide that, in
certain circumstances, such subdivisions or authorities may be authorized to
initiate bankruptcy proceedings without prior notice to or consent of
creditors, which proceedings could result in material and adverse modification
or alteration of the rights of holders of obligations issued by such
subdivisions or authorities.
Certain of the Bonds in the Trust Funds may represent "moral obligations" of a
governmental entity other than the issuer. In the event that the issue of a
Municipal Bond defaults in the repayment thereof, the governmental entity
lawfully may, but is not obligated to, discharge the obligation of the issuer
to repay such Municipal Bond.
STATE RISK FACTORS AND STATE TAX STATUS
None of the special counsel to the various Trust Funds has expressed any
opinion regarding the completeness or materiality of any matters contained in
this Prospectus other than the tax opinions set forth under "Federal Tax
Status." For risks specific to the individual Trusts, see "Risk Factors" for
each Trust.
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INSURED MICHIGAN SERIES 15
Risk Factors
Investors should be aware that the economy of the State of Michigan has, in
the past, proven to be cyclical, due primarily to the fact that the leading
sector of the State's economy is the manufacturing of durable goods. While the
State's efforts to diversity its economy have proven successful, as reflected
by the fact that the share of employment in the State in the durable goods
sector has fallen from 33.1 percent in 1960 to 17.9 percent in 1990, durable
goods manufacturing still represents a sizable portion of the State's economy.
As a result, any substantial national economic downturn is likely to have an
adverse effect on the economy of the State and on the revenues of the State
and some of its local governmental units.
In July 1995, Moody's Investors Service Inc. raised the State's general
obligation bond rating to "Aa". In October 1989, Standard & Poor's Ratings
Group raised its rating on the State's general obligation bonds to "AA".
The State's economy could continue to be affected by changes in the auto
industry, notably consolidation and plant closings resulting from competitive
pressures and over-capacity. Such actions could adversely affect State
revenues and the financial impact on the local units of government in the
areas in which plants are closed could be more severe. In addition, the State
is a party to various legal proceedings, some of which could, if unfavorably
resolved from the point of view of the State, substantially affect State
programs or finances.
In recent years, the State has reported its financial results in accordance
with generally accepted accounting principles. For the fiscal years ended
September 30, 1990 and 1991, the State reported negative year-end balances in
the General Fund/School Aid Fund of $310.4 million and $169.4 million,
respectively. The State ended each of the 1992, 1993, 1994 and 1995 fiscal
years with its General Fund/School Aid Fund in balance, after having made
substantial transfers to the Budget Stabilization Fund in 1993, 1994, and
1995. A positive cash balance in the combined General Fund/School Aid Fund was
recorded at September 30, 1990. In the 1991 through 1993 fiscal years, the
State experienced deteriorating cash balances which necessitated short-term
borrowing and the deferral of certain scheduled cash payments. The State did
not borrow for cash flow purposes in 1994, but borrowed $500 million on March
9, 1995, which was repaid on September 29, 1995 and $900 million on February
20, 1996, with a maturity date of September 30, 1996. The State's Budget
Stabilization Fund received transfers of $283 million in 1993, $464 million in
1994 and $320 million in 1995, bringing the balance in the Budget
Stabilization Fund after making certain transfers out, to $988 million at
September 30, 1995.
The Michigan Constitution of 1963 limits the amount of total revenues of the
State raised from taxes and certain other sources to a level for each fiscal
year equal to a percentage of the State's personal income for the prior
calendar year. In the event that the State's total revenues exceed the limit
by 1 percent or more, the Michigan Constitution of 1963 requires that the
excess be refunded to taxpayers.
On March 15, 1994, Michigan voters approved a school finance reform amendment
to the State's Constitution which, among other things, increased the State
sales tax rate from 4% to 6% and placed a cap on property assessment increases
for all property taxes. Concurrent legislation cut the State's income tax rate
from 4.6% to 4.4%, reduced some property taxes and altered local school
funding sources to a combination of property taxes and state revenues, some of
which is provided from other new or increased
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State taxes. The legislation also contained other provisions that alter (and
in some cases, may reduce) the revenues of local units of government, and tax
increment bonds could be particularly affected. While the ultimate impact of
the constitutional amendment and related legislation cannot yet be accurately
predicted, investors should be alert to the potential effect of such measures
upon the operations and revenues of Michigan local units of government.
In addition, the State Legislature recently adopted a package of state tax
cuts, including a phase out of the intangibles tax, an increase in exemption
amounts for personal income tax, and reductions in the single business tax.
Although all or most of the Bonds in the Trust are revenue obligations or
general obligations of local governments or authorities rather than general
obligations of the State of Michigan itself, there can be no assurance that
any financial difficulties the State may experience will not adversely affect
the market value or marketability of the Bonds or the ability of the
respective obligors to pay interest on or principal of the Bonds, particularly
in view of the dependency of local governments and other authorities upon
State aid and reimbursement programs and, in the case of bonds issued by the
State Building Authority, the dependency of the State Building Authority on
the receipt of rental payments from the State to meet debt service
requirements upon such bonds. In the 1991 fiscal year, the State deferred
certain scheduled cash payments to municipalities, school districts,
universities and community colleges. While such deferrals were made up at
specified later dates, similar future deferrals could have an adverse impact
on the cash position of some local governmental units. Additionally, the State
has reduced revenue sharing payments to municipalities below that level
provided under formulas by an increasing amount in each of the last five
fiscal years and by a budgeted amount of $81.26 million in the 1996 fiscal
year.
The Trust may contain general obligation bonds of local units of government
pledging the full faith and credit of the local unit which are payable from
the levy of ad valorem taxes on taxable property within the jurisdiction of
the local unit. Such bonds issued prior to December 22, 1978, or issued after
December 22, 1978 with the approval of the electors of the local unit, are
payable from property taxes levied without limitation as to rate or amount.
With respect to bonds issued after December 22, 1978, and which were not
approved by the electors of the local unit, the tax levy of the local unit for
debt service purposes is subject to constitutional, statutory and charter tax
rate limitations. In addition, several major industrial corporations have
instituted challenges of their ad valorem property tax assessments in a number
of local municipal units in the State. If successful, such challenges could
have an adverse impact on the ad valorem tax bases of such units which could
adversely affect their ability to raise funds for operation and debt service
requirements.
Michigan Tax Status
In the opinion of Miller, Canfield, Paddock and Stone, P.L.C. special counsel
to the Insured Michigan Series 15 (the "Insured Michigan Trust") for Michigan
tax matters, under existing Michigan law:
The Insured Michigan Trust and the owners of Units will be treated for
purposes of the Michigan income tax laws and the Single Business Tax in
substantially the same manner as they are for purposes of the Federal
income tax laws, as currently enacted. Accordingly, we have relied upon the
opinion of Chapman and Cutler as to the applicability of Federal income tax
under the Internal Revenue Code of 1986 to the Insured Michigan Trust and
the Unitholders.
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Under the income tax laws of the State of Michigan, the Insured Michigan
Trust is not an association taxable as a corporation; the income of the
Insured Michigan Trust will be treated as the income of the Unitholders and
be deemed to have been received by them when received by the Insured
Michigan Trust. Interest on the underlying Bonds which is exempt from tax
under these laws when received by the Insured Michigan Trust will retain
its status as tax exempt interest to the Unitholders.
For purposes of the foregoing Michigan tax laws, each Unitholder will be
considered to have received his pro rata share of Bond interest when it is
received by the Insured Michigan Trust, and each Unitholder will have a
taxable event when the Insured Michigan Trust disposes of a Bond (whether
by sale, exchange, redemption or payment at maturity) or when the
Unitholder redeems or sells his Unit to the extent the transaction
constitutes a taxable event for Federal income tax purposes. The tax cost
of each unit to a Unitholder will be established and allocated for purposes
of these Michigan tax laws in the same manner as such cost is established
and allocated for Federal income tax purposes.
Under the Michigan Intangibles Tax, the Insured Michigan Trust is not
taxable and the pro rata ownership of the underlying Bonds, as well as the
interest thereon, will be exempt to the Unitholders to the extent the
Insured Michigan Trust consists of obligations of the State of Michigan or
its political subdivisions or municipalities, or of obligations of the
Commonwealth of Puerto Rico, Guam or of the United States Virgin Islands.
The Intangibles Tax is being phased out, with reductions of twenty-five
percent (25%) in 1994 and 1995, fifty percent (50%) in 1996, and seventy-
five percent (75%) in 1997, with total repeal effective January 1, 1998.
The Michigan Single Business Tax replaced the tax on corporate and
financial institution income under the Michigan Income Tax, and the
Intangible Tax with respect to those intangibles of persons subject to the
Single Business Tax the income from which would be considered in computing
the Single Business Tax. Persons are subject to the Single Business Tax
only if they are engaged in "business activity", as defined in the Act.
Under the Single Business Tax, both interest received by the Insured
Michigan Trust on the underlying Bonds and any amount distributed from
Insured Michigan Trust to a Unitholder, if not included in determining
taxable income for Federal income tax purposes, is also not included in the
adjusted tax base upon which the Single Business Tax is computed, of either
the Insured Michigan Trust or the Unitholders. If the Insured Michigan
Trust or the Unitholders have a taxable event for Federal income tax
purposes when the Insured Michigan Trust disposes of a Bond (whether by
sale, exchange, redemption or payment at maturity) or the Unitholder
redeems or sells his Unit, an amount equal to any gain realized from such
taxable event which was included in the computation of taxable income for
Federal income tax purposes (plus an amount equal to any capital gain of an
individual realized in connection with such event but excluded in computing
that individual's Federal taxable income) will be included in the tax base
against which, after allocation, apportionment and other adjustments, the
Single Business Tax is computed. The tax base will be reduced by an amount
equal to any capital loss realized from such a taxable event, whether or
not the capital loss was deducted in computing Federal taxable income in
the year the loss occurred. Unitholders should consult their tax advisor as
to their status under Michigan law.
Any proceeds paid under an insurance policy issued to the Trustee of the
Trust, or paid under individual policies obtained by issuers of Bonds,
which, when received by the Unitholders, represent maturing interest on
defaulted obligations held by the Trustee, will be excludable from the
Michigan income tax laws and the Single Business Tax if, and to the same
extent as, such interest would have been so excludable if paid by the
issuer of the defaulted obligations. While treatment under the
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Michigan Intangibles Tax is not premised upon the characterization of such
proceeds under the Internal Revenue Code, the Michigan Department of
Treasury should adopt the same approach as under the Michigan income tax
laws and the Single Business Tax.
As the Tax Reform Act of 1986 eliminates the capital gain deduction for tax
years beginning after December 31, 1986, the federal adjusted gross income,
the computation base for the Michigan Income Tax, of a Unitholder will be
increased accordingly to the extent such capital gains are realized when
the Insured Michigan Trust disposes of a Bond or when the Unitholder
redeems or sells a Unit, to the extent such transaction constitutes a
taxable event for Federal income tax purposes.
For a discussion of Federal tax matters relating to distributions from the
Trust Fund, see "Federal Tax Status."
INSURANCE ON THE BONDS
All Municipal Bonds in the portfolios of the Insured Trusts are insured as to
the scheduled payment of interest and principal by the issuer or the Sponsor
from MBIA Insurance Corporation ("MBIA Corporation") or other insurers. See
"Portfolios" and the Notes thereto. The premium for any insurance policy or
policies obtained by an issuer of Municipal Bonds or the Sponsor has been paid
in advance by such issuer or the Sponsor and any such policy or policies are
non-cancellable and will remain in force so long as the Municipal Bonds so
insured are outstanding and the insurer and/or insurers thereof remain in
business. Where Municipal Bond insurance is obtained by the issuer or the
Sponsor directly from MBIA Corporation or another insurer, no premiums for
insurance are paid by an Insured Trust Fund. If the provider of an original
issuance insurance policy is unable to meet its obligations under such policy
or if the rating assigned to the claims-paying ability of any such insurer
deteriorates, no other insurer has an obligation to insure any issue adversely
affected by either of the above described events.
The aforementioned insurance guarantees the scheduled payment of principal and
interest on all of the Municipal Bonds in an Insured Trust Fund. It does not
guarantee the market value of the Municipal Bonds or the value of the Units of
the Insured Trust Fund. Insurance obtained by the issuer of a Municipal Bond
or the Sponsor is effective so long as the Bond is outstanding, whether or not
held by an Insured Trust Fund. Therefore, any such insurance may be considered
to represent an element of market value in regard to the Bonds thus insured,
but the exact effect, if any, of this insurance on such market value cannot be
predicted.
Financial Guaranty Insurance Company. Financial Guaranty is a wholly-owned
subsidiary of FGIC Corporation (the "Corporation"), a Delaware holding
company. The Corporation is a wholly-owned subsidiary of General Electric
Capital Corporation ("GECC"). Neither the Corporation nor GECC is obligated to
pay the debts or the claims against Financial Guaranty. Financial Guaranty is
domiciled in the State of New York and is subject to regulation by the State
of New York Insurance Department. As of December 31, 1995, the total capital
and surplus of Financial Guaranty was approximately $1,000,520,000. Copies of
Financial Guaranty's financial statements, prepared on the basis of statutory
accounting principles, and the Corporation's financial statements, prepared on
the basis of generally accepted accounting principles, may be obtained by
writing to Financial Guaranty at 115 Broadway, New York, New York 10006,
Attention: Communications Department (telephone number is (212) 312-
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3000) or to the New York State Insurance Department at 160 West Broadway, 18th
Floor, New York, New York 10013, Attention: Property Companies Bureau
(telephone number (212) 621-0389).
In addition, Financial Guaranty Insurance Company is currently authorized to
write insurance in all 50 states and the District of Columbia.
The information relating to Financial Guaranty contained above has been
furnished by such corporation. The financial information contained herein with
respect to such corporation is unaudited but appears in reports or other
materials filed with state insurance regulatory authorities and is subject to
audit and review by such authorities. No representation is made herein as to
the accuracy or adequacy of such information or as to the absence of material
adverse changes in such information subsequent to the date thereof but the
Sponsor is not aware that the information herein is inaccurate or incomplete.
AMBAC Indemnity Corporation. AMBAC Indemnity Corporation ("AMBAC") is a
Wisconsin-domiciled stock insurance company, regulated by the Office of the
Commissioner of Insurance of the State of Wisconsin, and licensed to do
business in 50 states, the District of Columbia and the Commonwealth of Puerto
Rico, with admitted assets (unaudited) of approximately $2,145,000,000 and
statutory capital (unaudited) of approximately $782,000,000 as of December 31,
1994. Statutory capital consists of AMBAC policyholders' surplus and statutory
contingency reserve. AMBAC is a wholly owned subsidiary of AMBAC Inc., a 100%
publicly-held company. Moody's Investors Service, Inc. and Standard & Poor's
have both assigned a AAA claims-paying ability rating to AMBAC. Copies of
AMBAC's financial statements prepared in accordance with statutory accounting
standards are available from AMBAC. The address of AMBAC's administrative
offices and its telephone number are One State Street Plaza, 17th Floor, New
York, New York 10004 and (212) 668-0340. AMBAC has entered into quota share
reinsurance agreements under which a percentage of the insurance underwritten
pursuant to certain municipal bond insurance programs of AMBAC has been and
will be assumed by a number of foreign and domestic unaffiliated reinsurers.
MBIA Insurance Corporation. MBIA Insurance Corporation ("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 the Northern Mariana Islands, the
Commonwealth of Puerto Rico, the Virgin Islands of the United States and the
Territory of Guam.
As of December 31, 1995, MBIA, Inc. had admitted assets of $3.8 billion
(audited), total liabilities of $2.5 billion (audited), and total capital and
surplus of $1.3 billion (audited) determined in accordance with statutory
accounting practices prescribed or permitted by insurance regulatory
authorities. Standard & Poor's has rated the claims paying ability of MBIA,
Inc. "AAA". 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 has ceded all of its net
insured
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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 bond issues insured by MBIA, Inc. "Aaa"
and short-term loans "MIG1," both designated to be of the highest quality.
Standard & Poor's rates all new issues insured by MBIA, Inc. "AAA."
