File No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
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FORM S-6
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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:
RANSON UNIT INVESTMENT TRUSTS, SERIES 57
B. NAME OF DEPOSITOR:
RANSON & ASSOCIATES, INC.
C. COMPLETE ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES:
250 North Rock Road, Suite 150
Wichita, Kansas 67206-2241
D. NAME AND COMPLETE ADDRESS OF AGENT FOR SERVICE:
ALEX R. MEITZNER MARK J. KNEEDY
Ranson & Associates, Inc. Chapman and Cutler
250 North Rock Road, Suite 150 111 West Monroe Street
Wichita, Kansas 67206-2241 Chicago, Illinois 60603
E. Title and amount of securities being registered: An indefinite number
of Units pursuant to Rule 24f-2 promulgated under the Investment
Company Act of 1940, as amended.
F. Proposed maximum offering price to the public of the securities being
registered: Indefinite
G. Amount of filing fee, computed at one-thirty-third of 1 percent of the
proposed maximum aggregate offering price to the public: Not Applicable
H. Approximate date of proposed sale to the public:
As soon as practicable after the Effective Date
of the Registration Statement
* 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.
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<PAGE>
RANSON UNIT INVESTMENT TRUSTS
SERIES 57
CROSS REFERENCE SHEET
Pursuant to Rule 404(c) of Regulation C
under the Securities Act of 1933
(Form N-8B-2 Items Required by Instruction
1 as to Prospectus on Form S-6)
Form N-8B-2 Item Number Form S-6 Heading in Prospectus
I. ORGANIZATION AND GENERAL INFORMATION
1. (a) Name of trust )
(b) Title of securities issued ) Prospectus Front Cover Page
2. Name and address of Depositor ) Sponsor Information
3. Name and address of Trustee ) Trustee Information
4. Name and address of principal ) Sponsor Information
underwriter
5. Organization of trust ) Summary of the Trust
6. Execution and termination of ) Summary of the Trust
Trust Indenture and Agreement
7. Changes of Name ) *
8. Fiscal year ) *
9. Material Litigation ) Description of Trust Portfolio-
) General
II. GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST
10. General information regarding ) General Summary of Information
trust's securities and rights )
of security holders ) Redemption and Repurchase
) of Units
) Description of Trust Portfolio-
) General
) Other Rights of Certificate-
) holders
) Sponsor Information
) Trustee Information
) Tax Status
11. Type of securities comprising ) Prospectus Front Cover Page
units )
12. Certain information regarding )*
periodic payment certificates )
<PAGE>
13. (a) Loan, fees, charges and )
expenses ) Prospectus Front Cover Page
) Summary of Essential Financial
) Information
) Estimated Current Return
) Accrued Interest
) Public Offering Information
) Expenses of the Trust
(b) Certain information regarding )
periodic payment plan certificates ) *
(c) Certain percentages ) Prospectus Front Cover Page
) Summary of Essential Financial
) Information
) Estimated Current Return
) Public Offering Information
) Accrued Interest
) Sponsor Information
)
(d) Certain other fees, ) Other Rights of Certificate-
expenses or charges ) holders
payable by holders )
(e) Certain profits to be received )
by depositor, principal underwriter, ) Sponsor Information
trustee or any affiliated persons )
(f) Ratio of annual charges to income ) *
14. Issuance of trust's securities ) Summary of the Trust
) Public Offering Information
15. Receipt and handling of payments ) *
from purchasers )
) Trust Administration
16. Acquisition and disposition of ) Summary of the Trust
underlying securities ) Description of Trust Portfolio
) Trustee Information
17. Withdrawal or redemption ) Redemption and Repurchase
) of Units
) Sponsor Information
18. (a) Receipt and disposition ) Prospectus Front Cover Page
of income ) Accrued Interest
) Distributions of Interest and
) Principal
(b) Reinvestment of distributions ) *
(c) Reserves or special funds ) Expenses of the Trust
) Summary of the Trust
(d) Schedule of distributions ) *
19. records, accounts and reports ) Other Rights of Certificate-
) holders
20. Certain miscellaneous provisions ) Summary of the Trust
of Trust Agreement ) Sponsor Information
) Trustee Information
21. Loans to security holders ) *
22. Limitations on liability ) Summary of the Trust
23. Bonding arrangements ) *
24. Other material provisions of ) *
trust indenture or agreement )
<PAGE>
III. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR
25. Organization of Depositor ) Sponsor Information
26. Fees received by Depositor ) *
27. Business of Depositor ) Sponsor Information
28. Certain information as to )
officials and affiliated ) *
persons of Depositor )
29. Companies owning securities of ) *
Depositor )
30. Controlling persons of Depositor ) *
31. Compensation of Officers of Depositor ) *
32. Compensation of Directors ) *
33. Compensation to Employees ) *
34. Compensation to other persons ) *
IV. DISTRIBUTION AND REDEMPTION OF SECURITIES
35.Distribution of trust's securities ) Prospectus Front Cover Page
by states ) Objectives of the Trust
36.Suspension of sales of trust's ) *
securities )
37.Revocation of authority to ) *
distribute securities )
38. (a) Method of distribution )
(b) Underwriting agreements ) Public Offering Information
(c) Selling agreement )
39. (a) Organization of principal )
underwriter ) Sponsor Information
(b) N.A.S.D. membership by )
principal underwriter )
)
40. Certain fees received by ) *
principal underwriter )
41. (a) Business of principal ) Sponsor Information
underwriter )
(b) Branch offices or principal ) *
underwriter )
(c) Salesmen or principal ) *
underwriter )
42. Ownership of securities of the trust ) *
43. Certain brokerage commissions ) *
received by principal underwriter )
44. (a) Method of valuation ) Prospectus Front Cover Page
) Summary of Essential Financial
) Information
) Public Offering Information
) Accrued Interest
) Redemption and Repurchase
) of Units
(b) Schedule as to offering ) *
price )
(c) Variation in offering ) Accrued Interest to Carry
price to certain persons ) Public Offering Information
45. Suspension of redemption rights ) *
<PAGE>
46. (a) Redemption valuation ) Estimated Current Return
) Accrued Interest
) Public Offering Information
) Redemption and Repurchase
) of Units
(b) Schedule as to redemption ) *
price )
47. Purchase and sale of interests ) Sponsor Information
in underlying securities ) Redemption and Repurchase
) of Units
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. Organization and regulation of ) Trustee Information
trustee )
49. Fees and expenses of trustee ) Summary of Essential Financial
) Information
) Expenses of the Trust
)
50. Trustee's lien ) Accrued Interest
) Distribution of Interest and
) Principal
) Expenses of the Trust
VI. INFORMATION CONCERNING INSURANCE OF HOLDERS OF SECURITIES
51. Insurance of holders of trust's )
securities ) *
52. (a) Provisions of trust agreement ) Trustee Information
with respect to replacement or ) Description of Trust Portfolio-
elimination of portfolio securities ) Replacement Bonds
(b) Transactions involving )
elimination of underlying securities ) *
(c) Policy regarding substitution or ) Trustee Information
elimination of underlying securities ) Description of Trust Portfolio-
) Replacement Bonds
(d) Fundamental policy not ) *
otherwise covered )
53. Tax status of trust ) Tax Status
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. Trust's securities during ) *
last ten years )
55. )
56. Certain information regarding ) *
57. )
58. )
59. Financial statements (Instructions ) Report of Allen, Gibbs &
1(c) to Form S-6) ) Houlik, L.C. Independent
) Auditors
) Statement of Net Assets
<PAGE>
Preliminary Prospectus Dated May 2, 1997
Subject to Completion
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell
or the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any such state.