Financial Security Assurance. Financial Security Assurance ("Financial
Security" or "FSA") is a monoline insurance company incorporated on March 16,
1984 under the laws of the State of New York. The operations of Financial
Security commenced on July 25, 1985, and Financial Security received its New
York State insurance license on September 23, 1985. Financial Security and its
two wholly owned subsidiaries are licensed to engage in financial guaranty
insurance business in 49 states, the District of Columbia and Puerto Rico.
Financial Security and its subsidiaries are engaged exclusively in the
business of writing financial guaranty insurance, principally in respect of
asset-backed and other collateralized securities offered in domestic and
foreign markets. Financial Security and its subsidiaries also write financial
guaranty insurance in respect of municipal and other obligations and reinsure
financial guaranty insurance policies written by other leading insurance
companies. In general, financial guaranty insurance consists of the issuance
of a guaranty of scheduled payments of an issuer's securities, thereby
enhancing the credit rating of these securities, in consideration for payment
of a premium to the insurer.
Financial Security is approximately 91.6% owned by U S West, Inc. and 8.4%
owned by The Tokio Marine and Fire Insurance Co., Ltd. ("Tokio Marine").
Neither U S West, Inc. nor Tokio Marine is obligated to pay the debts of or
the claims against Financial Security. Financial Security is domiciled in the
State of New York and is subject to regulation by the State of New York
Insurance Department.
As of March 31, 1993, the total policyholders' surplus and contingency
reserves and the total unearned premium reserve, respectively, of Financial
Security and its consolidated subsidiaries were, in accordance with statutory
accounting principles, approximately $479,110,000 (unaudited) and $220,078,000
(unaudited), and the total shareholders' equity and the unearned premium
reserve, respectively, of Financial Security and its consolidated subsidiaries
were, in accordance with generally accepted accounting principles,
approximately $628,119,000 (unaudited) and $202,493,000 (unaudited).
Copies of Financial Security's financial statements may be obtained by writing
to Financial Security at 350 Park Avenue, New York, New York, 10022, Attention
Communications Department. Financial Security's telephone number is (212) 826-
0100.
Pursuant to an intercompany agreement, liabilities on financial guaranty
insurance written by Financial Security or either of its subsidiaries are
reinsured among such companies at an agreed-upon percentage substantially
proportional to their respective capital, surplus and reserves, subject to
applicable statutory risk limitations. In addition, Financial Security
reinsures a portion of its liabilities under certain of its financial guaranty
insurance policies with unaffiliated reinsurers under various quota share
treaties and on a transaction-by-transaction basis. Such reinsurance is
utilized by Financial Security as a risk management device and to comply with
certain statutory and rating agency requirements; it does not alter or limit
Financial Security's obligations under any financial guaranty insurance
policy.
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Financial Security's claims-paying ability is rated "Aaa" by Moody's Investors
Service, Inc., and "AAA" by Standard & Poor's, Nippon Investors Service Inc.,
Duff & Phelps Inc. and Australian Ratings Pty. Ltd. Such ratings reflect only
the views of the respective rating agencies, are not recommendations to buy,
sell or hold securities and are subject to revision or withdrawal at any time
by such rating agencies.
Capital Guaranty Insurance Company. Capital Guaranty Insurance Company
("Capital Guaranty" or "CGIC") is a "Aaa/AAA" rated monoline stock insurance
company incorporated in the State of Maryland, and is a wholly owned
subsidiary of Capital Guaranty Corporation, a Maryland insurance holding
company. Capital Guaranty Corporation is a publicly owned company whose shares
are traded on the New York Stock Exchange.
Capital Guaranty Insurance Company is authorized to provide insurance in all
50 states, the District of Columbia, the Commonwealth of Puerto Rico, Guam and
the U.S. Virgin Islands. Capital Guaranty focuses on insuring municipal
securities and provides policies which guaranty the timely payment of
principal and interest when due for payment on new issue and secondary market
issue municipal bond transactions. Capital Guaranty's claims-paying ability is
rated "Triple-A" by both Moody's and Standard & Poor's.
As of September 30, 1995, Capital Guaranty had more than $19.0 billion in net
exposure outstanding (excluding defeased issues). The total statutory
policyholders' surplus and contingency reserve of Capital Guaranty was
$204,642,000 and the total admitted assets were $326,802,226 as reported to
the Insurance Department of the State of Maryland as of September 30, 1995.
Financial statements for Capital Guaranty Insurance Company, that have been
prepared in accordance with statutory insurance accounting standards, are
available upon request. The address of Capital Guaranty's headquarters is
Steuart Tower, 22nd Floor, One Market Plaza, San Francisco, CA 94105-1413 and
the telephone number is (415) 995-8000.
Chapman and Cutler, counsel for the Sponsor, has given an opinion to the
effect that the payment of insurance proceeds representing maturing interest
on defaulting municipal obligations paid by Financial Guaranty or another
insurer would be excludable from Federal gross income if, and to the same
extent as, such interest would have been so excludable if paid by the issuer
of the defaulted obligations. See "Federal Tax Status."
FEDERAL TAX STATUS
All Municipal Bonds deposited in the Trust Fund will be accompanied by copies
of opinions of bond counsel to the issuers thereof, given at the time of
original delivery of the Municipal Bonds, to the effect that the interest
thereon is excludable from gross income for Federal income tax purposes. In
connection with the offering of Units of the Trust Fund, neither the Sponsor,
the Trustee, the auditors nor their respective counsel have made any review of
the proceedings relating to the issuance of the Municipal Bonds or the basis
for such opinions.
In the opinion of Chapman and Cutler, counsel for the Sponsor, under existing
law:
The Trust Fund is not an association taxable as a corporation for Federal
income tax purposes and interest and accrued original issue discount on
Bonds which is excludable from gross income under the Internal Revenue Code
of 1986, as amended (the "Code") will retain its status when distributed to
Unitholders; however, such interest may be taken into account in computing
the alternative
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minimum tax, an additional tax on branches of foreign corporations and the
environmental tax (the "Superfund Tax"), as noted below.
Each Unitholder is considered to be the owner of a pro rata portion of each
asset of the respective Trust Fund under subpart E, subchapter J of chapter
1 of the Code and will have a taxable event when such Trust Fund disposes
of a Bond, or when the Unitholder redeems or sells his Units. Unitholders
must reduce the tax basis of their Units for their share of accrued
interest received by a Trust Fund, if any, on Bonds delivered after the
date the Unitholders pay for their Units to the extent that such interest
accrued on such Bonds during the period from the Unitholder's settlement
date to the date such Bonds are delivered to a Trust Fund and,
consequently, such Unitholders may have an increase in taxable gain or
reduction in capital loss upon the disposition of such Units. Gain or loss
upon the sale or redemption of Units is measured by comparing the proceeds
of such sale or redemption with the adjusted basis of the Units. If the
Trustee disposes of Bonds (whether by sale, payment on maturity, redemption
or otherwise), gain or loss is recognized to the Unitholder (subject to
various non-recognition provisions of the Code). The amount of any such
gain or loss is measured by comparing the Unitholder's pro rata share of
the total proceeds from such disposition with the Unitholder's basis for
his or her fractional interest in the asset disposed of. In the case of a
Unitholder who purchases Units, such basis (before adjustment for earned
original issue discount and amortized bond premium, if any) is determined
by apportioning the cost of the Units among each of the Trust Fund's assets
ratably according to value as of the valuation date nearest the date of
acquisition of the Units. The tax basis 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 insurance proceeds paid under individual policies obtained by issuers
of Bonds which represent maturing interest on defaulted Bonds held by the
Trustee will be excludable from Federal gross income if, and to the same
extent as, such interest would have been so excludable if paid in the
normal course by the issuer of the defaulted Bonds provided that, at the
time such policies are purchased, the amounts paid for such policies are
reasonable, customary and consistent with the reasonable expectation that
the issuer of the Bonds, rather than the insurer, will pay debt service on
the Bonds.
Sections 1288 and 1272 of the Code provide a complex set of rules governing
the accrual of original issue discount. These rules provide that original
issue discount accrues either on the basis of a constant compound interest
rate or ratably over the term of the Municipal Bond, depending on the date the
Municipal Bond was issued. In addition, special rules apply if the purchase
price of a Municipal Bond exceeds the original issue price plus the amount of
original issue discount which would have previously accrued based upon its
issue price (its "adjusted issue price") to prior owners. The application of
these rules will also vary depending on the value of the Municipal Bond on the
date a Unitholder acquires his Units, and the price the Unitholder pays for
his Units. Unitholders should consult with their tax advisers regarding these
rules and their application.
The Revenue Reconciliation Act of 1993 (the "Tax Act") subjects tax-exempt
bonds to the market discount rules of the Code effective for bonds purchased
after April 30, 1993. In general, market discount is the amount (if any) by
which the stated redemption price at maturity exceeds an investor's purchase
price (except to the extent that such difference, if any, is attributable to
original issue discount not yet accrued) subject to a statutory de minimis
rule. Market discount can arise based on the price a Trust Fund
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pays for Municipal Bonds or the price a Unitholder pays for his or her Units.
Under the Tax Act, accretion of market discount is taxable as ordinary income;
under prior law the accretion had been treated as capital gain. Market
discount that accretes while a Trust Fund holds a Municipal Bond would be
recognized as ordinary income by the Unitholders when principal payments are
received on the Municipal Bond, upon sale or at redemption (including early
redemption), or upon the sale or redemption of his or her Units, unless a
Unitholder elects to include market discount in taxable income as it accrues.
The market discount rules are complex and Unitholders should consult their tax
advisers regarding these rules and their application.
In the case of certain corporations, the alternative minimum tax and the
Superfund Tax for taxable years beginning after December 31, 1986 depends upon
the corporation's alternative minimum taxable income, which is the
corporation's taxable income with certain adjustments. One of the adjustment
items used in computing the alternative minimum taxable income and the
Superfund Tax of a corporation (other than an S Corporation, Regulated
Investment Company, Real Estate Investment Trust, or REMIC) is an amount equal
to 75% of the excess of such corporation's "adjusted current earnings" over an
amount equal to its alternative minimum taxable income (before such adjustment
item and the alternative tax net operating loss deduction). "Adjusted current
earnings" includes all tax-exempt interest, including interest on all of the
Bonds in a Trust Fund. Under the provisions of Section 884 of the Code, a
branch profits tax is levied on the "effectively connected earnings and
profits" of certain foreign corporations which includes tax-exempt interest
such as interest on the Bonds in the Trust Fund. Under current Code
provisions, the Superfund Tax does not apply to tax years beginning on or
after January 1, 1996. However, the Superfund Tax could be extended
retroactively. Unitholders should consult their tax advisers with respect to
the particular tax consequences to them including the corporate alternative
minimum tax, the Superfund Tax and the branch profits tax imposed by Section
884 of the Code.
Counsel for the Sponsor has also advised that under Section 265 of the Code,
interest on indebtedness incurred or continued to purchase or carry Units of a
Trust Fund is not deductible for Federal income tax purposes. The Internal
Revenue Service has taken the position that such indebtedness need not be
directly traceable to the purchase or carrying of Units (however, these rules
generally do not apply to interest paid on indebtedness incurred to purchase
or improve a personal residence). Also, under Section 265 of the Code, certain
financial institutions that acquire Units would generally not be able to
deduct any of the interest expense attributable to ownership of such Units. On
December 7, 1995 the U.S. Treasury Department released proposed legislation
that, if enacted, would generally extend the financial institution rules to
all corporations, effective for obligations acquired after the date of
announcement. Investors with questions regarding these issues should consult
with their tax advisers.
In the case of certain Municipal Bonds in a Trust Fund, the opinions of bond
counsel indicate that interest on such Municipal Bonds received by a
"substantial user" of the facilities being financed with the proceeds of these
Municipal Bonds or persons related thereto, for periods while such Municipal
Bonds are held by such a user or related person, will not be excludable from
Federal gross income, although interest on such Municipal Bonds received by
others would be excludable from Federal gross income. "Substantial user" and
"related person" are defined under the Code and U.S. Treasury Regulations. Any
person who believes that he or she may be a "substantial user" or a "related
person" as so defined should contact his or her tax adviser.
In the case of corporations, the alternative tax rate applicable to long-term
capital gains is 35% effective for long-term capital gains realized in taxable
years beginning on or after January 1, 1993. For taxpayers other than
corporations, net capital gains are subject to a maximum marginal stated tax
rate of 28%.
TAX-EXEMPT PORTFOLIOS
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<PAGE>
However, it should be noted that legislative proposals are introduced from
time to time that affect tax rates and could affect relative differences at
which ordinary income and capital gains are taxed. Under the Code, taxpayers
must disclose to the Internal Revenue Service the amount of tax-exempt
interest earned during the year.
All statements of law in the Prospectus concerning exclusion from gross income
for Federal, state or other tax purposes are the opinions of counsel and are
to be so construed.
At the respective times of issuance of the Bonds, opinions relating to the
validity thereof and to the exclusion of interest thereon from Federal gross
income are rendered by bond counsel to the respective issuing authorities.
Neither the Sponsor nor Chapman and Cutler has made any special review for the
Trust Fund of the proceedings relating to the issuance of the Bonds or of the
basis for such opinions.
Section 86 of the Code, in general, provides that fifty percent of Social
Security benefits are includible in gross income to the extent that the sum of
"modified adjusted gross income" plus fifty percent of the Social Security
benefits received exceeds a "base amount". The base amount is $25,000 for
unmarried taxpayers, $32,000 for married taxpayers filing a joint return and
zero for married taxpayers who do not live apart at all times during the
taxable year and who file separate returns. Modified adjusted gross income is
adjusted gross income determined without regard to certain otherwise allowable
deductions and exclusions from gross income and by including tax-exempt
interest. To the extent that Social Security benefits are includible in gross
income, they will be treated as any other item of gross income.
In addition, under the Tax Act, for taxable years beginning after December 31,
1993, up to 85 percent of Social Security benefits are includible in gross
income to the extent that the sum of "modified adjusted gross income" plus
fifty percent of Social Security benefits received exceeds an "adjusted base
amount." The adjusted base amount is $34,000 for unmarried taxpayers, $44,000
for married taxpayers filing a joint return and zero for married taxpayers who
do not live apart at all times during the taxable year and who file separate
returns.
Although tax-exempt interest is included in modified adjusted gross income
solely for the purpose of determining what portion, if any, of Social Security
benefits will be included in gross income, no tax-exempt interest, including
that received from the Trust Fund, will be subject to tax. A taxpayer whose
adjusted gross income already exceeds the base amount or the adjusted base
amount must include 50% or 85%, respectively, of his or her Social Security
benefits in gross income whether or not he or she receives any tax-exempt
interest. A taxpayer whose modified adjusted gross income (after inclusion of
tax-exempt interest) does not exceed the base amount need not include any
Social Security benefits in gross income.
Ownership of the Units may result in collateral federal income tax
consequences to certain taxpayers, including, without limitation, corporations
subject to either the environmental tax or the branch profits tax, financial
institutions, certain insurance companies, certain S corporations, individual
recipients of Social Security or Railroad Retirement benefits and taxpayers
who may be deemed to have incurred (or continued) indebtedness to purchase or
carry tax-exempt obligations. Prospective investors should consult their tax
advisors as to the applicability of any collateral consequences. On December
7, 1995, the U.S. Treasury Department released proposed legislation that, if
adopted, could affect the United States federal income taxation of non-United
States Unitholders and the portion of the Trusts' income allocable to non-
United States Unitholders. Similar language, which would be effective on the
date of enactment, was included in the Health Insurance Reform Bill as passed
by the U.S. Senate on April 23, 1996.
TAX-EXEMPT PORTFOLIOS
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<PAGE>
For a discussion of the state tax status of income earned on Units of a state
trust, see the discussion of tax status for the applicable trust. Except as
noted therein, the exemption of interest on state and local obligations for
Federal income tax purposes discussed above does not necessarily result in
exemption under the income or other tax laws of any state or city. The laws of
the several states vary with respect to the taxation of such obligations.