<PAGE>
PROSPECTUS RANSON UNIT INVESTMENT TRUSTS, SERIES 57
NATIONAL SERIES
______UNITS
THE TRUST. Ranson Unit Investment Trusts, Series 57 consists of one
underlying unit investment trust, the National Series (the "Trust") The Trust
initially consists of bonds and delivery statements relating to contracts to
purchase bonds and, thereafter, will consist of a $___________ aggregate
principal amount portfolio comprised of interest bearing obligations issued
by or on behalf of municipalities or other governmental authorities (the
"Bonds" or "Securities"). In the opinion of counsel, interest income to the
Trust and to Certificateholders, with certain exceptions, is exempt under
existing law from Federal income taxes, but may be subject to the Federal
alternative minimum tax and other state and local taxes. Capital gains, if
any, are subject to tax. In addition, the interest income of each Bond is, in
the opinion of recognized bond counsel to the issuing governmental
authorities, exempt from certain state and local taxes, when held by
residents of the state where the issuers of the Bond is located. The
objectives of the Trust include 1) interest income which is exempt from
Federal income taxes, 2) conservation of capital, and 3) liquidity of
investment (see "Objectives of the Trust"). The payment of interest and the
preservation of capital are dependent upon the continuing ability of the
issuers and/or obligors of the Bonds to meet their respective obligations.
Certain of the Bonds are obligations which derive their payment from mortgage
loans. A substantial portion of such bonds will probably be redeemed prior
to their scheduled maturities; any such early redemption will reduce the
aggregate principal amount of the Trust and may also affect the Estimated
Long-Term Return and the Estimated Current Return. The Sponsor has a limited
right to substitute other tax-exempt bonds in the Trust portfolio in the
event of a failed contract. There is no assurance that the Trust's
objectives will be met. The Sponsor of the Trust is Ranson & Associates,
Inc., Suite 150, 250 North Rock Road, Wichita, Kansas 67206.
PUBLIC OFFERING PRICE. The Public Offering Price of the Units during the
initial offering period is equal to the aggregate offering price of the Bonds
in the portfolio divided by the number of Units outstanding, plus a sales
charge equal to 2.00% of the Public Offering Price (2.041% of the aggregate
offering price of the Bonds). After the initial public offering period, the
secondary market public offering price will be equal to the aggregate bid
price of the Bonds in the portfolio of the Trust divided by the number of
Units outstanding, plus a sales charge of 2.00% of the Public Offering Price
(2.041% of the aggregate bid price of the Bonds). If the Bonds in the Trust
were available for direct purchase by investors, the purchase price of the
Bonds would not include the sales charge included in the Public Offering
Price of the Units. In addition, on transactions entered into on and after
_________, 1997, there will be added an amount equal to the accrued interest
from ________, 1997 to the date of settlement (three business days after
order) less distributions from the Interest Account subsequent to _________,
1997 (the "First Settlement Date"). If Units were available for purchase at
the opening of business on the Date of Deposit, the Public Offering Price per
Unit would have been $_______. See "Public Offering Information." The
value of the Bonds will fluctuate with market and credit conditions,
including any changes in interest rate levels.
Units of the Trust 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
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.
Please read this Prospectus and retain it for future reference.
The date of this Prospectus is May 5, 1997.
RANSON & ASSOCIATES, INC.
SPONSOR
<PAGE>
THE UNITS. Each Unit represents a fractional undivided interest in the
principal and net income of the Trust in the ratio of one Unit for each
$______ principal value of Bonds originally deposited in the Trust.
Initially, Units will be offered for sale in the minimum amount of five
Units.
DISTRIBUTIONS. Distributions of interest received by the Trust will be made
on a monthly basis (pro-rated on an annual basis). The first distribution to
Certificateholders will be made on _______ 1997 to holders of record on
__________, 1997, and thereafter distributions will be made monthly on the
first day of each month to record holders on the fifteenth day of the
preceding month. Distributions of funds in the Principal Account, if any,
will also be made monthly on the first day of each month to record holders on
the fifteenth day of the preceding month.
ESTIMATED CURRENT RETURN AND ESTIMATED LONG-TERM RETURN. The Estimated
Current Return and Estimated Long-Term Return to Certificateholders as of
__________, 1997, the business day prior to the Date of Deposit, were as set
forth under "Summary of Essential Financial Information." The methods of
calculating Estimated Current Return and Estimated Long-Term Return are set
forth in the footnotes to "Summary of Essential Financial Information."
REDEMPTION AND MARKET FOR UNITS. A Certificateholder may redeem Units at the
office of the Trustee, The Bank of New York ("BONY"), at prices based upon
the bid prices of the Bonds (see "Redemption and Repurchase of Units").
2
<PAGE>
RANSON UNIT INVESTMENT TRUSTS
SERIES 57
SUMMARY OF ESSENTIAL FINANCIAL INFORMATION
As of May 2, 1997, the business day prior to the Date of Deposit
SPONSOR AND EVALUATOR: RANSON & ASSOCIATES, INC.
TRUSTEE: THE BANK OF NEW YORK
<TABLE>
<S> <C>
Principal Amount of Bonds in Trust(1) $
Number of Units
Fractional Undivided Interest in Trust per Unit
Principal Amount (Par Value) of Bonds per Unit(1) $
Aggregate Offering Price of Bonds in the Trust $
Aggregate Offering Price of Bonds per Unit $
Plus Sales Charge 2.00% (2.041% of the Aggregate Offering Price of the Bonds) $
Public Offering Price per Unit(2) $
Redemption Price per Unit(3) $
Excess of Public Offering Price per Unit Over Redemption Price per Unit $
Excess of Public Offering Price per Unit Over Sponsor's Initial Repurchase
Price per Unit $
Estimated Annual Interest Income per Unit $
Less: Estimated Annual Expense per Unit $
Estimated Annual Net Interest Income per Unit $
Estimated Daily Rate of Net Interest Income Accrual per Unit $
Estimated Current Return(4)(5)(6)
Estimated Long-Term Return(5)(6)
Initial Distribution(_____, 1997) $______ per Unit
First Settlement Date _________, 1997
Minimum Principal Distribution $1.00 per Unit
Mandatory Termination Date ____________
Minimum Principal Amount of Bonds of Trust Under Which
Indenture May Be Terminated $__________
</TABLE>
<TABLE>
<S> <C>
Distribution Dates First day of every month commencing _________, 1997
Trustee's Annual Fee $.50 per $1,000 principal amount of Bonds, exclusive of
expenses of the Trust.
Evaluator's Annual Fee $.10 per $1,000 principal amount of Bonds
Sponsor's Annual Surveillance Fee $.20 per $1,000 principal amount of Bonds
Estimated Annual Organizational Expenses(8) $.____ per Unit
</TABLE>
Evaluations for purpose of sale, purchase or redemption of Units are made as
of 3:15 P.M. Central time on days of trading on the New York Stock Exchange
next following receipt of an order for a sale or purchase of Units or receipt
by the Trustee of Units tendered for redemption.
(1) Many unit investment trusts comprised of municipal securities issue a
number of units such that each unit represents approximately $1,000
principal amount of underlying securities. The Sponsor on the other hand
in determining the number of Trust Units has elected not to follow this
format but rather to provide for that number of Units which will
establish as of the Date of Deposit a Public Offering Price per Unit of
approximately $1,000. Because certain of the Bonds may from time to time
3
<PAGE>
under certain circumstances be sold or redeemed or will be called or
mature in accordance with their terms (including the call or sale of zero
coupon bonds at prices less than par value), there is no guarantee that
the value of a Unit at the Trust's termination will be equal to the
Principal Amount (Par Value) of Bonds per Unit stated above.
(2) No accrued interest will be added for any person contracting to purchase
Units on the Date of Deposit. Anyone ordering Units after such date will
pay accrued interest from the First Settlement Date to the date of
settlement (three business days after order) less distributions from the
Interest Account subsequent to the First Settlement Date. A person will
become the owner of Units on the date of settlement provided payment has
been received.
(3) Plus accrued interest to the settlement date in the case of sale or to
the date of tender in the case of redemption.
(4) The Estimated Current Return and Estimated Long-Term Return are increased
for transactions entitled to a reduced sales charge (see "Public Offering
Information").