TAX REPORTING AND REALLOCATION
Because the Trust receives interest and makes monthly distributions based upon
such Trust's expected total collections of interest and any anticipated
expenses, certain tax reporting consequences may arise. The Trust is required
to report Unitholder information to the Internal Revenue Service ("IRS"),
based upon the actual collection of interest by such Trust on the securities
in such Trust, without regard to such Trust's expenses or to such Trust's
payments to Unitholders during the year. If distributions to Unitholders
exceed interest collected, the difference will be reported as a return of
principal which will reduce a Unitholder's cost basis in its Units (and its
pro rata interest in the securities in the Trust). A Unitholder must include
in taxable income the amount of income reported by a Trust to the IRS
regardless of the amount distributed to such Unitholder. If a Unitholder's
share of taxable income exceeds income distributions made by a Trust to such
Unitholder, such excess is in all likelihood attributable to the payment of
miscellaneous expenses of such Trust which will not be deductible by an
individual Unitholder as an itemized deduction except to the extent that the
total amount of certain itemized deductions, such as investments expenses
(which would include the Unitholder's share of Trust expenses), tax return
preparation fees and employee business expenses, exceeds 2% of such
Unitholder's adjusted gross income. Alternatively, in certain cases, such
excess may represent an increase in the Unitholder's tax basis in the Units
owned. Investors with questions regarding these issues should consult with
their tax advisers.
TAX-EXEMPT PORTFOLIOS
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<PAGE>
UNDERWRITING
The Underwriters named below have severally purchased Units of the Trusts in
the following respective amounts:
<TABLE>
<CAPTION>
INSURED
INSURED MICHIGAN
NATIONAL SERIES
FIRM NAME SERIES 20 15
--------- --------- --------
<S> <C> <C>
*EVEREN Unit Investment Trusts............................... 270,000 159,000
*EVEREN Securities, Inc...................................... 50,000 50,000
Advest, Inc.................................................. 10,000
City Securities Corp......................................... 10,000
First of Michigan Corporation................................ 10,000
Gruntal & Co., Inc........................................... 10,000
Nathan & Lewis Securities, Inc............................... 10,000
Peacock, Hislop, Stanley & Given, In......................... 10,000
Pershing..................................................... 10,000
Primevest Financial Inc...................................... 25,000
Roney & Co................................................... 10,000 10,000
Southwest Securities, Inc.................................... 10,000
Stifel Nicolaus & Co., Inc................................... 10,000
------- -------
TOTAL UNITS:................................................. 410,000 254,000
======= =======
</TABLE>
Underwriter Addresses:
*EVEREN Unit Investment Trusts, a service of EVEREN Securities, Inc., 77 West
Wacker Drive, 29th Floor, Chicago, IL 60601-1994
*EVEREN Securities, Inc., 77 West Wacker Drive, 28th Floor, Chicago, IL 60601-
1994
Advest, Inc., 90 State House Square, 6th Floor, Hartford, CT 06103
City Securities Corp., 135 N. Pennsylvania, Suite #2200, Indianapolis, IN
46204
First of Michigan Corporation, 100 Renaissance Center, 26th Floor, Detroit, MI
48243
Gruntal & Co., Inc., 14 Wall Street, 14th Floor, New York, NY 10005
Nathan & Lewis Securities, Inc., 1140 6th Avenue, 4th Floor, New York, NY
10036
Peacock, Hislop, Stanley & Given, Inc., 721 Olive Street, Suite 316, St.
Louis, MO 53101
Pershing, One Pershing Plaza, 7th Floor, Jersey City, NJ 07399
Primevest Financial Services, 400 1st Street South, Suite 300, St. Cloud, MN
56301
Roney & Co., One Griswold Street, 8th Floor, UITs, Detroit, MI 48226
Southwest Securities, Inc., 1201 Elm Street, Suite 4300, Dallas, TX 75270
Stifel Nicolaus & Co., Inc., 500 North Broadway, St. Louis, MO 63102
- ------------------
*EVEREN Capital Corporation owns or has a controlling interest in EVEREN Unit
Investment Trusts (the Trusts' Sponsor and Evaluator) and EVEREN Securities,
Inc. EVEREN Unit Investment Trusts is a service of EVEREN Securities, Inc. For
additional information about the Underwriters, see "Underwriting."
Notwithstanding anything to contrary set forth below, the amount of the
Underwriters' takedown for Insured National Series 20 is $.39 for all firms
committing for at least 10,000 Units.
The Underwriters acquired the Units of the Trust Funds at a price per Unit
equal to the Public Offering Prices set forth under "Essential Information"
less the Underwriters' takedown. The amount of the Underwriters' takedown for
Trusts with a weighted average maturity less than 7.5 years for each Unit is
$.22 for those firms committing for 10,000 to 24,999 Units, $.22 plus 50% of
any net portfolio profit for those firms committing for 25,000 to 99,999 Units
and $.23 plus 50% of any net portfolio profit for those firms committing for
100,000 or more Units. The amount of the Underwriters' takedown for Trusts
with a weighted average maturity between 7.5 and 9.99 years for each Unit is
$.28 for those firms committing for 10,000 to 24,999 Units, $.28 plus 50% of
any net portfolio profits for those firms committing for 25,000 to 49,999
Units, $.29 plus 50% of any net portfolio profit for those firms committing
for 50,000
TAX-EXEMPT PORTFOLIOS
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<PAGE>
to 99,999 Units and $.30 plus 50% of any net portfolio profit for those firms
committing for 100,000 or more Units. The amount of the Underwriters' takedown
for Trusts with a weighted average maturity 10 to 14.99 years for each Unit is
$.30 for those firms committing for 10,000 to 24,999 Units, $.30 plus 50% of
any net portfolio profits for those firms committing for 25,000 to 49,999
Units, $.31 plus 50% of any net portfolio profit for those firms committing for
50,000 to 99,999 Units and $.32 plus 50% of any net portfolio profit for those
firms committing for 100,000 or more Units. The amount of the Underwriters'
takedown for Trusts with a weighted average maturity greater than 14.99 years
for each Unit is $.36 for 10,000 to 24,999 Units, $.36 plus 50% of any net
portfolio profit for those firms committing for 25,000 to 49,999 Units, $.37
plus 50% of any net portfolio profit for those firms committing for 50,000 to
99,999 Units and $.38 plus 50% of any net portfolio profit for those firms
committing for 100,000 or more Units. In connection with any quantity discounts
(see "Public Offering of Units--Public Offering Price"), the Sponsor and the
applicable Underwriter will each receive reduced concessions as a result of the
reduced sales charges to the investor. 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 who underwrite additional Units
of a Trust or who sell, during a specified time period, a minimum dollar amount
of Units of a Trust and other unit investment trusts underwritten by the
Sponsor. The Underwriting Agreement provides that the Sponsor will select and
purchase the Municipal Bonds for deposit in the Trust Funds on its own behalf
and on behalf of the other Underwriters.
The Underwriting Agreement provides that a public offering of the Units of the
Trust Funds will be made by the Underwriters at the Public Offering Price
described in the Prospectus. Units may also be sold to or through dealers, who
are members of the National Association of Securities Dealers, Inc., and others
at prices representing discounts from the Public Offering Price. However,
resales of Units of the Trust Funds to the public will be made at the Public
Offering Price thereof.
Underwriters and broker-dealers of the Trusts, banks and/or others are eligible
to participate in a program in which such firms receive from the Sponsor a
nominal award for each of their representatives who have sold a minimum number
of Units of unit investment trusts created by the Sponsor during a specified
time period. In addition, at various times the Sponsor may implement other
programs under which the sales forces of Underwriters, brokers, dealers, banks
and/or others may be eligible to win other nominal awards for certain sales
efforts, or under which the Sponsor will reallow to any such Underwriters,
brokers, dealers, banks and/or others that sponsor sales contests or
recognition programs conforming to criteria established by the Sponsor, or
participate in sales programs sponsored by the Sponsor, an amount not exceeding
the total applicable sales charges on the sales generated by such persons at
the public offering price during such programs. Also, the Sponsor in its
discretion may from time to time pursuant to objective criteria established by
the Sponsor pay fees to qualifying underwriters, brokers, dealers, banks or
others for certain services or activities which are primarily intended to
result in sales of Units of the Trusts. Such payments are made by the Sponsor
out of its own assets, and not out of the assets of the Trusts. These programs
will not change the price Unitholders pay for their Units or the amount that
the Trusts will receive from the Units sold. Approximately every eighteen
months the Sponsor holds a business seminar which is open to Underwriters that
sell units of trusts it sponsors. The Sponsor pays substantially all costs
associated with the seminar, excluding Underwriter travel costs. Each
Underwriter is invited to send a certain number of representatives based on the
gross number of units such firm underwrites during a designated time period.
ESTIMATED CASH FLOWS TO UNITHOLDERS
The tables below set forth the estimated monthly distributions of interest and
principal to Unitholders on a per Unit basis. The tables assume no changes in
expenses, no changes in the current interest rates, no exchanges, redemptions,
sales or prepayments of the underlying Securities prior to maturity or expected
TAX-EXEMPT PORTFOLIOS
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<PAGE>
retirement date and the receipt of principal upon maturity or expected
retirement date. To the extent the foregoing assumptions change actual
distributions will vary.
INSURED NATIONAL SERIES 20
Monthly
<TABLE>
<CAPTION>
ESTIMATED ESTIMATED ESTIMATED
INTEREST PRINCIPAL TOTAL
DATES DISTRIBUTION DISTRIBUTION DISTRIBUTION
---------------------------- ------------ ------------ ------------
<S> <C> <C> <C>
Aug 15, 1996 $0.00762 $0.00762
Sep 15, 1996 to Apr 15, 2006 $0.04570 $0.04570
May 15, 2006 $0.04570 $1.21951 $1.26521
Jun 15, 2006 to Jun 15, 2021 $0.03970 $0.03970
Jul 15, 2021 $0.03970 $1.21951 $1.25921
Aug 15, 2021 to Jun 15, 2022 $0.03390 $0.03390
Jul 15, 2022 $0.03390 $0.24390 $0.27780
Aug 15, 2022 to Nov 15, 2022 $0.03390 $0.03390
Dec 15, 2022 $0.03091 $1.21951 $1.25042
Jan 15, 2023 to Jun 15, 2023 $0.02810 $0.02810
Jul 15, 2023 $0.02810 $1.21951 $1.24761
Aug 15, 2023 to Jun 15, 2026 $0.02270 $0.02270
Jul 15, 2026 $0.02270 $1.21951 $1.24221
Aug 15, 2026 to Sep 15, 2026 $0.01710 $0.01710
Oct 15, 2026 $0.01710 $1.21951 $1.23661
Nov 15, 2026 $0.01120 $0.01120
Dec 15, 2026 $0.01120 $1.21951 $1.23071
Jan 15, 2027 to Feb 15, 2027 $0.00530 $0.00530
Mar 15, 2027 $0.00530 $1.21951 $1.22481
</TABLE>
INSURED MICHIGAN SERIES 15
Monthly
<TABLE>
<CAPTION>
ESTIMATED ESTIMATED ESTIMATED
INTEREST PRINCIPAL TOTAL
DATES DISTRIBUTION DISTRIBUTION DISTRIBUTION
---------------------------- ------------ ------------ ------------
<S> <C> <C> <C>
Aug 15, 1996 $0.00747 $0.00747
Sep 15, 1996 to Apr 15, 2006 $0.04485 $0.04485
May 15, 2006 $0.04485 $0.98425 $1.02910
Jun 15, 2006 to Mar 15, 2014 $0.04005 $0.04005
Apr 15, 2014 $0.04005 $0.55118 $0.59123
May 15, 2014 to Apr 15, 2016 $0.03775 $0.03775
May 15, 2016 $0.03775 $0.19685 $0.23460
Jun 15, 2016 to Apr 15, 2021 $0.03775 $0.03775
May 15, 2021 $0.03775 $1.96850 $2.00625
Jun 15, 2021 to Apr 15, 2022 $0.02915 $0.02915
May 15, 2022 $0.02915 $1.37795 $1.40710
Jun 15, 2022 to Apr 15, 2024 $0.02275 $0.02275
May 15, 2024 $0.02275 $1.96850 $1.99125
Jun 15, 2024 to Feb 15, 2025 $0.01335 $0.01335
Mar 15, 2025 $0.01099 $0.98425 $0.99524
Apr 15, 2025 to Nov 15, 2025 $0.00875 $0.00875
Dec 15, 2025 $0.00393 $1.96850 $1.97243
</TABLE>
TAX-EXEMPT PORTFOLIOS
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<PAGE>
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GENERAL INFORMATION
RATING OF UNITS
Standard & Poor's has rated the Units of any U.S. Treasury Portfolio Series or
GNMA Portfolio Series "AAA." Because the Securities in an Insured Trust Fund
in a Tax-Exempt Portfolio Series or an Insured Corporate Series 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 the insurance companies
referred to in "Insurance on the Bonds" for each such Trust, Standard & Poor's
has also rated the Units of any Insured Trust Fund "AAA." This is the highest
rating assigned by Standard & Poor's. Standard & Poor's has been compensated
by the Sponsor for its services in rating Units of the Trust Funds.
A Standard & Poor's rating (as described by Standard & Poor's) on the units of
an investment trust (hereinafter referred to collectively as "units" or
"trust") is a current assessment of creditworthiness with respect to the
investments held by such trust. This assessment takes into consideration the
financial capacity of the issuers and of any guarantors, insurers, lessees, or
mortgagors with respect to such investments. The assessment, however, does not
take into account the extent to which trust expenses or portfolio asset sales
for less than the trust's purchase price will reduce payment to the Unitholder
of the interest and principal required to be paid on the portfolio assets. In
addition, the rating is not a recommendation to purchase, sell, or hold units,
inasmuch as the rating does not comment as to market price of the units or
suitability for a particular investor.
Trusts rated "AAA" are composed exclusively of assets that are rated "AAA" by
Standard & Poor's or have, in the opinion of Standard & Poor's, credit
characteristics comparable to assets rated "AAA," or certain short-term
investments. Standard & Poor's defines its "AAA" rating for such assets as the
highest rating assigned by Standard & Poor's to a debt obligation. Capacity to
pay interest and repay principal is very strong.
Securities in an Insured Trust Fund for which insurance has been obtained by
the Issuer or the Sponsor (all of which were rated "AAA" by Standard & Poor's
and/or "Aaa" by Moody's Investors Service, Inc.) may or may not have a higher
yield than uninsured Securities rated "AAA" by Standard & Poor's or "Aaa" by
Moody's Investors Service, Inc. In selecting Securities for the portfolios of
an Insured Trust Fund, the Sponsor has applied the criteria hereinbefore
described.
TRUST INFORMATION
Because certain of the Securities in certain of the Trusts 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 Security. In the event of a failure
to deliver any Security that has been purchased for a Trust under a contract,
including those securities purchased on a "when, as and if issued" basis
("Failed Securities"), the Sponsor is authorized under the Trust Agreement to
direct the Trustee to acquire other securities ("Replacement Securities") to
make up the original corpus of such Trust.
Securities in certain of the Trust Funds may have been purchased on a "when,
as and if issued" or delayed delivery basis with delivery expected to take
place after the First Settlement Date. See "Notes to Portfolios" for each
Trust. Accordingly, the delivery of such Securities may be delayed or may not
occur. Interest on these Securities begins accruing to the benefit of
Unitholders on their respective dates of
GI-1
GENERAL INFORMATION
<PAGE>
delivery. To the extent any Municipal Bonds in a Tax-Exempt Portfolio are
actually delivered to such Trust after their respective expected dates of
delivery, Unitholders who purchase Units in such Trust prior to the date such
"when, as and if issued" or "delayed delivery" Municipal Bonds are actually
delivered to the Trustee would, to the extent such income is not offset by a
reduction in the Trustee's fee (or, to the extent necessary, other expenses),
be required to reduce their tax basis in their Units of such Trust since the
interest accruing on such Municipal Bonds during the interval between their
purchase of Units and the actual delivery of such Municipal Bonds would, for
tax purposes, be considered a non-taxable return of principal rather than as
tax-exempt interest. The result of such adjustment, if necessary, would be,
during the first year only, that the Estimated Long-Term Returns may be, and
the Estimated Current Returns would be, slightly lower than those shown
herein, assuming such Trust portfolios and estimated annual expenses do not
vary. See footnote (4) to "Essential Information." Unitholders of all Trusts
will be "at risk" with respect to any "when, as and if issued" or "delayed
delivery" Securities included in their respective Trust (i.e., may derive
either gain or loss from fluctuations in the evaluation of such Securities)
from the date they commit for Units.
The Replacement Securities must be purchased within 20 days after delivery of
the notice that a contract to deliver a Security will not be honored and the
purchase price may not exceed the amount of funds reserved for the purchase of
the Failed Securities. The Replacement Securities (i) must be payable in
United States currency, (ii) must be purchased at a price that results in a
yield to maturity and a current return at least equal to that of the Failed
Securities as of the Initial Date of Deposit, (iii) shall not be "when, as and
if issued" or restricted securities, (iv) must satisfy any rating criteria for
Securities originally included in such Trust, (v) not cause the Units of such
Trust to cease to be rated AAA by Standard & Poor's if the Units were so rated
on the Initial Date of Deposit and (vi) in the case of Insured Trust Funds
must be insured prior to acquisition by a Trust. In connection with an Insured
Corporate Series, an Investment Grade Series or a High Yield Series,
Replacement Securities also must be bonds, debentures, notes or other straight
debt obligations (whether secured or unsecured and whether senior or
subordinated) without equity or other conversion features, with fixed maturity
dates substantially the same as those of the Failed Securities having no
warrants or subscription privileges attached and be issued after July 18, 1984
if interest thereon is United States source income. In connection with a Tax-
Exempt Portfolio only, Replacement Securities must also (i) be tax-exempt
bonds issued by the appropriate state or counties, municipalities, authorities
or political subdivisions thereof and (ii) have a fixed maturity date of at
least 3 years if the bonds are to be deposited in a trust other than a long-
term trust or at least 10 years if the bonds are to be deposited in a long-
term trust. Whenever a Replacement Security is acquired for a Trust, the
Trustee shall, within five days thereafter, notify all Unitholders of the
Trust of the acquisition of the Replacement Security and shall, on the next
monthly distribution date which is more than 30 days thereafter, make a pro
rata distribution of the amount, if any, by which the cost to the Trust of the
Failed Security exceeded the cost of the Replacement Security. Once all of the
Securities in a Trust are acquired, the Trustee will have no power to vary the
investments of the Trust, i.e., the Trustee will have no managerial power to
take advantage of market variations to improve a Unitholder's investment.
If the right of limited substitution described in the preceding paragraphs is
not utilized to acquire Replacement Securities in the event of a failed
contract, the Sponsor will refund the sales charge attributable to such Failed
Securities to all Unitholders of the Trust Fund and the Trustee will
distribute the principal and accrued interest attributable to such Failed
Securities not more than 30 days after the date on which the Trustee would
have been required to purchase a Replacement Security. In addition,
Unitholders should be aware that, at the time of receipt of such principal,
they may not be able to reinvest such proceeds in other securities at a yield
equal to or in excess of the yield which such proceeds would have earned for
Unitholders of such Trust Fund.
GI-2
GENERAL INFORMATION
<PAGE>
Whether or not a Replacement Security is acquired, an amount equal to the
accrued interest (at the coupon rate of the Failed Securities) will be paid to
Unitholders of the Trust Fund to the date the Sponsor removes the Failed
Securities from the Trust Fund if the Sponsor determines not to purchase a
Replacement Security or to the date of substitution if a Replacement Security
is purchased. All such interest paid to Unitholders which accrued after the
date of settlement for a purchase of Units will be paid by the Sponsor. In the
event a Replacement Security could not be acquired by a Trust, the net annual
interest income per Unit for such Trust would be reduced and the Estimated
Current Return and Estimated Long-Term Return might be lowered.
Subsequent to the Initial Date of Deposit, a Security may cease to be rated or
its rating may be reduced below any minimum required as of the Initial Date of
Deposit. Neither event requires the elimination of such investment from a
Trust, but may be considered in the Sponsor's determination to direct the
Trustee to dispose of such investment. See "General Information--Investment
Supervision."
The Sponsor may not alter the portfolio of a Trust except upon the happening
of certain extraordinary circumstances. See "General Information--Investment
Supervision." Certain of the Securities 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 with proceeds from a fund accumulated for the
scheduled retirement of a portion of an issue 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 under "Portfolio" for each
Trust. Redemption pursuant to optional call provisions is more likely to
occur, and redemption pursuant to special or extraordinary redemption
provisions may occur, when the Securities 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
Securities and from Securities which mature in accordance with their terms
from a Trust, unless utilized to pay for Units tendered for redemption, will
be distributed to Unitholders of such Trust and will not be used to purchase
additional Securities for such Trust. Accordingly, any such call, redemption,
sale or maturity will reduce the size and diversity of a Trust and the net
annual interest income of such Trust and may reduce the Estimated Current
Return and the Estimated Long-Term Return. See "General Information--Interest,
Estimated Long-Term Return and Estimated Current Return." The call,
redemption, sale or maturity of Securities also may have tax consequences to a
Unitholder. See "Federal Tax Status" for each Trust. Information with respect
to the call provisions and maturity dates of the Securities is contained in
"Portfolio" for each Trust.
Each Unit of a Trust represents an undivided fractional interest in the
Securities deposited therein, in the ratio shown under "Essential
Information." Units may be purchased and certificates, if requested, will be
issued in denominations of one Unit or any multiple or fraction thereof,
subject to each Trust's minimum investment requirement of one Unit. Fractions
of Units will be computed to three decimal points. To the extent that Units of
a Trust are redeemed, the principal amount of Securities in such Trust will be
reduced and the undivided fractional interest represented by each outstanding
Unit of such Trust will increase. See "General Information--Redemption."
Certain of the Securities in certain of the Trusts may have been acquired at a
market discount from par value at maturity. The coupon interest rates on the
discount securities at the time they were purchased
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and deposited in the Trusts were lower than the current market interest rates
for newly issued bonds of comparable rating and type. If such interest rates
for newly issued comparable securities increase, the market discount of
previously issued securities will become greater, and if such interest rates
for newly issued comparable securities decline, the market discount of
previously issued securities will be reduced, other things being equal.
Investors should also note that the value of securities purchased at a market
discount will increase in value faster than securities purchased at a market
premium if interest rates decrease. Conversely, if interest rates increase,
the value of securities purchased at a market discount will decrease faster
than securities purchased at a market premium. In addition, if interest rates
rise, the prepayment risk of higher yielding, premium securities and the
prepayment benefit for lower yielding, discount securities will be reduced. A
discount security held to maturity will have a larger portion of its total
return in the form of taxable income and capital gain and loss in the form of
tax-exempt interest income than a comparable security newly issued at current
market rates. See "Federal Tax Status." Market discount attributable to
interest changes does not indicate a lack of market confidence in the issue.
Neither the Sponsor nor the Trustee shall be liable in any way for any
default, failure or defect in any of the Securities.
Certain of the Securities in certain of the Trust Funds may be "zero coupon"
bonds, i.e., an original issue discount bond that does not provide for the
payment of current interest. Zero coupon bonds are purchased at a deep
discount because the buyer receives only the right to receive a final payment
at the maturity of the bond and does not receive any periodic interest
payments. The effect of owning deep discount bonds which do not make current
interest payments (such as the zero coupon bonds) is that a fixed yield is
earned not only on the original investment but also, in effect, on all
discount earned during the life of such obligation. This implicit reinvestment
of earnings at the same rate eliminates the risk of being unable to reinvest
the income on such obligation at a rate as high as the implicit yield on the
discount obligation, but at the same time eliminates the holder's ability to
reinvest at higher rates in the future. For this reason, zero coupon bonds are
subject to substantially greater price fluctuations during periods of changing
market interest rates than are securities of comparable quality which pay
interest currently. For the Federal tax consequences of original issue
discount securities such as the zero coupon bonds, see "Federal Tax Status"
for each Trust.
To the best of the Sponsor's knowledge, there is no litigation pending as of
the Initial Date of Deposit in respect of any Security which might reasonably
be expected to have a material adverse effect on the Trust Funds. At any time
after the Initial Date of Deposit, litigation may be instituted on a variety
of grounds with respect to the Securities. 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 Security.
RETIREMENT PLANS
Units of the Trusts (other than a Tax-Exempt Portfolio) 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
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are offered by brokerage firms and other financial institutions. The Trusts
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
lesser 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 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
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shares of the reinvestment account. An individual wishing the Trustee to act
as custodian must complete an EVEREN UIT/IRA application and forward it along
with a check made payable to The Bank of New York. 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 mutual fund which is registered in such
Unitholder's state of residence and is underwritten or advised by Zurich
Kemper Investments, Inc. (the "Zurich 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 Zurich Kemper Funds generally will differ significantly from that of
the Trusts, Unitholders should carefully consider the consequences before
selecting such Zurich 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 the
Sponsor 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 "General Information--Unitholders--Distributions to
Unitholders."
The Program Agent is The Bank of New York. All inquiries concerning
participation in distribution reinvestment should be directed to the Program
Agent at its unit investment trust division office.
INTEREST, ESTIMATED LONG-TERM RETURN AND ESTIMATED CURRENT RETURN
As of the opening of business on the Initial Date of Deposit, the Estimated
Long-Term Return and the Estimated Current Return, if applicable, for each
Trust were as set forth in the "Essential Information" for each Trust.
Estimated Current Return is calculated by dividing the estimated net annual
interest income per Unit by the Public Offering Price. The estimated net
annual interest income per Unit will vary with changes in fees and expenses of
the Trustee, the Sponsor and the Evaluator and with the principal prepayment,
redemption, maturity, exchange or sale of the Securities while the Public
Offering Price will vary with changes in the offering price of the underlying
Securities and accrued interest; therefore, there is no assurance that the
present Estimated Current Return will be realized in the future. Estimated
Long-Term Return is calculated using a formula which (1) takes into
consideration, and determines and factors in the relative weightings of, the
market values, yields (which takes into account the amortization of premiums
and the accretion of discounts) and estimated retirements or average life of
all of the Securities in a Trust and (2) takes into account the expenses and
sales charge associated with each Trust Unit. Since the market values and
estimated retirements of the Securities and the expenses of a Trust will
change,
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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.
In order to acquire certain of the Securities contracted for by a Trust, it
may be necessary for the Sponsor or Trustee to pay on the dates for delivery
of such Securities amounts covering accrued interest on such Securities which
exceed the amount which will be made available in the letter of credit
furnished by the Sponsor on the Initial Date of Deposit. The Trustee has
agreed to pay any amounts necessary to cover any such excess and will be
reimbursed therefor, without interest, when funds become available from
interest payments on the Securities deposited in that Trust.
Payments received in respect of mortgages underlying Ginnie Maes in each
series of a GNMA Portfolio will consist of a portion representing interest and
a portion representing principal. Although the aggregate monthly payment made
by the obligor on each mortgage remains constant (aside from optional
prepayments of principal), in the early years most of each such payment will
represent interest, while in later years, the proportion representing interest
will decline and the proportion representing principal will increase. However,
by reason of optional prepayments, principal payments in the earlier years on
mortgages underlying Ginnie Maes may be substantially in excess of those
required by the amortization schedules of such mortgages. Therefore, principal
payments in later years may be substantially less since the aggregate unpaid
principal balances of such underlying mortgages may have been greatly reduced.
To the extent that the underlying mortgages bearing higher interest rates in a
GNMA Portfolio are prepaid faster than the other underlying mortgages, the net
annual interest rate per Unit and the Estimated Current Return on the Units of
a GNMA Portfolio can be expected to decline. Monthly payments to the
Unitholders of a GNMA Portfolio will reflect all of these factors.
MARKET FOR UNITS
After the initial offering period, while not obligated to do so, the Sponsor
intends to, and certain of the Underwriters may, subject to change at any
time, maintain a market for Units of the Trust Funds offered hereby and to
continuously offer to purchase said Units at prices, determined by the
Evaluator, based on the aggregate bid prices of the underlying Securities in
such Trusts, together with accrued interest to the expected dates of
settlement. To the extent that a market is maintained during the initial
offering period, the prices at which Units will be repurchased will be based
upon the aggregate offering side evaluation of the Securities in the Trusts.
The aggregate bid prices of the underlying Securities in each Trust are
expected to be less than the related aggregate offering prices (which is the
evaluation method used during the initial public offering period).
Accordingly, Unitholders who wish to dispose of their Units should inquire of
their bank or broker as to current market prices in order to determine whether
there is in existence any price in excess of the Redemption Price and, if so,
the amount thereof.
The offering price of any Units resold by the Sponsor or Underwriters will be
in accord with that described in the currently effective Prospectus describing
such Units. Any profit or loss resulting from the resale of such Units will
belong to the Sponsor and/or the Underwriters. The Sponsor and/or the
Underwriters may suspend or discontinue purchases of Units of any Trust if the
supply of Units exceeds demand, or for other business reasons.
REDEMPTION
A Unitholder who does not dispose of Units in the secondary market described
above may cause Units to be redeemed by the Trustee by making a written
request to the Trustee at its unit investment trust
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<PAGE>
division office 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 a form satisfactory to the
Trustee. Unitholders must sign the 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
guarantee 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 purchasers.
Redemption shall be made by the Trustee on the third business day following
the day on which a tender for redemption is received (the "Redemption Date")
by payment of cash equivalent to the Redemption Price for such Trust,
determined as set forth below under "Computation of Redemption Price," as of
the evaluation time stated under "Essential Information," next following such
tender, multiplied by the number of Units being redeemed. Any Units redeemed
shall be cancelled and any undivided fractional interest in the Trust
extinguished. The price received upon redemption might be more or less than
the amount paid by the Unitholder depending on the value of the Securities in
the Trust 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 for such Trust to the extent that funds are available for
such purpose. All other amounts paid on redemption shall be withdrawn from the
Principal Account for such Trust. The Trustee is empowered to sell Securities
for a Trust in order to make funds available for the redemption of Units of
such Trust. Such sale may be required when Securities would not otherwise be
sold and might result in lower prices than might otherwise be realized. To the
extent Securities are sold, the size and diversity of a Trust will be reduced.
In the case of a U.S. Treasury Portfolio or a GNMA Portfolio, Securities will
be sold by the Trustee so as to maintain, as closely as practicable, the
original percentage relationship between the principal amounts of the
Securities in such Trusts. The Securities to be sold for purposes of redeeming
Units will be selected from a list supplied by the Sponsor. The Securities
will be chosen for this list by the Sponsor on the basis of such market and
credit factors as it may determine are in the best interests of such Trusts.
Provision is made under the related Trust Agreements for the Sponsor to
specify minimum face amounts in which
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blocks of Securities are to be sold in order to obtain the best price
available. While such minimum amounts may vary from time to time in accordance
with market conditions, it is anticipated that the minimum face amounts which
would be specified would range from $25,000 to $100,000. Sales may be required
at a time when the Securities would not otherwise be sold and might result in
lower prices than might otherwise be realized. Moreover, due to the minimum
principal amount in which U.S. Treasury Obligations and Ginnie Maes may be
required to be sold, the proceeds of such sales may exceed the amount
necessary for payment of Units redeemed. To the extent not used to meet other
redemption requests in such Trusts, such excess proceeds will be distributed
pro rata to all remaining Unitholders of record of such Trusts, unless
reinvested in substitute Securities. See "General Information--Investment
Supervision."