(5) 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 and the Evaluator and with the principal
prepayment, redemption, maturity, exchange or sale of Securities while
the Public Offering Price will vary with changes in the offering price of
the underlying Securities; therefore, there is no assurance that the
present Estimated Current Return indicated above will be realized in the
future. The Estimated Long-Term Return is calculated using a formula
which (1) takes into consideration, and determines and factors in the
relative weightings of, the market values, yields (which takes into
account the amortization of premiums and the accretion of discounts) and
estimated retirements of all of the Bonds in the Trust and (2) takes into
account a compounding factor and the expenses and sales charge
associated with each Trust Unit. Since the market values and estimated
retirements of the Bonds and the expenses of the Trust will change, there
is no assurance that the present Estimated Long-Term Return as indicated
above will be realized in the future. The Estimated Current Return and
Estimated Long-Term Return are expected to differ because the calculation
of the Estimated Long-Term Return reflects the estimated date and amount
of principal returned while the Estimated Current Return calculation
includes only net annual interest income and Public Offering Price.
Neither rate reflects the true return to Certificateholders which is
lower because neither includes the effect of the delay in the first
payment to Certificateholders.
(6) These figures are based on estimated per Unit cash flows. Estimated cash
flows will vary with changes in fees and expenses, with changes in
current interest rates and with the principal prepayment, redemption,
maturity, call, exchange or sale of the underlying Securities. The
estimated cash flows for this Trust are set forth under the section
titled "Estimated Cash Flows to Unitholders."
(7) The Trust (and therefore Unitholders) will bear all or a portion of its
organizational costs (including costs of preparing the registration
statement, the trust indenture and other closing documents, registering
Units with the Securities and Exchange Commission and states, the initial
audit of the portfolio and the initial fees and expenses of the Trustee
but not including the expenses incurred in the preparation and printing
of brochures and other advertising materials and any other selling
expenses) as is common for mutual funds. It is intended that total
organizational expenses will be amortized over five years. See "Expenses
of the Trust" and "Statement of Net Assets." Historically, the sponsors
of unit investment trusts have paid all the costs of establishing such
trusts.
4
<PAGE>
SUMMARY OF THE TRUST
The Trust is one of a series of unit investment trusts created under the
laws of the State of New York pursuant to a Trust Indenture and Agreement,
dated May 5, 1997 (the "Indenture"), between Ranson & Associates, Inc., as
Sponsor, and The Bank of New York, as Trustee.
The Trust consists of a portfolio of interest bearing obligations (or
delivery statements relating to contracts to purchase obligations) issued by
or on behalf of states and political subdivisions, municipalities and
authorities thereof, the interest on which is excludable, in the opinion of
recognized bond counsel, from Federal gross income. However, in the case of
corporations, interest on all obligations held by the Trust may be subject to
the alternative minimum tax for Federal income tax purposes. Accordingly,
the Trust may be appropriate only for investors who are not subject to the
alternative minimum tax. See "Tax Status (Federal, State, Capital Gains)."
An investment in the Trust should be made with an understanding of the risks
associated with an investment in such obligations. Fluctuations in interest
rates may cause corresponding fluctuations in the value of the Bonds in the
portfolio. The Sponsor cannot predict whether the value of the Bonds in the
portfolio will increase or decrease.
On the Date of Deposit, the Sponsor deposited with the Trustee an
aggregate of $__________ principal amount of interest-bearing obligations,
including delivery statements relating to contracts for the purchase of
certain such obligations. Upon deposit of such Bonds the Trustee delivered
to the Sponsor a certificate evidencing the ownership of _______Units of the
Trust, which are offered for sale by this Prospectus. Each Unit initially
offered represents a 1/______ undivided interest in the Trust. To the extent
that any Units are redeemed by the Trustee, the fractional undivided interest
in the Trust represented by each unredeemed Unit will increase, although the
actual interest in the Trust represented by such fraction will remain
unchanged. Units in the Trust will remain outstanding until redeemed upon
tender to the Trustee by Certificateholders, which may include the Sponsor,
or until the termination of the Indenture.
The Indenture may be amended at any time by consent of Certificateholders
representing at least 51% of the Units of the Trust then outstanding. The
Indenture may also be amended by the Trustee and the Sponsor without the
consent of any of the Certificateholders 1) to cure any ambiguity or to
correct or supplement any provision thereof which may be defective or
inconsistent, or 2) to make such other provisions as shall not adversely
affect the interest of the Certificateholders, provided, however, that the
Indenture may not be amended to increase the number of Units issuable
thereunder or to permit the deposit or acquisition of bonds either in
addition to, or in substitution for any of the Bonds initially deposited in
the Trust except in connection with the limited right of substitution of
Replacement Bonds for failed Bonds (see "Description of Trust Portfolio") and
for the substitution of refunding bonds under certain circumstances. The
Trustee shall advise the Certificateholders of any amendment promptly after
the execution thereof.
The Trust may be terminated at any time by consent of Certificateholders
representing at least 51% of the Units of the Trust then outstanding or by
the Trustee when the value of the Trust, as shown by any semi-annual
evaluation, is less than 20% of the original principal amount of the Trust
and will be liquidated by the Trustee in the event that a sufficient number
of Units not yet sold are tendered for redemption by the Sponsor and the
Underwriters thereby reducing the net worth of the Trust to less than 40% of
the principal amount of the Bonds originally deposited in the portfolio. The
Indenture will terminate upon the redemption, sale or other disposition of
the last Bond held in the Trust, but in no event shall it continue beyond the
end of the calendar year preceding the fiftieth anniversary of its execution.
5
<PAGE>
Written notice of any termination specifying the time or times at which
Certificateholders may surrender their certificates for cancellation shall be
given by the Trustee to each Certificateholder at the address appearing on
the registration books of the Trust maintained by the Trustee. The Trustee
will begin to liquidate any Bonds held in the Trust within a reasonable
period of time from said notification and shall deduct from the proceeds any
accrued costs, expenses or indemnities provided by the Indenture, including
any compensation due the Trustee, any costs of liquidation and any amounts
required for payment of any applicable taxes, governmental charges or final
operating costs of the Trust.
The Trustee shall then distribute to Certificateholders their pro rata
shares of the remaining balances in the Principal and Interest Accounts
together with a final distribution statement which will be in substantially
the same form as the annual distribution statement (see "Other Rights of
Certificateholders"). Any amount held by the Trustee in any reserve account
will be distributed when the Trustee determines the reserve is no longer
necessary in the same manner as the final distribution from the Principal and
Interest Accounts (see "Distribution of Interest and Principal").
The Sponsor and the Trustee shall be under no liability to
Certificateholders for taking any action or for refraining from any action in
good faith pursuant to the indenture, or for errors in judgment, but shall be
liable only for their own negligence, lack of good faith, willful misconduct
or reckless disregard of their duties. The Trustee shall not be liable for
depreciation or loss incurred by reason of the sale by the Trustee of any of
the Bonds. In the event of the failure of the Sponsor to act under the
Indenture, the Trustee may act thereunder and shall not be liable for any
action taken by it in good faith under the Indenture.
The Trustee shall not be liable for any taxes or other governmental
charges imposed upon or in respect of the Bonds or upon the interest thereon
or upon it as Trustee under the Indenture or upon or in respect of the Trust
which the Trustee may be required to pay under any present or future law of
the United States of America or of any other taxing authority having
jurisdiction.
Approximately __% of the aggregate principal amount of the Bonds in the
Trust are "zero coupon" bonds. Zero coupon bonds are purchased at a deep
discount because the buyer receives only the right to receive a final payment
at the maturity of the bond and does not receive any periodic interest
payments. The effect of owning deep discount bonds which do not make current
interest payments (such as the zero coupon bonds) is that a fixed yield is
earned not only on the original investment but also, in effect, on all
discount earned during the life of such 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. See also note (6) to "Notes
to Trust Portfolio."