The Trustee is irrevocably authorized in its discretion, if an Underwriter
does not elect to purchase any Unit 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 the
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 Securities is not reasonably practicable or
it is not reasonably practicable to fairly determine the value of the
underlying Securities in accordance with the Trust Agreements; 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 Trust
is computed by the Evaluator as of the evaluation time stated under "Essential
Information" 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 the Trust other than cash deposited in the
Trust to purchase Securities not applied to the purchase of such Securities;
(2) the aggregate value of each issue of the Securities (including "when
issued" contracts, if any) held in the Trust as determined by the Evaluator on
the basis of bid prices therefor; and (3) interest accrued and unpaid on the
Securities in the Trust as of the date of computation;
B. deducting therefrom (1) amounts representing any applicable taxes or
governmental charges payable out of the Trust and for which no deductions have
been previously made for the purpose of additions to the Reserve Account
described under "General Information--Expenses of the Trusts"; (2) an amount
representing estimated accrued expenses of the Trust, including but not
limited to fees and expenses of the Trustee (including legal and auditing fees
and any insurance costs), 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 the
Trust; and
C. finally dividing the results of such computation by the number of Units of
the Trust outstanding as of the date thereof.
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UNITHOLDERS
Ownership of Units. Ownership of Units of any Trust will not be evidenced by
certificates unless a Unitholder, the Unitholder's registered broker/dealer or
the clearing agent for such broker/dealer makes a written request to the
Trustee. Certificates, if issued, will be so noted on the confirmation
statement sent to the Underwriter and broker. Non-receipt of such
certificate(s) must be reported to the Trustee within one year; otherwise, a
2% surety bond fee will be required for replacement.
Units are transferable by making a written request to the Trustee and, in the
case of Units evidenced by a certificate, by presenting and surrendering such
certificate to the Trustee properly endorsed or accompanied by a written
instrument or instruments of transfer which should be sent registered or
certified mail for the protection of the Unitholder. 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 transferred. Such signatures must be guaranteed
by a participant in the Securities Transfer Agents Medallion Program ("STAMP")
or such other signature guarantee 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 subject to each Trust's minimum investment
requirement of 100 Units or any whole Unit multiple thereof subject to any
minimum requirement established by the Sponsor from time to time. 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 3% of the market value of the Units), affidavit of loss, evidence
of ownership and payment of expenses incurred.
Distributions to Unitholders. Interest received by each Trust, including any
portion of the proceeds from a disposition of Securities which represents
accrued interest, is credited by the Trustee to the Interest Account for such
Trust. All other receipts are credited by the Trustee to a separate Principal
Account for the Trust. The Trustee normally has no cash for distribution to
Unitholders until it receives interest payments on the Securities in the
Trust. Since interest usually is paid semi-annually (monthly in the case of a
GNMA Portfolio), during the initial months of the Trusts, the Interest Account
of each Trust, consisting of accrued but uncollected interest and collected
interest (cash), will be predominantly the uncollected accrued interest that
is not available for distribution. On the dates set forth under "Essential
Information" for each Trust, the Trustee will commence distributions, in part
from funds advanced by the Trustee.
Thereafter, assuming the Trust retains its original size and composition,
after deduction of the fees and expenses of the Trustee, the Sponsor and
Evaluator and reimbursements (without interest) to the Trustee for any amounts
advanced to a Trust, the Trustee will normally distribute on each Interest
Distribution Date (the fifteenth of the month) or shortly thereafter to
Unitholders of record of such Trust on the preceding Record Date (which is the
first day of each month). Unitholders of the Trusts will receive an amount
substantially equal to one-twelfth of such holders' pro rata share of the
estimated net annual interest income to the Interest Account of such Trust.
However, interest earned at any point in time will be greater than the amount
actually received by the Trustee and distributed to the Unitholders.
Therefore,
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there will always remain an item of accrued interest that is added to the
daily value of the Units. If Unitholders of a Trust sell or redeem all or a
portion of their Units, they will be paid their proportionate share of the
accrued interest of such Trust to, but not including, the third business day
after the date of a sale or to the date of tender in the case of a redemption.
In order to equalize distributions and keep the undistributed interest income
of the Trusts at a low level, all Unitholders of record in such Trust on the
first Record Date will receive an interest distribution on the first Interest
Distribution Date. Because the period of time between the first Interest
Distribution Date and the regular distribution dates may not be a full period,
the first regular distributions may be partial distributions.
Unitholders of a U.S. Treasury Portfolio which contains Stripped Treasury
Securities should note that Stripped Treasury Securities are sold at a deep
discount because the buyer of those securities obtains only the right to
receive a future fixed payment on the security and not any rights to periodic
interest payments thereon. Purchasers of these Securities acquire, in effect,
discount obligations that are economically identical to the "zero-coupon
bonds" that have been issued by corporations. Zero coupon bonds are debt
obligations which do not make any periodic payments of interest prior to
maturity and accordingly are issued at a deep discount. Under generally
accepted accounting principles, a holder of a security purchased at a discount
normally must report as an item of income for financial accounting purposes
the portion of the discount attributable to the applicable reporting period.
The calculation of this attributable income would be made on the "interest"
method which generally will result in a lesser amount of includible income in
earlier periods and a correspondingly larger amount in later periods. For
Federal income tax purposes, the inclusion will be on a basis that reflects
the effective compounding of accrued but unpaid interest effectively
represented by the discount. Although this treatment is similar to the
"interest" method described above, the "interest" method may differ to the
extent that generally accepted accounting principles permit or require the
inclusion of interest on the basis of a compounding period other than the
semi-annual period. See "Federal Tax Status" for the U.S. Treasury Portfolios,
if any.
Persons who purchase Units between a Record Date and a Distribution Date will
receive their first distribution on the second Distribution Date following
their purchase of Units. Since interest on Bonds in the Trusts is payable at
varying intervals, usually in semi-annual installments, and distributions of
income are made to Unitholders at different intervals from receipt of
interest, the interest accruing to a Trust may not be equal to the amount of
money received and available for distribution from the Interest Account.
Therefore, on each Distribution Date the amount of interest actually deposited
in the Interest Account of a Trust 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 Agreements 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 for such Trust.
The Trustee will distribute on each Distribution Date or shortly thereafter,
to each Unitholder of record of a Trust on the preceding Record Date, an
amount substantially equal to such holder's pro rata share of the cash
balance, if any, in the Principal Account of such Trust 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 is less than $.01 per
Unit. Notwithstanding the foregoing, the Trustee will make a distribution to
Unitholders of all principal relating to maturing U.S. Treasury Obligations in
any U.S. Treasury Portfolio or GNMA Portfolio within twelve business days of
the date of such maturity.
GI-11
GENERAL INFORMATION
<PAGE>
In connection with GNMA Portfolios only, the terms of the Ginnie Maes provide
for payment to the holders thereof (including a GNMA Portfolio) on the
fifteenth day of each month of amounts collected by or due to the issuers
thereof with respect to the underlying mortgages during the preceding month.
The Trustee will collect the interest due a GNMA Portfolio on the Securities
therein as it becomes payable and credit such interest to a separate Interest
Account for such GNMA Portfolio created by the Indenture. Distributions will
be made to each Unitholder of record of a GNMA Portfolio on the appropriate
Distribution Date (see "Essential Information") and will consist of an amount
substantially equal to such Unitholder's pro rata share of the cash balances,
if any, in the Interest Account, the Principal Account and any Capital Gains
Account of such GNMA Portfolio, computed as of the close of business on the
preceding Record Date.
Statements 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 Trust are required to be audited annually, at the Trust's
expense, by independent auditors designated by the Sponsor, unless the Sponsor
determines that such an audit would not be in the best interest of the
Unitholders of such Trust. The accountants' report will be furnished by the
Trustee to any Unitholder of such 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 Trust a statement, covering the calendar year, setting forth
for the applicable Trust:
A. As to the Interest Account:
1. The amount of interest received on the Securities (and for Tax-Exempt
Portfolios, the percentage of such amount by states and territories in which
the issuers of such Securities are located);
2. The amount paid from the Interest Account representing accrued interest of
any Units redeemed;
3. The deductions from the Interest Account for applicable taxes, if any, fees
and expenses (including auditing fees) of the Trustee, the Sponsor, the
Evaluator, and, if any, of bond counsel;
4. Any amounts credited by the Trustee to the Reserve Account described under
"General Information--Expenses of the Trusts";
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; and
B. As to the Principal Account:
1. The dates of the maturity, liquidation or redemption of any of the
Securities and the net proceeds received therefrom excluding any portion
credited to the Interest Account;
2. The amount paid from the Principal Account representing the principal of
any Units redeemed;
3. The deductions from the Principal Account for payment of applicable taxes,
if any, fees and expenses (including auditing fees) of the Trustee, the
Sponsor, the Evaluator, and, if any, of bond counsel;
4. The amount of when-issued interest treated as a return of capital, if any;
GI-12
GENERAL INFORMATION
<PAGE>
5. Any amounts credited by the Trustee to the Reserve Account described under
"General Information--Expenses of the Trusts";
6. 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 the calendar year; and
C. The following information:
1. A list of the Securities as of the last business day of such calendar year;
2. The number of Units outstanding on the last business day of such calendar
year;
3. The Redemption Price based on the last evaluation made during such calendar
year;
4. The amount actually distributed during such calendar year from the Interest
and Principal Accounts (and Capital Gains Account, if applicable) separately
stated, expressed both as total dollar amounts and as dollar amounts per Unit
outstanding on the Record Dates for each such distribution.
Rights of Unitholders. A Unitholder may at any time tender Units to the
Trustee for redemption. The death or incapacity of any Unitholder will not
operate to terminate a 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 a Trust.
No Unitholder shall have the right to control the operation and management of
any Trust in any manner, except to vote with respect to the amendment of the
Trust Agreements or termination of any Trust.
INVESTMENT SUPERVISION
The Sponsor may not alter the portfolios of the Trusts by the purchase, sale
or substitution of Securities, except in the special circumstances noted below
and as indicated earlier under "General Information--Trust Information"
regarding the substitution of Replacement Securities for any Failed
Securities. Thus, with the exception of the redemption or maturity of
Securities in accordance with their terms, the assets of the Trusts will
remain unchanged under normal circumstances.
The Sponsor may direct the Trustee to dispose of Securities the value of which
has been affected by certain adverse events including institution of certain
legal proceedings or decline in price or the occurrence of other market
factors, including advance refunding, so that in the opinion of the Sponsor
the retention of such Securities in a Trust would be detrimental to the
interest of the Unitholders. The proceeds from any such sales, exclusive of
any portion which represents accrued interest, will be credited to the
Principal Account of such Trust for distribution to the Unitholders.
The Sponsor is required to instruct the Trustee to reject any offer made by an
issuer of Securities to issue new obligations in exchange or substitution for
any of such Securities pursuant to a refunding financing 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 Securities or (2) in the written
opinion of the Sponsor the issuer will probably default with respect to such
Securities in the reasonably forseeable future. Any obligation so received in
exchange or substitution will be held by the Trustee subject to the terms and
conditions of the Trust Agreement to the same extent as Securities originally
deposited thereunder. Within five days after deposit of obligations in
exchange or substitution for underlying Securities, the Trustee is required to
give notice thereof to each Unitholder, identifying the Securities eliminated
and the Securities substituted therefor.
GI-13
GENERAL INFORMATION
<PAGE>
The Trustee may sell Securities, designated by the Sponsor, from a Trust for
the purpose of redeeming Units of such Trust tendered for redemption and the
payment of expenses.
ADMINISTRATION OF THE TRUSTS
The Trustee. The Trustee is The Bank of New York, a trust company organized
under the laws of New York. The Bank of New York has its offices at 101
Barclay Street, New York, New York 10286, telephone 1(800) 701-8178. The Bank
of New York is subject to supervision and examination by the Superintendent of
Banks of the State of New York and the Board of Governors of the Federal
Reserve System, and its deposits are insured by the Federal Deposit Insurance
Corporation to the extent permitted by law.
The Trustee, whose duties are ministerial in nature, has not participated in
selecting the portfolio of any Trust. For information relating to the
responsibilities of the Trustee under the Trust Agreements, reference is made
to the material set forth under "General Information--Unitholders."
In accordance with the Trust Agreements, the Trustee shall keep 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 Trust. Such
books and records shall be open to inspection by any Unitholder of such Trust
at all reasonable times during 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
Securities held in each Trust. Pursuant to the Trust Agreements, the Trustee
may employ one or more agents for the purpose of custody and safeguarding of
Securities comprising the Trusts.
Under the Trust Agreements, the Trustee or any successor trustee may resign
and be discharged of its duties 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 60 days before the date
specified in such notice when such resignation is to take effect. The Sponsor
upon receiving notice of such resignation is obligated to appoint a successor
trustee promptly. If, upon such resignation, no successor trustee has been
appointed and has accepted the appointment within 30 days after notification,
the retiring Trustee may apply to a court of competent jurisdiction for the
appointment of a successor. The Sponsor may at any time remove the Trustee,
with or without cause, and appoint a successor trustee as provided in the
Trust 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 such 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. EVEREN Unit Investment Trusts, a service of EVEREN 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 30
days after notice of resignation, the Evaluator may
GI-14
GENERAL INFORMATION
<PAGE>
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, Cantor Fitzgerald & Co., a non-affiliated firm regularly
engaged in the business of evaluating, quoting or appraising comparable
securities, provides, for both the initial offering period and secondary
market transactions, portfolio evaluations of the Securities in the Trusts
which are then reviewed by the Evaluator. In the event the Sponsor is unable
to obtain current evaluations from Cantor Fitzgerald & Co., 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 with respect to the Trusts may also be
amended in any respect by the Sponsor and the Trustee, or any of the
provisions thereof may be waived, with the consent of the holders of Units
representing 66 2/3% of the Units then outstanding of such Trust, provided
that no such amendment or waiver will reduce the interest of any Unitholder
thereof 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 of such Trust. In no event shall any Trust Agreement be
amended to increase the number of Units of a Trust issuable thereunder or to
permit, except in accordance with the provisions of such Trust Agreement, the
acquisition of any Securities in addition to or in substitution for those
initially deposited in a Trust. The Trustee shall promptly notify Unitholders
of the substance of any such amendment.
The Trust Agreements provide that the Trusts shall terminate upon the
maturity, redemption or other disposition of the last of the Securities held
in a Trust. If the value of a Trust shall be less than the applicable minimum
value stated under "Essential Information," the Trustee may, in its
discretion, and shall, when so directed by the Sponsor, terminate the Trust. A
Trust may be terminated at any time by the holders of Units representing 66
2/3% of the Units thereof then outstanding. In the event of termination of a
Trust, written notice thereof will be sent by the Trustee to all Unitholders
of such Trust. Within a reasonable period after termination, the Trustee will
sell any Securities remaining in such Trust and, after paying all expenses and
charges incurred by the Trust, will distribute to Unitholders thereof (upon
surrender for cancellation of certificates for Units, if issued) their pro
rata share of the balances remaining in the Interest and Principal Accounts
(and Capital Gains Account, if applicable) of such Trust.
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 Securities.
The Trustee: The Trust Agreements provide 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, Securities 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
Securities. 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
GI-15
GENERAL INFORMATION
<PAGE>
personally liable for any taxes or other governmental charges imposed upon or
in respect of the Securities or upon the interest thereon. In addition, the
Trust Agreements contain 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 TRUSTS
The Sponsor will charge the Trusts a surveillance fee for services performed
for the Trusts in an amount not to exceed that amount set forth in "Essential
Information" but in no event will such compensation, when combined with all
compensation received from other unit investment trusts for which the Sponsor
both acts as sponsor and provides portfolio surveillance, exceed the aggregate
cost to the Sponsor for providing such services. Such fee shall be based on
the total number of Units of the related Trust outstanding as of the January
Record Date for any annual period. The Sponsor will receive a portion of the
sales commissions paid in connection with the purchase of Units and will share
in profits, if any, related to the deposit of Securities in the Trusts. The
Sponsor and other Underwriters have borne all the expenses of creating and
establishing the Trusts including the cost of the initial preparation,
printing and execution of the Prospectus, Trust Agreements and certificates,
legal and accounting expenses, advertising and selling expenses, payment of
closing fees, the expenses of the Trustee, evaluation fees relating to the
deposit and other out-of-pocket expenses.
The Trustee receives for its services fees set forth under "Essential
Information." The Trustee fee which is calculated monthly is based on the
largest aggregate principal amount of Securities in a Trust at any time during
the period. In no event shall the Trustee be paid less than $2,000 per Trust
in any one year. 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 trust procedures; however, the Trustee is also authorized
by the Trust Agreements to make from time to time certain non-interest bearing
advances to the Trusts. During the first year the Trustee has agreed to lower
its fees and absorb expenses by the amount set forth under "Essential
Information." The Trustee's fee will not be increased in future years in order
to make up this reduction in the Trustee's fee. The Trustee's fee is payable
on or before each Distribution Date.
For evaluation of Securities in each Trust, the Evaluator shall receive a fee,
payable monthly, calculated on the basis of that annual rate set forth under
"Essential Information," based upon the largest aggregate principal amount of
Securities in such Trust at any time during such monthly period.
The Trustee's and Evaluator's fees are deducted first from the Interest
Account of a Trust to the extent funds are available and then from the
Principal Account. 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. In
addition, the Trustee's fee may be periodically adjusted in response to
fluctuations in short-term interest rates (reflecting the cost to the Trustee
of advancing funds to a Trust to meet scheduled distributions).
GI-16
GENERAL INFORMATION
<PAGE>
The following additional charges are or may be incurred by the Trusts: (a)
fees for the Trustee's extraordinary services; (b) expenses of the Trustee
(including legal and auditing expenses and insurance costs for Insured Trust
Funds, but not including any fees and expenses charged by any agent for
custody and safeguarding of Securities) and of bond counsel, if any; (c)
various governmental charges; (d) expenses and costs of any action taken by
the Trustee to protect a Trust 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 a 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 in that capacity
without gross negligence, bad faith or willful misconduct; and (g)
expenditures incurred in contacting Unitholders upon termination of the
Trusts. The fees and expenses set forth herein are payable out of the
appropriate Trust and, when owing to the Trustee, are secured by a lien on
such Trust. Fees or charges relating to a Trust shall be allocated to each
Trust in the same ratio as the principal amount of such Trust bears to the
total principal amount of all Trusts. Fees or charges relating solely to a
particular Trust shall be charged only to such Trust.
Fees and expenses of the Trusts shall be deducted from the Interest Account
thereof, or, to the extent funds are not available in such Account, from the
Principal Accounts. The Trustee may withdraw from the Principal Account or the
interest Account of any Trust 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 the Trust. Amounts so withdrawn shall be
credited to a separate account maintained for a Trust known as the Reserve
Account and shall not be considered a part of the Trust when determining the
value of the Units until such time as the Trustee shall return all or any part
of such amounts to the appropriate account.
THE SPONSOR
The Sponsor, EVEREN Unit Investment Trusts, with an office at 77 West Wacker
Drive, 29th Floor, Chicago, Illinois 60601, (800) 621-5024, is a service of
EVEREN Securities, Inc., which is a wholly-owned subsidiary of EVEREN Capital
Corporation. The Sponsor acts as underwriter of a number of other unit
investment trusts and will act as underwriter of any other unit investment
trust products developed by the Sponsor in the future. As of December 31,
1995, the total stockholder's equity of EVEREN Securities, Inc. was
$261,286,862.
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 shall have its affairs 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 Trusts 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 these Trusts. Such information is included in this
Prospectus only for the purpose of informing investors as to the financial
responsibility of the Sponsor and its ability to carry out its contractual
obligations with respect to the Trusts. More comprehensive financial
information can be obtained upon request from the Sponsor.
GI-17
GENERAL INFORMATION
<PAGE>
LEGAL OPINIONS
The legality of the Units offered hereby and certain matters relating to
Federal tax law have been passed upon by Chapman and Cutler, 111 West Monroe
Street, Chicago, Illinois 60603, as counsel for the Sponsor.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The statements of condition and the related portfolios at the Initial Date of
Deposit included in this Prospectus have been audited by Grant Thornton LLP,
independent certified public accountants, as set forth in their report in the
Prospectus, and are included herein in reliance upon the authority of said
firm as experts in accounting and auditing.
GI-18
GENERAL INFORMATION
<PAGE>
<TABLE>
<CAPTION>
CONTENTS PAGE
-----
<S> <C>
SUMMARY.................................................................. 2
ESSENTIAL INFORMATION.................................................... 3
THE TRUST FUNDS.......................................................... 6
REPORT OF INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS............................................................. 8
STATEMENTS OF CONDITION.................................................. 9
PUBLIC OFFERING OF UNITS................................................. 10
Public Offering Price................................................... 10
Accrued Interest........................................................ 12
Comparison of Public Offering Price and
Redemption Price....................................................... 13
Public Distribution of Units............................................ 13
Profits of Sponsor and Underwriters..................................... 15
THE GNMA PORTFOLIOS...................................................... GNMA-1
The Trust Portfolio..................................................... GNMA-1
Portfolios.............................................................. GNMA-2
Notes to Portfolios..................................................... GNMA-3
Risk Factors............................................................ GNMA-4
Federal Tax Status...................................................... GNMA-8
Estimated Cash Flows to Unitholders.....................................GNMA-10
THE TAX EXEMPT PORTFOLIOS................................................ TE-1
The Trust Portfolio..................................................... TE-1
Series Information...................................................... TE-1
Taxable Equivalent Estimated Current
Return Tables.......................................................... TE-3
Portfolios.............................................................. TE-5
Notes to Portfolios..................................................... TE-7
Risk Factors............................................................ TE-8
State Risk Factors and State Tax Status................................. TE-11
Insurance on the Bonds.................................................. TE-15
Federal Tax Status...................................................... TE-18
Tax Reporting and Reallocation.......................................... TE-22
Underwriting............................................................ TE-23
Estimated Cash Flows to Unitholders..................................... TE-24
GENERAL INFORMATION...................................................... GI-1
Rating of Units......................................................... GI-1
Trust Information....................................................... GI-1
Retirement Plans........................................................ GI-4
Distribution Reinvestment............................................... GI-6
Interest, Estimated Long-Term Return and Estimated
Current Return......................................................... GI-6
Market for Units........................................................ GI-7
Redemption.............................................................. GI-7
Unitholders............................................................. GI-10
Investment Supervision.................................................. GI-13
Administration of the Trusts............................................ GI-14
Expenses of the Trusts.................................................. GI-16
The Sponsor............................................................. GI-17
Legal Opinions.......................................................... GI-18
Independent Certified Public Accountants................................ GI-18
</TABLE>
--------------------
THIS PROSPECTUS DOES NOT CONTAIN ALL OF THE INFORMATION SET FORTH IN THE
REGISTRATION STATEMENT AND EXHIBITS RELATING THERETO, FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION, WASHINGTON, D.C. UNDER THE SECURITIES ACT OF 1933 AND
THE INVESTMENT COMPANY ACT OF 1940, AND TO WHICH REFERENCE IS MADE.
--------------------
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS
NOT CONTAINED IN THE PROSPECTUS AND ANY INFORMATION OR REPRESENTATION NOT
CONTAINED HEREIN MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
TRUSTS, THE TRUSTEE, OR THE SPONSOR. THE TRUSTS ARE REGISTERED AS UNIT
INVESTMENT TRUSTS UNDER THE INVESTMENT COMPANY ACT OF 1940. SUCH REGISTRATION
DOES NOT IMPLY THAT THE TRUSTS OR THE UNITS HAVE BEEN GUARANTEED, SPONSORED,
RECOMMENDED OR APPROVED BY THE UNITED STATES OR ANY STATE OR ANY AGENCY OR
OFFICER THEREOF.
--------------------
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN
OFFER TO BUY, SECURITIES IN ANY STATE TO ANY PERSON TO WHOM IT IS NOT LAWFUL TO
MAKE SUCH OFFER IN SUCH STATE.
--------------------
EVEREN
Unit
Investment
Trusts
--------------------
---------------------
Prospectus
---------------------
GNMA Portfolio Series 6 (Midget)
GNMA Portfolio Series 7 (Long Term)
Insured National Series 23
Insured Michigan Series 15
July 23, 1996
EVEREN Unit Investment Trusts.
<PAGE>
This Registration Statement on Form S-6 comprises the following papers and
documents.
<TABLE>
<C> <S>
The facing sheet of Form S-6.
The cross-reference sheet.
The prospectus.
The signatures.
The following exhibits.
1.1(a). Form of Trust Indenture and Agreement for the GNMA Portfolios.
1.1(b). Form of Trust Indenture and Agreement for the Tax-Exempt Portfolios.
1.1.1(a). Standard Terms and Conditions of Trust for the GNMA Portfolios.
Reference is made to Exhibit 1.1.1(b) to the Registration Statement
on Form S-6 with respect to EVEREN Unit Investment Trusts, Series 47
(Registration No. 333-03141) as filed on May 8, 1996.
1.1.1(b). Standard Terms and Conditions of Trust for the Tax-Exempt
Portfolios. Reference is made to Exhibit 1.1.1 to the Registration
Statement on Form S-6 with respect to EVEREN Unit Investment Trusts,
Series 41 (Registration No. 333-00065) as filed on January 10, 1996.
2.1. Form of Certificate of Ownership (pages two to four, inclusive, of
the Standard Terms and Conditions of Trust included as Exhibit
1.1.1).
3.1. Opinion of counsel to the Sponsor as to legality of the securities
being registered including a consent to the use of its name under
the headings "Federal Tax Status" for each Trust and "Legal
Opinions" in the Prospectus and opinion of counsel as to the Federal
income tax status of the securities being registered.
3.2. Opinion and consent of special counsel to Insured Michigan Series 15
for Michigan tax matters.
4.1. Consent of Standard & Poor's.
4.2. Consent of Cantor Fitzgerald & Co.
4.3. Consent of Grant Thornton LLP.
Ex-27. Financial Data Schedules.
</TABLE>
S-1
<PAGE>
SIGNATURES
THE REGISTRANT, EVEREN UNIT INVESTMENT TRUSTS, SERIES 51 HEREBY IDENTIFIES
SERIES 1 OF THE KEMPER GOVERNMENT SECURITIES TRUST, SERIES 39 (GNMA
PORTFOLIO), SERIES 40 (GNMA PORTFOLIO) AND SERIES 41 (U.S. TREASURY
PORTFOLIO), MULTI-STATE SERIES 19 OF THE KEMPER TAX-EXEMPT INSURED INCOME
TRUST AND KEMPER DEFINED FUNDS INSURED NATIONAL SERIES 1 FOR PURPOSES OF THE
REPRESENTATIONS REQUIRED BY RULE 487 AND REPRESENTS THE FOLLOWING:
(1) THAT THE PORTFOLIO SECURITIES DEPOSITED IN THE SERIES AS TO THE
SECURITIES OF WHICH THIS REGISTRATION STATEMENT IS BEING FILED DO NOT
DIFFER MATERIALLY IN TYPE OR QUALITY FROM THOSE DEPOSITED IN SUCH PREVIOUS
SERIES;
(2) THAT, EXCEPT TO THE EXTENT NECESSARY TO IDENTIFY THE SPECIFIC
PORTFOLIO SECURITIES DEPOSITED IN, AND TO PROVIDE ESSENTIAL FINANCIAL
INFORMATION FOR, THE SERIES WITH RESPECT TO THE SECURITIES OF WHICH THIS
REGISTRATION STATEMENT IS BEING FILED, THIS REGISTRATION STATEMENT DOES NOT
CONTAIN DISCLOSURES THAT DIFFER IN ANY MATERIAL RESPECT FROM THOSE
CONTAINED IN THE REGISTRATION STATEMENTS FOR SUCH PREVIOUS SERIES AS TO
WHICH THE EFFECTIVE DATE WAS DETERMINED BY THE COMMISSION OR THE STAFF; AND
(3) THAT IT HAS COMPLIED WITH RULE 460 UNDER THE SECURITIES ACT OF 1933.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT,
EVEREN UNIT INVESTMENT TRUSTS, SERIES 51 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 23RD DAY OF JULY, 1996.
EVEREN UNIT INVESTMENT TRUSTS,
SERIES 51
Registrant
By: EVEREN UNIT INVESTMENT TRUSTS,
a service of EVEREN Securities,
Inc.
Depositor
/s/ Michael J. Thoms
By: _________________________________
Michael J. Thoms
S-2
<PAGE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BELOW ON JULY 23, 1996 BY THE
FOLLOWING PERSONS, WHO CONSTITUTE A MAJORITY OF THE BOARD OF DIRECTORS OF
EVEREN SECURITIES, INC.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ James R. Boris Chairman and Chief Executive Officer
- -------------------------------------------
James R. Boris
/s/ Daniel D. Williams Senior Executive Vice President, Chief
- ------------------------------------------- Financial Officer and Treasurer
Daniel D. Williams
/s/ Frank V. Geremia Senior Executive Vice President
- -------------------------------------------
Frank V. Geremia
/s/ Stephen G. McConahey President and Chief Operating Officer
- -------------------------------------------
Stephen G. McConahey
/s/ Stanley R. Fallis Senior Executive Vice President and Chief
- ------------------------------------------- Administrative Officer
Stanley R. Fallis
/s/ David M. Greene Senior Executive Vice President and
- ------------------------------------------- Director of Client Services
David M. Greene
/s/ Thomas R. Reedy Senior Executive Vice President and
- ------------------------------------------- Director of Capital Markets
Thomas R. Reedy
/s/ Janet L. Reali Executive Vice President, Corporate Counsel
- ------------------------------------------- and Corporate Secretary
Janet L. Reali
</TABLE>
/s/ Michael J. Thoms
---------------------------------------
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 EVEREN UNIT INVESTMENT TRUSTS, SERIES
39 (REGISTRATION NO. 33-63111).
S-3
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND> This schedule contains summary financial information extracted from
Amendment Number 1 to Form S-6 and is qualified in its entirety by reference to
such Amendment Number 1 to Form S-6.
</LEGEND>
<SERIES>
<NAME> GNMA PORTFOLIO
<NUMBER> 6
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-START> Jul-23-1996
<PERIOD-END> Jul-23-1996
<INVESTMENTS-AT-COST> 487,384
<INVESTMENTS-AT-VALUE> 487,384
<RECEIVABLES> 1,748
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 489,132
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,748
<TOTAL-LIABILITIES> 1,748
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 487,384
<SHARES-COMMON-STOCK> 50,000
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 487,384
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND> This schedule contains summary financial information extracted from
Amendment Number 1 to Form S-6 and is qualified in its entirety by reference to
such Amendment Number 1 to Form S-6.
</LEGEND>
<SERIES>
<NAME> GNMA PORTFOLIO
<NUMBER> 7
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JUL-23-1996
<PERIOD-END> JUL-23-1996
<INVESTMENTS-AT-COST> 484,729
<INVESTMENTS-AT-VALUE> 484,729
<RECEIVABLES> 1,913
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 486,642
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,913
<TOTAL-LIABILITIES> 1,913
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 484,729
<SHARES-COMMON-STOCK> 50,000
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 484,729
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND> This schedule contains summary financial information extracted from
Amendment Number 1 to Form S-6 and is qualified in its entirety by reference to
such Amendment Number 1 to Form S-6.
</LEGEND>
<SERIES>
<NAME> INSURED NATIONAL
<NUMBER> 20
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JUL-23-1996
<PERIOD-END> JUL-23-1996
<INVESTMENTS-AT-COST> 3,935,345
<INVESTMENTS-AT-VALUE> 3,935,345
<RECEIVABLES> 26,514
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,961,859
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 26,514
<TOTAL-LIABILITIES> 26,514
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3,935,345
<SHARES-COMMON-STOCK> 410,000
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 3,935,345
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND> This schedule contains summary financial information extracted from
Amendment Number 1 to Form S-6 and is qualified in its entirety by reference to
such Amendment Number 1 to Form S-6.