6
<PAGE>
DESCRIPTION OF TRUST PORTFOLIO
PORTFOLIO. The Trust consists of __ obligations of issuers. ______of the
issues in the Trust are general obligations of the governmental entity
issuing them or are backed by the taxing power thereof representing ____% of
principal amount of bonds in the Trust. The remaining issues are payable
directly or indirectly from the income of a specific project or authority and
are divided by source of revenue (and percentage of principal amount to total
Trust) as follows:
___________________________________________________________. The dollar
weighted average maturity of the Bonds in the Trust is ____ years. None of
the issues in the Trust are subject to the alternative minimum tax.
Approximately ____% of the principal amount of the Bonds in the Trust are
issued by issuers located in the state of New Jersey.
Approximately 21% of the aggregate principal amount of the Bonds consists
of obligations whose revenues are primarily derived from the sale of electric
energy. 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. All of such issuers have been experiencing certain of these
problems in varying degrees. In addition, Federal, state and municipal
governmental authorities may from time to time review existing and impose
additional regulations governing the licensing, construction and operation of
nuclear power plants, which may adversely affect the ability of the issuers
of such Bonds to make payments of principal and/or interest on such Bonds.
Approximately ____%of the aggregate principal amount of Bonds in the
Trust are hospital revenue bonds. In view of this an investment in the Trust
should be made with an understanding of the characteristics of such issuers
and the risks which such an investment may entail. Ratings of bonds issued
for health care facilities are often based on feasibility studies that
contain projections of occupancy levels, revenues and expenses. A facility's
gross receipt 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 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
requires 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 adversely affect the ability of such issuers to make payment of
principal and interest on Bonds held in the portfolio of the Trust. Such
adverse changes also may adversely affect the ratings of the Bonds held in
the portfolio of the Trust.
Approximately ____% of the aggregate principal amount of the Bonds in the
Trust consists of obligations which derive their payment from mortgage loans.
No more than 25% of the Trust's total assets will be invested in mortgages
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originated by the same financial institution. Certain of the Bonds in the
Trust may be single family mortgage revenue bonds issued for the purpose of
acquiring from originating financial institutions notes secured by mortgages
on residences located within the issuer's boundaries and owned by persons of
low or moderate income. In view of this, an investment in the Trust should
be made with an understanding of the characteristics of such issuers and the
risks which such an investment may entail. Mortgage loans are generally
partially or completely prepaid prior to their final maturities as a result
of events such as sale of the mortgaged premises, default, condemnation or
casualty loss. Because these bonds are subject to extraordinary mandatory
redemption in whole or in part from such prepayments on mortgage loans, a
substantial portion of such bonds will probably be redeemed prior to their
scheduled maturities or even prior to their ordinary call dates.
Extraordinary mandatory redemption without premium could also result from the
failure of the originating financial institutions to make mortgage loans in
sufficient amounts within a specified time period. Additionally, unusually
high rates of default on the underlying mortgage loans may reduce revenues
available for the payment of principal of or interest on such mortgage
revenue bonds. These bonds were issued under Section 103A of the Internal
Revenue Code, which Section contains certain requirements relating to the use
of the proceeds of such bonds in order for the interest on such bonds to
retain its tax-exempt status. In each case the issuer of the bonds has
covenanted to comply with applicable requirements and bond counsel to such
issuer has issued an opinion that the interest on the bonds is exempt from
Federal income tax under existing laws and regulations. Certain of the Bonds
in the Trust 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.
Certain issuers of housing bonds have considered various ways to redeem bonds
they have issued prior to the stated first redemption dates for such bonds.
In one situation an issuer, in reliance on its interpretation of certain
language in the indenture under which one of its bond issues was created,
redeemed all of such issue at par in spite of the fact that such indenture
provided that the first optional redemption was to include a premium over par
and could not occur prior to a later date. In connection with the housing
bonds held by the Trust, the Sponsor at the Date of Deposit is not aware that
any of the respective issuers of such Bonds are actively considering the
redemption of such Bonds prior to their respective stated initial call dates.
For a general discussion of the effects of Bond prepayments and redemptions
on Certificateholders who acquired Units at a time when such Bonds were
valued in excess of the principal amount or redemption price of such Bonds,
see "General" below.
REPLACEMENT BONDS. Because certain of the Bonds in the Trust may from
time to time under certain circumstances be sold or redeemed or will mature
in accordance with their terms and because the proceeds from such events will
be distributed to Certificateholders and will not be reinvested, no assurance
can be given that the Trust will retain for any length of time its present
size and composition. Neither the Sponsor nor the Trustee shall be liable in
any way for any default, failure or defect in any Bond. In the event of a
failure to deliver any Bond that has been purchased for the Trust under a
contract, including any Bonds purchased on a "delayed delivery" basis
("Failed Bonds"), the Sponsor is authorized under the Indenture to direct the
Trustee to acquire other bonds ("Replacement Bonds") to make up the original
corpus of the Trust.
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The Replacement Bonds must be purchased within 20 days after delivery of
the notice of the failed contract and the purchase price (exclusive of
accrued interest) may not exceed the amount of funds reserved for the
purchase of the Failed Bonds. The Replacement Bonds (i) must be tax-exempt
bonds issued by the states or their political subdivisions, (ii) must have a
fixed maturity date of at least 10 years, (iii) must be purchased at a price
that results in a yield to maturity and in a current return, in each case as
of the Date of Deposit, at least equal to that of the Failed Bonds, (iv)
shall not be "when, as and if issued" bonds and (v) must be rated "BBB-" or
better by Standard & Poor's, a division of The McGraw-Hill Companies, Inc.
("Standard & Poor's" or "S&P") or "Baa3" or better by Moody's Investors
Service, Inc. ("Moody's"). Whenever a Replacement Bond has been acquired for
the Trust, the Trustee shall, within five days thereafter, notify all
Certificateholders of the Trust of the acquisition of the Replacement Bonds
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 Bond exceeded the cost of the Replacement
Bond plus accrued interest. Once the original corpus of the Trust is
acquired, the Trustee will have no power to vary the investment of the Trust,
i.e., the Trust will have no managerial power to take advantage of market
variations to improve a Certificateholder's investment.
If the right to limited substitution described in the preceding paragraph
shall not be utilized to acquire Replacement Bonds in the event of a failed
contract, the Sponsor will refund the sales charge attributable to such
Failed Bonds to all Certificateholders of the Trust and distribute the
principal and accrued interest (at the coupon rate of such Failed Bonds to
the date the Failed Bonds are removed from the Trust) attributable to such
Failed Bonds not more than 30 days after such removal or such earlier time as
the Trustee in its sole discretion deems to be in the interest of the
Certificateholders. In the event a Replacement Bond should not be acquired
by the Trust, the estimated net annual interest income per Unit for the Trust
would be reduced and the Estimated Current Return and Estimated Long-Term
Return thereon might be lowered. In addition, Certificateholders should be
aware that they may not be able at the time of receipt of such principal to
reinvest such proceeds in other securities at a yield equal to or in excess
of the yield which such proceeds were earning to Certificateholders in the
Trust.
GENERAL. Certain of the Bonds in the Trust are subject to redemption prior
to their stated maturity date pursuant to sinking fund provisions, call
provisions or extraordinary optional or mandatory redemption provisions. A
sinking fund is a reserve fund accumulated over a period of time for
retirement of debt. A callable debt obligation is one which is subject to
redemption or refunding prior to maturity at the option of the issuer. A
refunding is a method by which a debt obligation is redeemed, at or before
maturity, by the proceeds of a new debt obligation. In general, call
provisions are more likely to be exercised when the offering side valuation
is at a premium over par than when it is at a discount from par. The
portfolio contains a listing of the sinking fund and call provisions, if any,
with respect to each of the debt obligations. Extraordinary optional
redemptions and mandatory redemptions result from the happening of certain
events. Generally, events that may permit the extraordinary optional
redemption of Bonds or may require the mandatory redemption of Bonds include,
among others: a final determination that the interest on the Bonds is
taxable; the substantial damage or destruction by fire or other casualty of
the project for which the proceeds of the Bonds were used; an exercise by a
local, state or Federal governmental unit of its power of eminent domain to
take all or substantially all of the project for which the proceeds of the
Bonds were used; changes in the economic availability of raw materials,
operating supplies or facilities or technological or other changes which
render the operation of the project for which the proceeds of the Bonds were
used uneconomic; changes in law or an administrative or judicial decree which
renders the performance of the agreement under which the proceeds of the
Bonds were made available to finance the project impossible or which creates
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unreasonable burdens or which imposes excessive liabilities, such as taxes,
not imposed on the date the Bonds are issued on the issuer of the Bonds or
the user of the proceeds of the Bonds; an administrative or judicial decree
requires the cessation of a substantial part of the operations of the project
financed with the proceeds of the Bonds; an overestimate of the costs of the
project to be financed with the proceeds of the Bonds resulting in excess
proceeds of the Bonds which may be applied to redeem Bonds; or an
underestimate of a source of funds securing the Bonds resulting in excess
funds which may be applied to redeem Bonds. See "Trust Portfolio" and
footnote (3) in "Notes to Trust Portfolio." See also "Portfolio" above for
possible redemptions prior to initial stated call dates. Certain of the
Bonds in the Trust may have been purchased by the Trust at premiums over the
par value (principal amount) of such Bonds (see "Trust Portfolio"). To the
extent Certificateholders acquire their Units at a time Bonds are valued at a
premium over such par value and such Bonds are subsequently redeemed or
prepaid at par or for less than such valuations, Certificateholders will
likely sustain losses in connection with such redemptions or prepayments.
For the tax effects of Bond redemptions generally, see "Tax Status (Federal,
State, Capital Gains)."
To the best knowledge of the Sponsor there is no litigation pending as of
the Date of Deposit in respect of any Bonds which might reasonably be
expected to have a material adverse effect upon the Trust. At any time after
the Date of Deposit, litigation may be initiated on a variety of grounds with
respect to Bonds in the Trust. Such litigation, as, for example, suits
challenging the issuance of pollution control revenue bonds under
environmental protection statutes, may affect the validity of such Bonds or
the tax-free nature of the interest thereon. While the outcome of litigation
of such nature can never be entirely predicted, the Trust has received
opinions of bond counsel to the issuing authorities of each Bond on the date
of issuance to the effect that such Bonds have been validly issued and that
the interest thereon is exempt from Federal income tax. In addition, other
factors may arise from time to time which potentially may impair the ability
of issuers to meet obligations undertaken with respect to the Bonds.
OBJECTIVES OF THE TRUST
The Trust has been formed to provide Certificateholders interest income
which is exempt from Federal income taxes. In addition, the Trust also has
objectives which include conservation of capital and liquidity of investment.
There is no assurance that the Trust's objectives will be met.
In selecting Bonds for the Trust, the following facts, among others, were
considered by the Sponsor: (a) either the Standard & Poor's rating of the
Bonds was in no case less than "BBB-" or the Moody's Investors Service, Inc.
rating of the Bonds was in no case less than "Baa3" including provisional or
conditional ratings, respectively, or, if not rated, the Bonds had, in the
opinion of the Sponsor, credit characteristics sufficiently similar to the
credit characteristics of interest-bearing tax-exempt obligations that were
so rated as to be acceptable for acquisition by the Trust (see "Description
of Bond Ratings") and (b) the prices of the Bonds relative to other bonds of
comparable quality and maturity. Medium-quality Bonds (rated BBB or A by S&P
or Baa or A by Moody's) are obligations of issuers that are considered to
possess adequate, but not outstanding, capacities to service the obligations.
Investment in medium-quality debt securities involves greater investment
risk, including the possibility of issuer default or bankruptcy, than
investment in higher-quality debt securities. An economic downturn could
severely disrupt this market and adversely affect the value of outstanding
bonds and the ability of the issuers to repay principal and interest. During
a period of adverse economic changes, including a period of rising interest
rates, issuers of such bonds may experience difficulty in servicing their
principal and interest payment obligations. Medium quality debt securities
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tend to be less marketable than higher-quality debt securities because the
market for them is less broad. During periods of thin trading in these
markets, the spread between bid and asked prices is likely to increase
significantly, and the Trust may have greater difficulty selling the medium-
quality debt securities in its portfolio. Subsequent to the Date of Deposit,
a Bond may cease to be rated or its rating may be reduced below the minimum
required as of the Date of Deposit. Neither event requires elimination of
such Bond from a portfolio but may be considered in the Sponsor's
determination as to whether or not to direct the Trustee to dispose of the
Bond (see "Trustee Information").
The Trust consists of a portfolio of fixed rate, long-term debt
obligations. An investment in the Trust should be made with an understanding
of the risks associated with an investment in such obligations. Fluctuations
in interest rates may cause corresponding fluctuations in the value of the
Bonds in the portfolio. The Sponsor cannot predict whether the value of the
Bonds in the portfolio will increase or decrease.
ESTIMATED CURRENT RETURN AND ESTIMATED LONG-TERM RETURN
As of the business day prior to the Date of Deposit, the Estimated
Current Return and the Estimated Long-Term Return were as set forth in
"Summary of Essential Financial Information." Estimated Current Return is
calculated by dividing the estimated net annual interest income per Unit by
the Public Offering Price. The estimated net annual interest income per Unit
will vary with changes in fees and expenses of the Trustee and the Evaluator
and with the principal prepayment, redemption, maturity, exchange or sale of
Securities while the Public Offering Price will vary with changes in the
offering price of the underlying Securities; therefore, there is no assurance
that the present Estimated Current Return will be realized in the future.
Estimated Long-Term Return is calculated using a formula which (1) takes into
consideration, and determines and factors in the relative weightings of, the
market values, yields (which takes into account the amortization of premiums
and the accretion of discounts) and estimated retirements of all of the
Securities in the Trust and (2) takes into account a compounding factor and
the expenses and sales charge associated with the Trust Unit. Since the
market values and estimated retirements of the Securities and the expenses of
the Trust will change, there is no assurance that the present Estimated Long-
Term 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 the Estimated Current Return calculation includes
only net annual interest income and Public Offering Price. Neither rate
reflects the true return to Certificateholders which is lower because neither
includes the effect of the delay in the first payment to Certificateholders.
In order to acquire certain of the Bonds contracted for by the Sponsor
for deposit in the Trust, it may be necessary for the Sponsor or Trustee to
pay on the settlement dates for delivery of such Bonds amounts covering
accrued interest on such Bonds which exceed (1) the amounts paid by
Certificateholders and (2) the amounts which will be made available through
cash furnished by the Sponsor on the Date of Deposit, which amount of cash
may exceed the interest which would accrue to the First Settlement Date. The
Trustee has agreed to pay any amounts necessary to cover any such excess and
will be reimbursed therefor, without interest, when funds become available
from interest payments on the particular Bonds with respect to which such
payments may have been made.
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PUBLIC OFFERING INFORMATION
Units in the Trust are offered at the Public Offering Price which during
the initial public offering period is based on the offering prices of the
Bonds in the Trust plus a sales charge of 2.00% of the Public Offering Price
(equivalent to 2.041% of the aggregate offering price of the Bonds in the
portfolio) and which in the secondary market is based on the bid prices of
the Bonds in the portfolio and includes a sales charge of 2.00% of the Public
Offering Price (equivalent to 2.041% of the aggregate bid price of the Bonds
in the portfolio) plus accrued and undistributed interest to the settlement
date. The initial public offering period shall terminate upon the sale to
the public of all the Units in the Trust. Upon termination of the initial
offering period, any unsold Units and any Units repurchased in the secondary
market may be offered by this Prospectus at the secondary Public Offering
Price in the manner described herein. Although payment is normally made
three business days following the order for purchase, payment may be made
prior thereto. A person will become the owner of Units on the date of
settlement provided payment has been received. Cash, if any, made available
to the Sponsor prior to the date of settlement for the purchase of Units may
be used in the Sponsor's business and may be deemed to be a benefit to the
Sponsor, subject to the limitations of the Securities Exchange Act of 1934.
During the initial offering period, Units will be distributed to the
public through the Sponsor and through certain dealers. Dealers will be
allowed a concession during the initial offering period equal to 1.00% of the
Public Offering Price.
Certain commercial banks are making Units of the Trust 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 an amount allowing a
concession equal to that shown above for dealers. Under the Glass-Steagall
Act, banks are prohibited from underwriting Trust Units; however, the Glass-
Steagall Act does permit certain agency transactions and the banking
regulators have indicated that these particular agency transactions are
permitted under such Act.
To facilitate the handling of transactions during the initial public
offering period, sales of Units shall normally be limited to transactions
involving a minimum of five Units. Further purchases may be made in
multiples of one Unit.
The Sponsor reserves the right to reject, in whole or in part, any order
for the purchase of Units and to change the amount of the concession to
dealers, set forth below, from time to time.
ACCRUED INTEREST
Accrued interest which is the accumulation of unpaid interest on a bond
from the last day on which interest thereon was paid. Interest on Bonds in
the Trust is paid to the Trustee either monthly or semi-annually. However,
interest on the Bonds in the Trust is accounted for daily on an accrual
basis. Because of this, the Trust always has an amount of interest earned
but not yet collected by the Trustee because of coupons that are not yet due.
For this reason, 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 and undistributed interest to the date of
settlement. Certificateholders will receive on the next distribution date of
the Trust the amount, if any, of accrued interest paid on their Units.
In an effort to reduce the amount of accrued interest which would
otherwise have to be paid in addition to the Public Offering Price in the
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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 Certificateholder of record on such date. Consequently,
the amount of accrued interest to be added to the Public Offering Price of
Units will include only accrued interest arising after the First Settlement
Date of the Trust, less any distributions from the Interest Account
subsequent to this First Settlement Date. Since the First Settlement Date is
the date of settlement for anyone ordering Units on the Date of Deposit, no
accrued interest will be added to the Public Offering Price of Units ordered
on the Date of Deposit.
Because of the varying interest payment dates of the Bonds, accrued
interest at any point in time will be greater than the amount of interest
actually received by the Trust and distributed to Certificateholders.
Therefore, there will always remain an item of accrued interest that is added
to the value of the Units. If a Certificateholder 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 use of the funds held in the Interest Account for distributions to
Certificateholders and since such Account is non-interest-bearing to
Certificateholders, the Trustee benefits thereby.
REDEMPTION AND REPURCHASE OF UNITS
Certificateholders may redeem all or a portion of their Units by tender
to the Trustee, at its Unit Investment Trust Division, 101 Barclay Street,
New York, New York 10286, of the certificates representing Units to be
redeemed, duly endorsed or accompanied by proper instruments of transfer with
signature guaranteed. In order to effect a redemption of Units,
Certificateholders must tender their certificates to the Trustee or provide
satisfactory indemnity required in connection with lost, stolen or destroyed
certificates. No redemption fee will be charged. On the third business day
following such tender, the Certificateholder will be entitled to receive in
cash for each Unit tendered an amount equal to the redemption price per Unit
as next computed after receipt by the Trustee of such tender of Units as
determined by the bid price of the Bonds in the Trust on the date of tender
(the "Redemption Price") plus accrued interest to, but not including, the
date of redemption. The price received upon redemption may be more or less
than the amount paid by the Certificateholder depending on the value of the
Bonds on the date of tender. The value of the Bonds will fluctuate with
market and credit conditions, including any changes in interest rate levels.
Accrued interest paid on redemption shall be withdrawn from the Interest
Account, or if the balance therein is insufficient, from the Principal
Account. All other amounts paid on redemption shall be withdrawn from the
Principal Account. In addition, the Trustee is empowered, with certain
recommendations allowed by the Sponsor, to sell Bonds in the portfolio of the
Trust to make funds available for redemption. Units redeemed shall be
cancelled and not be available for reissuance.
The recognized date of tender is deemed to be the date on which Units are
received in proper form by the Trustee prior to 3:15 p.m. Central time.
Units received by the Trustee after 3:15 p.m. will be deemed to have their
recognized date of tender on the next business day on which the New York
Stock Exchange is open for trading and such Units will be deemed to have been
tendered to the Trustee on such day for redemption at the Redemption Price
computed on that date (see "Evaluation of the Trust").
To the extent that Bonds in the portfolio of the Trust are sold to meet
redemptions, the size and diversity of the Trust will be reduced. Such sales
may occur at a time when Bonds might not otherwise be sold which may result
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in lower prices received on the Bonds than might be realized under normal
trading conditions.
Under regulations issued by the Internal Revenue Service, the Trustee
will be required to withhold a specified percentage of the principal amount
of a Unit redemption if the Trustee has not been furnished the redeeming
Certificateholder'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 Certificateholder only when filing his or
her tax return. Under normal circumstances the Trustee obtains the
Certificateholder's tax identification number from the selling broker at the
time the certificate is issued, and this number is printed on the certificate
and on distribution statements. If a Certificateholder's tax identification
number does not appear on the certificate or statements, or if it is
incorrect, the Certificateholder should contact the Trustee before presenting
a certificate for redemption to determine what action, if any, is required to
avoid this back-up withholding.
The right of redemption may be suspended and payment postponed for any
period during which the New York Stock Exchange is closed, other than for
customary weekend and holiday closings, or during which the Securities and
Exchange Commission determines that trading on that Exchange is restricted or
an emergency exists, as a result of which disposal or evaluation of the Bonds
is not reasonably practicable, or for such other periods as the Securities
and Exchange Commission may by order permit.
The Trustee shall notify the Sponsor of any tender of Units for
redemption. If the Sponsor's repurchase price in the secondary market at
that time equals or exceeds the redemption price, it may repurchase such
Units by notifying the Trustee before the close of business on the second
succeeding business day and by making payment therefor to the tendering
Certificateholder not later than the day on which payment would otherwise
have been made by the Trustee. The secondary market Public Offering Price of
any Units thus acquired by the Sponsor will be in accord with the procedure
described in the then currently effective prospectus relating to such Units.
Units held by the Sponsor may be tendered to the Trustee for redemption. Any
profit or loss resulting from the resale or redemption of such Units will
belong to the Sponsor.
DISTRIBUTION OF INTEREST AND PRINCIPAL
Interest received by the Trust, including that part of the proceeds from
the disposition of Bonds, if any, which represents accrued interest, is
credited by the Trustee to the Interest Account. Any other receipts are
credited to the Principal Account. Interest received by the Trust will be
distributed on or shortly after the first day of each month on a pro rata
basis to Certificateholders of record as of the preceding record date (which
is the fifteenth day of the month next preceding the distribution). All
distributions will be net of applicable expenses. The pro rata share of cash
in the Principal Account will be computed on the fifteenth day of each month
and will be distributed to the Certificateholders as of the first day of the
next succeeding month. Such principal distribution may be combined with any
interest distribution due to the Certificateholder at that time. Proceeds
received from the disposition of any of the Bonds in the portfolio of the
Trust after each record date and prior to the following distribution date
will be held in the Principal Account and not distributed until the next
distribution date. The Trustee is not required to pay interest on funds held
in the Principal or Interest Accounts (but may itself earn interest thereon
and therefore benefit from the use of such funds) nor to make a distribution
from the Principal Account unless the amount available for distribution shall
equal at least $1.00 per Unit.
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The distribution to the Certificateholders as of each record date after
the First Settlement Date will be made on the following distribution date or
shortly thereafter and shall consist of an amount substantially equal to the
Certificateholder's pro rata share of the estimated annual income after
deducting estimated expenses. Because interest payments are not received by
the Trust at a constant rate throughout the year, such interest distribution
may be more or less than the amount credited to the Interest Account as of
the record date. For the purpose of minimizing fluctuations in the
distributions from the Interest Account, the Trustee is authorized to advance
such amounts as may be necessary to provide interest distributions of
approximately equal amounts. The Trustee shall be reimbursed, without
interest, for any such advances from funds in the Interest Account on the
ensuing record date. A person who purchases Units will commence receiving
distributions only after such person becomes a record owner. Notification to
the Trustee of the transfer of Units is the responsibility of the purchaser,
but in the normal course of business such notice is provided by the selling
broker/dealer.
As of the fifteenth day of each month, the Trustee will deduct from the
Interest Account and, to the extent funds are not sufficient therein, from
the Principal Account, amounts necessary to pay the expenses of the Trust
(see "Expenses of the Trust"). The Trustee may also withdraw from said
accounts an amount, if deemed necessary, to fund a reserve for any
governmental charges or anticipated Trust expenses which may be payable out
of the Trust. Amounts so withdrawn will not be considered a part of the
Trust's assets until such time as the Trustee shall return all or part of the
amount withdrawn to the appropriate accounts. In addition, the Trustee may
withdraw from the Interest and Principal Accounts such amounts as may be
necessary to cover purchases of Replacement Bonds and redemptions of Units by
the Trustee (see "Description of Trust Portfolio" and "Redemption and
Repurchase of Units").
Funds which are available for future distributions, redemptions and
payment of expenses are held in accounts which are non-interest bearing to
Certificateholders and are available for use by the Trustee pursuant to
normal banking procedures.
TAX STATUS (FEDERAL, STATE, CAPITAL GAINS)
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. In addition, where applicable, bond counsel to the issuing
authorities rendered opinions as to the exemption of interest on such Bonds,
when held by residents of the state in which the issuers of such Bonds are
located, from state income taxes and certain state or local intangibles and
local income taxes. Neither the Sponsor nor its counsel have made any
special review for the Trust of the proceedings relating to the issuance of
the Bonds or of the basis for the opinions rendered in connection therewith.
If the interest on a Bond should be determined to be taxable, the Bond would
generally have to be sold at a substantial discount. In addition, investors
could be required to pay income tax on interest received prior to the date on
which interest is determined to be taxable. Gain realized on the sale or
redemption of the Bonds by the Trustee or of a Unit by a Certificateholder
is, income for state tax purposes. (It should be noted in this connection
that such gain does not include any amounts received in respect of accrued
interest or accrued original issue discount, if any.) If a Bond is acquired
with accrued interest, that portion of the price paid for the accrued
interest is added to the tax basis of the Bond. If a Bond is purchased for a
premium, the amount of the premium is added to the tax basis of the Bond.
Bond premium is amortized over the remaining term of the Bond, and the tax
basis of the Bond is reduced each tax year by the amount of the premium
amortized in that tax year.
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For purposes of the following opinions, it is assumed that each asset of
the Trust is debt the interest on which is excluded for federal income tax
purposes. In the opinion of Chapman and Cutler, Counsel to the Sponsor,
under existing law:
1) The Trust is not an association taxable as a corporation for federal
income tax purposes and interest and accrued original issue discount on
Bonds which are excluded from gross income under the Internal Revenue
Code of 1986 (the "Code") will retain its status when distributed to the
Certificateholder; however, such interest may be taken into account in
computing the alternative minimum tax, an additional tax on branches of
foreign corporations and the environmental tax (the "Superfund Tax").
2) Each Certificateholder is considered to be the owner of a pro rata
portion of each asset of the Trust under subpart E, subchapter J of
Chapter 1 of the Code and will have a taxable event when the Trust
disposes of a Bond or when the Certificateholder redeems or sells Units.
If the Certificateholder disposes of a Unit, he is deemed thereby to
dispose of his entire pro rata interest in all assets of the Trust
involved including his pro rata portion of all the Bonds represented by a
Unit. Legislative proposals have been made that would treat certain
transactions designed to reduce or eliminate risk of loss and
opportunities for gain as constructive sales for purpose of recognition
of gain (but not loss). Certificateholders should consult their own tax
advisors with regard to any such constructive sale rules.
Certificateholders must reduce the tax basis of their Units for their
share of accrued interest received by a Trust, if any, on Bonds delivered
after the date the Certificateholders pay for their Units to the extent
that such interest accrued on such Bonds before the date the Trust
acquired ownership of the Bonds (and the amount of this reduction may
exceed the amount of accrued interest paid to the seller) and,
consequently, such Certificateholder 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
Certificateholder, subject to various nonrecognition provisions of the
Code. The amount of any such gain or loss is measured by comparing the
Certificateholder's pro rata share of the total proceeds from such
disposition with the Certificateholder's basis for his or her fractional
interest in the asset disposed of. In the case of a Certificateholder
who purchases Units, such basis (before adjustment for earned original
issue discount and amortized bond premium, if any) is determined by
apportioning the cost of the Units among each of the Trust assets ratably
according to value as of the valuation date nearest the date of
acquisition of the Units. It should be noted that certain legislative
proposals have been made which could affect the calculation of basis for
Certificateholders holding securities that are substantially identical to
the Bonds. Certificateholders should consult their own tax advisors with
regard to the calculation of basis. The tax cost reduction requirements
of said Code relating to amortization of bond premium may, under some
circumstances, result in the Certificateholder realizing a taxable gain
when his Units are sold or redeemed for an amount equal to or less than
his original cost. A Certificateholder will realize a taxable gain when
his Units are sold or redeemed for an amount greater than his adjusted
basis in his Units at the time of such sale or redemption.
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 on its issue price (its
"adjusted issue price") to prior owners. If a Bond is acquired with accrued
interest, that portion of the purchase price paid for the accrued interest is
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added to the tax basis of the Bond. When this accrued interest is received,
it is treated as a return of capital and reduces the tax basis of the Bond.
If a Bond is purchased for a premium, the amount of the premium is added to
the tax basis of the Bond. Bond premium is amortized over the remaining term
of the Bond, and the tax basis of the Bond is reduced each year by the amount
of the premium amortized in that tax year. The application of these rules
will also vary depending on the value of the Bond on the date a
Certificateholder acquires his Units and the price the Certificateholder pays
for his Units. Investors with questions regarding these Code sections should
consult with their tax advisers.
"The Revenue Reconciliation Act of 1993" (the "Tax Act") subjects tax-
exempt bonds to the market discount rules of the Code effective for bonds
purchased after April 30, 1993. In general, market discount is the amount
(if any) by which the stated redemption price at maturity exceeds an
Investor's purchase price (except to the extent that such difference, if any,
is attributable to original issue discount not yet accrued) subject to a
statutory de minimis rule. Market discount can arise based on the price the
Trust pays for Bonds or the price a Certificateholder 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 the Trust holds a Bond would be
recognized as ordinary income by the Certificateholders when principal
payments are received on the Bond, upon sale or at redemption (including
early redemption) or upon the sale or redemption of the Units, unless a
Certificateholder elects to include market discount in taxable income as it
accrues. The market discount rules are complex and Certificateholders should
consult their tax advisers regarding these rules and their application.
Interest on certain "specified private activity bonds" held by the Trust
will be treated as an item of tax preference for purposes of computing the
alternative minimum tax of all Certificateholders of the Trust, including
individuals. As a result, such interest income may be subject to the
alternative minimum tax. The Trust will annually supply Certificateholders
with information regarding the amount of Trust income attributable to those
"specified private activity bonds" held by the Trust that give rise to a
specific item of tax preference. Certificateholders should consult their tax
adviser regarding the potential application of the alternative minimum tax
and the impact of a portion of the Trust's income being characterized as a
tax preference.
For purposes of computing the alternative minimum tax for individuals and
corporations and the Superfund Tax for corporations, interest on certain
private activity bonds (which includes most industrial and housing revenue
bonds) issued on or after August 8, 1986 such as the AMT Bonds, is included
as an item of tax preference.
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, 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 the Bonds in the
Trust. Under current Code provisions, the Superfund Tax does not apply to
tax years beginning on or after January 1, 1996. Legislative proposals have
been introduced that would extend the Superfund Tax. 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.
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Corporate Certificateholders are urged to consult their tax advisers with
respect to the particular tax consequences to them, including the corporate
alternative minimum tax, Superfund Tax and the branch profits tax imposed by
Section 884 of the Code.
Section 265 of the Code provides that interest on indebtedness incurred
or continued to purchase or carry Units of a Trust 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. 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.
Legislative proposals have been made that would extend the financial
institution rules to most corporations. Investors with questions regarding
these issues should consult with their tax advisers.
In general, Section 86 of the Code provides that 50% of Social Security
benefits are includable in gross income to the extent that the sum of
"modified adjusted gross income" plus 50% of the Social Security benefits
received exceeds the "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 includable in
gross income, they will be treated as any other item of gross income.
In addition, under the Tax Act, for taxable years beginning after
December 31, 1993, up to 85% of Social Security benefits are includable in
gross income to the extent that the sum of modified adjusted gross income
plus 50% of Social Security benefits received exceeds an "adjusted base
amount." The adjusted base amount is $34,000 for unmarried taxpayers,
$44,000 for married taxpayers filing a joint return, and zero for married
taxpayers who do not live apart at all times during the taxable year and who
file separate returns.
Although tax-exempt interest is included in modified adjusted gross
income solely for the purpose of determining that portion, if any, of Social
Security benefits that will be included in gross income, no tax-exempt
interest, including that received from the Trust, will be subject to tax. A
taxpayer whose adjusted gross income already exceeds the base amount or the
adjusted base amount must include 50% or 85%, respectively, of his Social
Security benefits in gross income whether or not he receives any tax-exempt
interest. A taxpayer whose modified adjusted gross income (after inclusion
of tax-exempt interest) does not exceed the base amount need not include any
Social Security benefits in gross income.
In the case of corporations, the alternative tax rate applicable to long-
term capital gain 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 (which are defined as net long-term
capital gain over net short-term capital loss for a taxable year) are subject
to a maximum rate of 28 percent. However, it should be noted that
legislative proposals are made 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.
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Under the Code, taxpayers must disclose to the Internal Revenue Service
the amount of tax-exempt interest earned during the year.
In the case of certain of the Bonds in the Trust, the opinions of bond
counsel indicate that interest on such securities received by a "substantial
user" of the facilities being financed with the proceeds of these securities,
or persons related thereto, for periods while such Bonds are held by such a
user or related person, will not be excludable from Federal gross income,
although interest on such Bonds received by others would be excludable from
Federal gross income. "Substantial user" and "related person" are defined
under U.S. Treasury Regulations. Any person who believes that he or she may
be a "substantial user" or a "related person" as so defined should contact
his or her tax adviser.
Ownership of the Units may result in collateral federal income tax
consequences to certain taxpayers, including, without limitation,
corporations subject to either the Superfund 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 such collateral
consequences.
Chapman and Cutler has expressed no opinion with respect to taxation
under any other provision of federal, state or local law. Ownership of the
Units may result in collateral state tax consequences to certain taxpayers.
Prospective investors should consult their tax advisors as to the
applicability of any such collateral consequences.
All statements of law in the Prospectus concerning exemption from
Federal, state or other taxes are the opinion of counsel and are to be so
construed.
EXPENSES OF THE TRUST
For regularly evaluating the portfolio of the Trust, the Evaluator (which
is the Sponsor) will receive that minimum annual fee set forth under "Summary
of Essential Financial Information" which fee is based on the largest
aggregate amount of Bonds in the Trust at any time during such period. For
providing portfolio surveillance services for the Trust, the Sponsor will
receive that minimum annual fee set forth under "Summary of Essential
Financial Information" which fee is based on the largest aggregate amount of
Bonds in the Trust at any time during such period. These fees may exceed the
actual costs of providing such services for this Trust, but at no time will
the total amount received for such services rendered to unit investment
trusts of which Ranson & Associates, Inc. is the Sponsor in any calendar year
exceed the aggregate cost to the Sponsor of supplying such services in such
year.
The Trustee will receive for ordinary services an annual fee from the
Trust set forth under "Summary of Essential Financial Information" which fee
is based on the largest aggregate amount of Bonds in the Trust at any time
during such period. Both the Trustee's fee and the evaluation fee paid to
the Sponsor may be adjusted without prior approval from Certificateholders,
provided that all adjustments upward will not exceed the cumulative
percentage increase of the United States Department of Labor's Consumer Price
Index or, if such index is no longer published, in a comparable index. 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
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of advancing funds to the Trust to meet scheduled distributions). Since the
Trustee has the use of the funds being held in the Principal and Interest
Accounts for future distributions, payment of expenses and redemptions and
since such Accounts are non-interest bearing to Certificateholders, the
Trustee benefits thereby. Part of the Trustee's compensation for its
services to the Trust is expected to result from the use of these funds. For
a discussion of the services rendered by the Trustee pursuant to its
obligations under the Indenture, see "Trustee Information" and "Other Rights
of Certificateholders."
Expenses incurred in establishing the Trust, including the cost of the
initial preparation of documents relating to the Trust (including the
Prospectus, Trust Agreement and certificates), federal and state registration
fees, the initial fees and expenses of the Trustee, legal and accounting
expenses, payment of closing fees and any other out-of-pocket expenses, will
be paid by such Trust (out of the Income Account) and it is intended that
such expenses be amortized of a five-year period. The following is a summary
of expenses of the Trust which, when owed to the Trustee, are secured by a
lien on the assets of the Trust: 1) the expenses and costs of any action
undertaken by the Trustee to protect the Trust and the rights and interests
of the Certificateholders; 2) any taxes and other governmental charges upon
the Bonds or any part of the Trust (no such taxes or charges are currently
being levied, or, to the knowledge of the Sponsor, contemplated); 3) amounts
payable to the Trustee as fees for ordinary recurring services and for
extraordinary non-recurring services rendered pursuant to the Indenture and
all disbursements and expenses including counsel fees (including fees of
counsel which the Trustee may retain) and auditing fees sustained or incurred
by the Trustee in connection therewith; and 4) any losses or liabilities
accruing to the Trustee without negligence, bad faith or willful misconduct
on its part. The Trustee is empowered to sell Bonds in order to pay these
amounts if funds are not available in the Interest and Principal Accounts.
Costs of disbursement (including postage, checks and handling) of interest,
principal and redemption distributions will be paid by the Trustee and will
not be charged to the Trust.
EVALUATION OF THE TRUST
As of the opening of business on the Date of Deposit, the price of the
Units was determined on the basis of an initial evaluation of the Bonds in
the Trust prepared by Stern Brothers & Co., a firm regularly engaged in the
business of evaluating, quoting or appraising comparable securities. After
the opening of business on the Date of Deposit and during the period of
initial public offering, the Evaluator, Ranson & Associates, Inc., will
appraise or cause to be appraised, as of the last day of each month and when
requested by the Trustee, the value of the underlying Bonds as of 3:15 P.M.
Central time and will adjust the Public Offering Price of the Units
commensurate with such appraisal. Such Public Offering Price will be
effective for all orders received at or prior to 3:15 P.M. Central time on
each such day. Orders received by the Trustee or Sponsor for purchases,
sales or redemptions after that time, or on a day when the New York Stock
Exchange is closed, will be held until the next determination of price.
While the Trustee has the power to determine the Redemption Price per Unit
when Units are tendered for redemption, such authority has been delegated to
the Evaluator which determines the Redemption Price per Unit on a daily basis
on days the New York Stock Exchange is open (and on any other days on which
Sponsor secondary market transactions or redemptions occur). Each evaluation
of the Trust has been and will be determined on the basis of cash on hand in
the Trust or money in the process of being collected, the value of the Bonds
in the portfolio of the Trust based on the bid prices of the Bonds and
interest accrued thereon not subject to collection less any taxes or
governmental charges payable, any accrued expenses of the Trust and any cash
held for distribution to Certificateholders. The result of that computation
is then divided by the number of Units outstanding as of the date thereof to
determine the per Unit value of the Trust.
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The Evaluator may determine the value of the Bonds in the portfolio of
the Trust (1) on the basis of current bid prices of the