</LEGEND>
<SERIES>
<NAME> INSURED MICHIGAN
<NUMBER> 15
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JUL-23-1996
<PERIOD-END> JUL-23-1996
<INVESTMENTS-AT-COST> 2,437,188
<INVESTMENTS-AT-VALUE> 2,437,188
<RECEIVABLES> 32,011
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,469,199
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 32,011
<TOTAL-LIABILITIES> 32,011
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,469,199
<SHARES-COMMON-STOCK> 254,000
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 2,437,188
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE>
Exhibit 1.1(a)
EVEREN Unit Investment Trusts, Series 51
Trust Agreement
Dated: July 23, 1996
This Trust Agreement between EVEREN Securities, Inc., as Depositor and
Evaluator, and The Bank of New York, as Trustee, sets forth certain provisions
in full and incorporates other provisions by reference to the document entitled
"Standard Terms and Conditions of Trust for Government Securities Trusts
Sponsored by EVEREN Unit Investment Trusts, a service of EVEREN Securities, Inc.
and Subsequent Series, Effective: December 5, 1995" (herein called the "Standard
Terms and Conditions of Trust") and such provisions as are set forth in full and
such provisions as are incorporated by reference constitute a single instrument.
All references herein to Articles and Sections are to Articles and Sections of
the Standard Terms and Conditions of Trust.
WITNESSETH THAT:
In consideration of the premises and of the mutual agreements herein
contained, the Depositor and the Trustee and the Evaluator agree as follows:
PART I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the Provisions of Part II hereof, all the provisions contained
in the Standard Terms and Conditions of Trust are herein incorporated by
reference in their entirety and shall be deemed to be a part of this instrument
as fully and to the same extent as though said provisions had been set forth in
full in this instrument.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
The following special terms and conditions are hereby agreed to:
(a) The Securities defined in Section 1.01(4), listed in Schedule A
hereto, have been deposited in trust under this Trust Agreement.
(b) The fractional undivided interest in and ownership of each Trust
Fund represented by each Unit is the amount set forth under "Essential
Information--Fractional Undivided Interest per Unit" in the Prospectus.
(c) The number of Units in each Trust is that amount set forth under
"Essential Information-Number of Units" in the Prospectus.
(d) The "First General Record Date" shall be the first "Record Date"
set forth under "Essential Information" in the Prospectus.
<PAGE>
(e) The amount of the second distribution of funds from the
Interest Account shall be that amount set forth under "Essential
Information-Interest Payments-First Payment per Unit" for each Trust in the
Prospectus.
-2-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to
be duly executed.
EVEREN SECURITIES, INC.
through its EVEREN Unit Investment Trusts
service
Depositor
By Robert K. Burke
-----------------------
Senior Vice President
THE BANK OF NEW YORK
By Ted Rudish
-----------------------
Vice President
-3-
<PAGE>
SCHEDULE A
SECURITIES INITIALLY DEPOSITED
EVEREN UNIT INVESTMENT TRUSTS SERIES 47
(Note: Incorporated herein and made a part hereof is the "Portfolio" as set
forth in the Prospectus for each Trust.)
-4-
<PAGE>
Exhibit 1.1(b)
EVEREN UNIT INVESTMENT TRUSTS, SERIES 51
TRUST AGREEMENT
Dated: July 23, 1996
This Trust Agreement between EVEREN Securities, Inc., as Depositor and
Evaluator, and The Bank of New York, as Trustee, sets forth certain provisions
in full and incorporates other provisions by reference to the document entitled
"Standard Terms and Conditions of Trust for Tax-Exempt Portfolios Sponsored by
EVEREN Unit Investment Trusts, a service of EVEREN Securities, Inc. and
Subsequent Series, Effective: December 5, 1995" (herein called the "Standard
Terms and Conditions of Trust") and such provisions as are set forth in full and
such provisions as are incorporated by reference constitute a single instrument.
All references herein to Articles and Sections are to Articles and Sections of
the Standard Terms and Conditions of Trust.
WITNESSETH THAT:
In consideration of the premises and of the mutual agreements herein
contained, the Depositor and the Trustee and the Evaluator agree as follows:
PART I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the Provisions of Part II hereof, all the provisions contained
in the Standard Terms and Conditions of Trust are herein incorporated by
reference in their entirety and shall be deemed to be a part of this instrument
as fully and to the same extent as though said provisions had been set forth in
full in this instrument.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
The following special terms and conditions are hereby agreed to:
(a) The Bonds defined in Section 1.01(4), listed in Schedule A
hereto, have been deposited in trust under this Trust Agreement.
(b) The fractional undivided interest in and ownership of each Trust
Fund represented by each Unit is the amount set forth under "Essential
Information--Fractional Undivided Interest per Unit" in the Prospectus.
(c) The number of Units in each Trust is that amount set forth under
"Essential Information-Number of Units" in the Prospectus.
(d) The "First General Record Date" shall be the first "Record Date"
set forth under "Essential Information" in the Prospectus.
<PAGE>
(e) The amount of the second distribution of funds from the
Interest Account shall be that amount set forth under "Essential
Information-Interest Payments-First Payment per Unit" for each
Trust in the Prospectus.
-2-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to
be duly executed.
EVEREN SECURITIES, INC.
through its EVEREN Unit Investment Trusts
service
Depositor
By Robert K. Burke
-------------------------------
Senior Vice President
THE BANK OF NEW YORK
By Ted Rudish
-------------------------------
Vice President
<PAGE>
SCHEDULE A
Bonds Initially Deposited
EVEREN Unit Investment Trusts Series 47
(Note: Incorporated herein and made a part hereof is the "Portfolio" as
set forth in the Prospectus for each Trust.)
-4-
<PAGE>
Chapman and Cutler
111 West Monroe Street
Chicago, Illinois 60603
July 23, 1996
EVEREN Unit Investment Trusts
77 West Wacker Drive
Chicago, Illinois 60601
Re: EVEREN Unit Investment Trusts Series 51
---------------------------------------
Gentlemen:
We have served as counsel for EVEREN Unit Investment Trusts, as Sponsor and
Depositor of EVEREN Unit Investment Trusts Series 51 (the "Fund"), in connection
with the preparation, execution and delivery of Trust Agreements dated the date
of this opinion between EVEREN Unit Investment Trusts, as Depositor, and The
Bank of New York, as Trustee, pursuant to which the Depositor has delivered to
and deposited the Bonds listed in the Schedules to the Trust Agreement with the
Trustee and pursuant to which the Trustee has issued to or on the order of the
Depositor a certificate or certificates representing all the Units of fractional
undivided interest in, and ownership of, the Fund, created under said Trust
Agreement.
In connection therewith we have examined such pertinent records and
documents and matters of law as we have deemed necessary in order to enable us
to express the opinions hereinafter set forth.
Based upon the foregoing, we are of the opinion that:
1. The execution and delivery of the Trust Agreement and the execution
and issuance of certificates evidencing the Units of the Fund have been
duly authorized; and
2. The certificates evidencing the Units of the Fund, when duly executed
and delivered by the Depositor and the Trustee in accordance with the
aforementioned Trust Agreement, will constitute valid and binding
obligations of the Fund and the Depositor in accordance with the terms
thereof.
<PAGE>
-2-
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement (File No. 333-08225) relating to the Units referred to
above and to the use of our name and to the reference to our firm in said
Registration Statement and in the related Prospectus.
Respectfully submitted,
CHAPMAN AND CUTLER
<PAGE>
Chapman and Cutler
111 West Monroe Street
Chicago, Illinois 60603
July 23, 1996
EVEREN Unit Investment Trusts,
a service of EVEREN Securities, Inc.
77 West Wacker Drive, 29th Floor
Chicago, Illinois 60601
The Bank of New York
101 Barclay Street
New York, New York 10286
Re: Everen Unit Investment Trusts Series 51
(Insured National Series 20 and Insured Michigan Series 15)
Gentlemen:
We have acted as counsel for Everen Unit Investment Trusts, Depositor of
Everen Unit Investment Trusts Series 51 (Insured National Series 20 and Insured
Michigan Series 15) (collectively, the "Fund" and each a "Trust Fund"), in
connection with the issuance of Units of fractional undivided interest in the
Trust Fund of said Fund under the Trust Agreement dated July 23, 1996 (the
"Indenture") between EVEREN Unit Investment Trusts, as Depositor and Evaluator
and The Bank of New York, as Trustee.
In this connection, we have examined the Registration Statement, the form
of Prospectus proposed to be filed with the Securities and Exchange Commission,
the Indenture and such other instruments and documents as we have deemed
pertinent.
Based upon the foregoing and upon an investigation of such matters of law
as we consider to be applicable, we are of the opinion that, under existing
Federal income tax law:
(i) Each Trust Fund is not an association taxable as a corporation but
will be governed by the provisions of subchapter J (relating to trusts) of
chapter 1, Internal Revenue Code of 1986 (the "Code").
(ii) Each Unitholder will be considered as owning a pro rata share of
each asset of the respective Trust Fund in the proportion that the number
of Units of such Trust Fund held by him bears to the total number of Units
outstanding of such Trust Fund. Under subpart E, subchapter J of chapter 1
of the Code, income of each Trust Fund will be treated as income of each
Unitholder of the
<PAGE>
-2-
respective Trust Fund in the proportion described, and an item of Trust
Fund income will have the same character in the hands of a Unitholder as it
would have in the hands of the Trustee. Accordingly, to the extent that the
income of a Trust Fund consists of interest and original issue discount
excludable from gross income under Section 103 of the Code, such income
will be excludable from Federal gross income of the Unitholders, except in
the case of a Unitholder who is a substantial user (or a person related to
such user) of a facility financed through issuance of any industrial
development bonds or certain private activity bonds held by the respective
Trust Fund. In the case of such Unitholder (and no other) interest received
with respect to his Units attributable to such industrial development bonds
or such private activity bonds is includable in his gross income. In the
case of certain corporations, interest on the Bonds is included in
computing the alternative minimum tax pursuant to Section 56(c) of the
Code, the environmental tax (the "Superfund Tax") imposed by Section 59A of
the Code, and the branch profits tax imposed by Section 884 of the Code
with respect to U.S. branches of foreign corporations.
(iii) Gain or loss will be recognized to a Unitholder upon redemption or
sale of his Units. Such gain or loss is measured by comparing the proceeds
of such redemption or sale with the adjusted basis of the Units represented
by his Unit. Before adjustment, such basis would normally be cost if the
Unitholder had acquired his Units by purchase, plus his aliquot share of
advances by the Trustee to a Trust Fund to pay interest on Bonds delivered
after the Unitholder's settlement date to the extent that such interest
accrued on the Bonds during the period from the Unitholder's settlement
date to the date such Bonds are delivered to the respective Trust Fund, but
only to the extent that such advances are to be repaid to the Trustee out
of interest received by such Trust Fund with respect to such Bonds. In
addition, such basis will be increased by the Unitholder's aliquot share of
the accrued original issue discount (and market discount, if the Unitholder
elects to include market discount in income as it accrues) with respect to
each Bond held by a Trust Fund with respect to which there was an original
issue discount at the time the Bond was issued (or which was purchased with
market discount) and reduced by the annual amortization of bond premium, if
any, on Bonds held by the Trust Fund.
(iv) If the Trustee disposes of a Trust Fund asset (whether by sale,
payment on maturity, redemption or otherwise) gain or loss is recognized to
the Unitholder and the amount thereof is measured by comparing the
Unitholder's aliquot share of the total proceeds from the transaction with
his basis for his fractional interest in the asset disposed of. Such basis
is ascertained by apportioning the tax basis for his Units among each of
the Trust Fund assets (as of the date on which his Units were acquired)
ratably according to their values as of the valuation date nearest the date
on which he purchased such Units. A Unitholder's basis in his Units and of
his fractional interest in each Trust Fund
<PAGE>
-3-
asset must be reduced by the amount of his aliquot share of interest
received by the Trust Fund, if any, on Bonds delivered after the
Unitholder's settlement date to the extent that such interest accrued on
the Bonds during the period from the Unitholder's settlement date to the
date such Bonds are delivered to the Trust Fund, must be reduced by the
annual amortization of bond premium, if any, on Bonds held by the Trust
Fund and must be increased by the Unitholder's share of the accrued
original issue discount (and market discount if the Unitholder elects to
include market discount in income as it accures) with respect to each Bond
which, at the time the Bond was issued, had original issue discount (or
which was purchased with market discount).
(v) In the case of any Bond held by the Trust Fund where the "stated
redemption price at maturity" exceeds the "issue price", such excess shall
be original issue discount. With respect to each Unitholder, upon the
purchase of his Units subsequent to the original issuance of Bonds held by
the Trust Fund, Section 1272(a)(7) of the Code provides for a reduction in
the accrued "daily portion" of such original issue discount upon the
purchase of a Bond subsequent to the Bond's original issue, under certain
circumstances. In the case of any Bond held by the Trust Fund the interest
on which is excludable from gross income under Section 103 of the Code, any
original issue discount which accrues with respect thereto will be treated
as interest which is excludable from gross income under Section 103 of the
Code.
(vi) Certain bonds in the portfolios of certain of the Trust Fund have
been insured by the issuers thereof against default in the prompt payment
of principal and interest. Insurance has been obtained for such bonds, or,
in the case of a commitment, the bonds will be ultimately insured under the
terms of such an insurance policy, which are designated as issuer insured
bonds on the portfolio pages of the respective Trust Fund in the prospectus
for a Trust Fund, by the issuer of such bonds. Insurance obtained by the
issuer is effective so long as such bonds remain outstanding. For each of
these bonds, we have been advised that the aggregate principal amount of
such bonds listed on the portfolio page for the respective Trust Fund was
acquired by the applicable Trust Fund and are part of the series of such
bonds listed on the portfolio page for the respective Trust Fund in the
aggregate principal amount listed on the portfolio page for the respective
Trust Fund. Based upon the assumption that the bonds acquired by the
applicable Trust Fund are part of the series covered by an insurance policy
or, in the case of a commitment, will be ultimately insured under the terms
of such an insurance policy, it is our opinion that any amounts received by
the applicable Trust Fund representing maturing interest on such bonds will
be excludable from federal gross income if, and to the same extent as, such
interest would have been so excludable if paid in normal course by the
Issuer provided that, at the time such policies are purchased, the amounts
paid for such policies are reasonable, customary and consistent with the
reasonable
<PAGE>
-4-
expectation that the Issuer of the bonds, rather than the insurer, will pay
debt service on the bonds. Paragraph (ii) of this opinion is accordingly
applicable to such payment.
Sections 1288 and 1272 of the Code provide a complex set of rules governing
the accrual of original issue discount. These rules provide that original issue
discount accrues either on the basis of a constant compound interest rate or
ratably over the term of the Bond, depending on the date the Bond was issued. In
addition, special rules apply if the purchase price of a Bond exceeds the
original issue price plus the amount of original issue discount which would have
previously accrued based upon its issue price (its "adjusted issue price"). The
application of these rules will also vary depending on the value of the bond on
the date a Unitholder acquires his Units, and the price the Unitholder pays for
his Units.
Because the Trust Funds do not include any "private activity" bonds within
the meaning of Section 57 (a)(5) of the Code issued on or after August 8, 1986,
none of the Trust Funds' interest income shall be treated as an item of tax
preference when computing the alternative minimum tax. In the case of
corporations, for taxable years beginning after December 31, 1986, the
alternative minimum tax and the Superfund Tax depend upon the corporation's
alternative minimum taxable income ("AMTI") which is the corporation's taxable
income with certain adjustments.
Pursuant to Section 56(c) of the Code, one of the adjustment items used in
computing AMTI and the Superfund Tax of a corporation (other than an S
Corporation, Regulated Investment Company, Real Estate Investment Trust or
REMIC) for taxable years beginning after 1989, is an amount equal to 75% of the
excess of such corporation's "adjusted current earnings" over an amount equal to
its AMTI (before such adjustment item and the alternative tax net operating loss
deduction). "Adjusted current earnings" includes all tax-exempt interest,
including interest on all Bonds in a Trust Fund, and tax-exempt original issue
discount. Under current Code provisions, the Superfund Tax does not apply to tax
years beginning on or after January 1, 1996. However, the Superfund Tax could be
extended retroactively.
Effective for tax returns filed after December 31, 1987, all taxpayers are
required to disclose to the Internal Revenue Service the amount of tax-exempt
interest earned during the year.
Section 265 of the Code provides for a reduction in each taxable year of
100 percent of the otherwise deductible interest on indebtedness incurred or
continued by financial institutions, to which either Section 585 or Section 593
of the Code applies, to purchase or carry obligations acquired after August 7,
1986, the interest on which is exempt from Federal income taxes for such taxable
year. Under rules prescribed by Section 265, the amount of interest otherwise
deductible by such financial institutions in any taxable year which is deemed to
be attributable to tax-exempt obligations acquired after August 7, 1986,
<PAGE>
-5-
will be the amount that bears the same ratio to the interest deduction otherwise
allowable (determined without regard to Section 265) to the taxpayer for the
taxable year as the taxpayer's average adjusted basis (within the meaning of
Section 1016) of tax-exempt obligations acquired after August 7, 1986, bears to
such average adjusted basis for all assets of the taxpayer, unless such
financial institution can otherwise establish, under regulations, to be
prescribed by the Secretary of the Treasury, the amount of interest on
indebtedness incurred or continued to purchase or carry such obligations. On
December 7, 1995 the U.S. Treasury Department released proposed legislation
that, if adopted, would generally extend the financial institution rules to all
corporations, effective for obligations acquired after the date of announcement.
We also call attention to the fact that, under Section 265 of the Code,
interest on indebtedness incurred or continued to purchase or carry Units is not
deductible for Federal income tax purposes. Under rules used by the Internal
Revenue Service for determining when borrowed funds are considered used for the
purpose of purchasing or carrying particular assets, the purchase of Units may
be considered to have been made with borrowed funds even though the borrowed
funds are not directly traceable to the purchase of Units. However, these rules
generally do not apply to interest paid on indebtedness incurred for
expenditures of a personal nature such as a mortgage incurred to purchase or
improve a personal residence.
"The Revenue Reconciliation Act of 1993" (the "Tax Act") subjects tax-
exempt bonds to the market discount rules of the Code effective for bonds
purchased after April 30, 1993. In general, market discount is the amount (if
any) by which the stated redemption price at maturity exceeds an investor's
purchase price (except to the extent that such difference, if any, is
attributable to original issue discount not yet accrued) subject to a statutory
de minimis rule. Market discount can arise based on the price a Trust Fund pays
for Bonds or the price a Unitholder pays for his or her Units. Under the Tax
Act, accretion of market discount is taxable as ordinary income; under prior
law, the accretion had been treated as capital gain. Market discount that
accretes while a Trust Fund holds a Bond would be recognized as ordinary income
by the Unitholders when principal payments are received on the Bonds, upon sale
or at redemption (including early redemption), or upon the sale or redemption of
his or her Units, unless a Unitholder elects to include market discount in
taxable income as it accrues.
<PAGE>
-6-
The scope of this opinion is expressly limited to the matters set forth
herein, and, except as expressly set forth above, we express no opinion with
respect to any other taxes, including state or local taxes or collateral tax
consequences with respect to the purchase, ownership and disposition of Units.
Very truly yours,
CHAPMAN AND CUTLER
MJK/ch
<PAGE>
EXHIBT 3.2
Miller, Canfield, Paddock and Stone, P.L.C.
1400 North Woodward Avenue
Bloomfield Hills, Michigan 48303-2014
July 23, 1996
EVEREN Unit Investment Trusts, a division
of EVEREN Securities, Inc.
77 West Wacker Drive
Chicago, Illinois 60601
The Bank of New York through its
Wall Street Trust division as
Trustee of the EVEREN Unit Investment
Trusts, Series 51
101 Barclay Street
New York, New York 10286
Re: EVEREN Unit Investment Trusts, Series 51
Insured Michigan Series 15
Gentlemen:
We have acted as special Michigan counsel to you as Depositor and Trustee
of EVEREN Unit Investment Trusts, Series 51 -- Insured Michigan Series 15 (the
"Insured Michigan Trust") referred to above (the "Fund") . You have asked that
we, acting in such capacity, render an opinion to you with respect to certain
matters relating to the issuance of the units of fractional undivided interest
in the Fund (the "Units") pursuant to a Registration Statement on Form S-6 filed
with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Registration Statement").
You have requested our opinion as to the applicability to the Insured
Michigan Trust (the "Michigan Trust") and the holders of Units (the
"Unitholders") , each of which Units represents the ownership of a specified
fractional undivided interest in the assets of the Michigan Trust, of the
Michigan Income Tax Act (M.C.L.A. (S)(S)206.1 et seq.; M.S.A. (S)(S)7.557(101)
et seq.) (the "Michigan Income Tax"), the City Income Tax Act (M.C.L.A.
(S)(S)141.501 et seq.; M.S.A. (S)(S)5.3194(1) et seq.) , which incorporates the
"Uniform City Income Tax ordinance," the First Class School District excise tax
upon income (M.C.L.A. (S)380.451; M.S.A. (S)(S)15.4451) (collectively, the
"income tax laws"), the Michigan Single Business Tax Act (M.C.L.A. (S)(S)208.1
et seq.; M.S.A. (S)(S)7.558(1) et seq.) (the "Single Business Tax") and the
Michigan Tax on ownership of Intangible Personal Property (M.C.L.A.
(S)(S)205.131 et seq.; M.S.A. (S)(S)7.556(1) et seq.) (the "Intangibles Tax").
The Intangibles Tax is being phased out, with reductions of twenty-five percent
(25%) in 1994 and 1995, fifty percent (50%) in 1996, and seventy-five percent
(75%) in 1997, with total repeal effective January 1, 1998 PA 4 and 5). You
have also requested our opinion
<PAGE>
Miller, Canfield, Paddock and Stone
July 23, 1996
Page 2
regarding the tax status of proceeds payable from an insurance policy to be
obtained by either the Fund or by the issuer of the Bonds involved, guaranteeing
prompt payment of principal and interest on all Bonds in the portfolio of the
Fund.
The Michigan Trust, its formation, its proposed method of operation, the
rights of owners of Certificates representing Units, the nature of such
ownership and the portfolio of investments of the Michigan Trust are described
and set forth in the Prospectus dated July 23, 1996, filed with the Securities
and Exchange Commission in Registration No. 333-08225. In giving our opinion set
forth hereunder, we have relied upon the facts contained in such Registration
Statement, including the fact that, at the respective dates of issuance of the
underlying Debt Obligations, opinions of bond counsel to the respective Michigan
authorities issuing such Debt Obligations were given with respect to the
validity of the Debt obligations and the exemption of the same, and of the
interest thereon, from Michigan taxation.
Based on the above, it is our opinion that:
The Michigan Trust and the owners of Units will, in our opinion, be treated
for purposes of the Michigan income tax laws and the Single Business Tax in
substantially the same manner as they are for purposes of the Federal income tax
laws, as currently enacted. Accordingly, we have relied upon the opinion of
Messrs. Chapman and Cutler as to the applicability of Federal income tax under
the Internal Revenue Code of 1986, as currently amended, to the Michigan Trust
and the Unitholders.
Under the income tax laws of the State of Michigan, the Michigan Trust is
not an association taxable as a corporation; the income of the Michigan Trust
will be treated as the income of the Unitholders of the Michigan Trust and be
deemed to have been received by them when received by the Michigan Trust.
Interest on the Debt Obligations in the Michigan Trust which is exempt from tax
under the Michigan income tax laws when received by the Michigan Trust will
retain its status as tax exempt interest to the Unitholders of the Michigan
Trust.
For purposes of the Michigan income tax laws, each Unitholder of the
Michigan Trust will be considered to have received his pro rata share of
interest on each Debt Obligation in the Michigan Trust when it is received by
the Michigan Trust, and each Unitholder will have a taxable event when the
Michigan Trust disposes of a Debt Obligation (whether by sale, exchange,
redemption or payment at maturity) or when the Unitholder redeems or sells his
Unit, to the extent the transaction constitutes a taxable event for Federal
income tax purposes. The tax cost of each Unit to a Unitholder will be
established and allocated for purposes of the Michigan income tax laws in the
same manner as such cost is established and allocated for Federal income tax
purposes.
Under the Michigan Intangibles Tax, the Michigan Trust is not taxable and
the pro rata ownership of the underlying Debt Obligations, as well as the
interest thereon, will be exempt to the Unitholders to the extent the Michigan
Trust consists of obligations of the
<PAGE>
Miller, Canfield, Paddock and Stone
July 23, 1996
Page 3
State of Michigan or its political subdivisions or municipalities, or of
obligations of the Commonwealth of Puerto Rico, Guam or of the United States
Virgin Islands.
The Michigan Single Business Tax replaced the tax on corporate and
financial institution income under the Michigan Income Tax, and the intangible
tax with respect to those intangibles of persons subject to the Single Business
Tax the income from which would be considered in computing the Single Business
Tax. Persons are subject to the Single Business Tax only if they are engaged in
"business activity," as defined in the Act. Under the Single Business Tax, both
interest received by the Michigan Trust on the underlying Debt Obligations and
any amount distributed from the Michigan Trust to a Unitholder, if not included
in determining taxable income for Federal income tax purposes, is also not
included in the adjusted tax base upon which the Single Business Tax is
computed, of either the Michigan Trust or the Unitholders. If the Michigan Trust
or the Unitholders have a taxable event for Federal income tax purposes when the
Michigan Trust disposes of a Debt Obligation (whether by sale, exchange,
redemption or payment at maturity) or the Unitholder redeems or sells his Unit,
an amount equal to any gain realized from such taxable event which was included
in the computation of taxable income for Federal income tax purposes (plus an
amount equal to any capital gain of an individual realized in connection with
such event but excluded in computing that individual's Federal taxable income)
will be included in the tax base against which, after allocation, apportionment
and other adjustments, the Single Business Tax is computed. The tax base will be
reduced by an amount equal to any capital loss realized from such a taxable
event, whether or not the capital loss was deducted in computing Federal taxable
income in the year the loss occurred. Unitholders should consult their tax
advisor as to their status under Michigan law.
Any proceeds paid under an insurance policy issued to the Trustee of the
Fund, or paid under individual policies obtained by issuers of Bonds, which,
when received by the Unitholders, represent maturing interest on defaulted
obligations held by the Trustee, will be excludable from the Michigan income tax
laws and the Single Business Tax if, and to the same extent as, such interest
would have been so excludable if paid by the issuer of the defaulted
obligations. While treatment under the Michigan Intangibles Tax is not premised
upon the characterization of such proceeds under the Internal Revenue Code, the
Michigan Department of Treasury should adopt the same approach as under the
Michigan income tax laws and the Single Business tax.
Chapman and Cutler of 111 West Monroe Street, Chicago, Illinois 60603, are
entitled to rely on this opinion as though it were addressed to them.
We also advise you that, as the Tax Reform Act of 1986 eliminates the
capital gain deduction for tax years beginning after December 31, 1986, the
federal adjusted gross income, the computation base for the Michigan Income Tax,
of a Unitholder will be increased accordingly to the extent such capital gains
are realized when the Michigan Trust disposes of a Debt obligation or when the
Unitholder redeems or sells a Unit, to the extent such transaction constitutes a
taxable event for Federal income tax purposes.
<PAGE>
Miller, Canfield, Paddock and Stone
July 23, 1996
Page 4
We hereby consent to the reference to Miller, Canfield, Paddock and Stone
under the heading "Michigan Tax Status" in the Prospectus relating to the
Michigan Trust which is part of the Registration Statement in Registration No.
333-08225 filed with the Securities and Exchange Commission under the Securities
Act of 1933, as amended, and to the filing of this opinion as an exhibit to said
registration statement.
Yours very truly,
Miller, Canfield, Paddock and Stone, P.L.C.
<PAGE>
EXHIBIT 4.1
STANDARD & POOR'S,
A DIVISION OF McGRAW-HILL, INC.
25 Broadway
New York, New York 10004-1064
Telephone 212/208-1740
FAX 212/208-8262
Sanford B. Bragg
Managing Director
Managed Funds Ratings Services
Everen Unit Investment Trusts
77 West Wacker Drive - 29th Floor
Chicago, IL 60601
Re: Everen Unit Investment Trusts Series 51, containing: GNMA Portfolio
Series 6, GNMA Portfolio Series 7, Insured National
Series 20 and Insured Michigan Series 15
Pursuant to your request for a Standard & Poor's rating on the
units of the above-captioned Trust, SEC #333-08225, we have reviewed the
information presented to us and have assigned a 'AAA' rating to the units of the
Trust and a 'AAA' rating to the securities contained in the Trust. The ratings
are direct reflections of the portfolios of the Trust, which will be composed
solely of securities covered by bond insurance policies that insure against
default in the payment of principal and interest on the securities so long as
they remain outstanding. Since the policies on the insured securities have been
issued by one or more insurance companies which have been assigned 'AAA' claims
paying ability ratings by Standard & Poor's, Standard & Poor's has assigned a
'AAA' rating to the units of the Trust and to the securities contained in the
Trust.
You have permission to use the name of Standard & Poor's and the
above-assigned ratings in connection with your dissemination of information
relating to these units, provided that it is understood that the ratings are not
"market" ratings nor recommendations to buy, hold, or sell the units of the
trusts or the securities contained in the trusts. Further, it should be
understood the rating on the units does not take into account the extent to
which trust expenses or portfolio asset sales for less than the trust's purchase
price will reduce payment to the unit holders of the interest and principal
required to be paid on the portfolio assets. S&P reserves the right to advise
its own clients, subscribers, and the public of the ratings. S&P relies on the
sponsor and its counsel, accountants, and other experts for the accuracy and
completeness of the information submitted in connection with the ratings. S&P
does not independently verify the truth or accuracy of any such information.
This letter evidences our consent to the use of the name of Standard &
Poor's in connection with the rating assigned to the units in the registration
statement or prospectus relating to the units or the trusts. However, this
letter should not be construed as a consent by us, within the meaning of Section
7 of the Securities Act of 1933, to the use of the name of Standard & Poor's
Ratings Group in connection with the ratings assigned to the securities
contained in the trusts. You are hereby authorized to file a copy of this letter
with the Securities and Exchange Commission.
Please be certain to send us three copies of your final prospectus as
soon as it becomes available. Should we not receive them within a reasonable
time after the closing or should they not conform to the representations made to
us, we reserve the right to withdraw the rating.
<PAGE>
We are pleased to have had the opportunity to be of service to you.
If we can be of further help, please do not hesitate to call upon us.
Sincerely,
/s/ Sanford Bragg/WD
<PAGE>
EXHIBIT 4.2
[CANTOR FITZGERALD LOGO AND LETTERHEAD]
EVEREN Securities, Inc.
Unit Trust Department 29th Floor
77 West Wacker Drive
Chicago, Illinois 60601
Re: EVEREN Unit Investment Trusts, Series 51
Gentlemen:
You have provided to us and we have examined Registration Statement File No.
333-03467 for the above captioned trust. We hereby acknowledge that Cantor
Fitzgerald & Co. ("Cantor") will act as the evaluator for the trust pursuant to
the terms and conditions of the Information Evaluation Service Agreement between
Cantor and EVEREN Securities, Inc. ("EVEREN") dated as of October 13, 1995 (the
"IES Agreement"). We hereby consent to the use in the Registration Statement of
the reference to Cantor Fitzgerald & Co. as evaluator.
You acknowledge that this letter shall not confer upon you any rights or impose
on Cantor any obligations, other than those expressly set forth in the IES
Agreement.
You are hereby authorized to file a copy of this letter with the Securities and
Exchange Commission.
Very truly yours,
CANTOR FITZGERALD & CO.,
By: /s/ Debra Walton
Debra Walton
Managing Director
Acknowledged and Agreed:
EVEREN SECURITIES, INC.
By:
[CANTOR FITZGERALD LETTERHEAD]
<PAGE>
EXHIBIT 4.3
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' CONSENT
-------------------------------------------------
We have issued our report dated July 23, 1996 on the statements of
condition and related securities portfolios of EVEREN Unit Investment Trusts
Series 51 as of July 23, 1996 contained in the Registration Statement on Form
S-6 and in the Prospectus. We consent to the use of our report in the
Registration Statement and in the Prospectus and to the use of our name as it
appears under the caption "General Information-Independent Certified Public
Accountants".
GRANT THORNTON LLP
Chicago, Illinois
July 23, 1996
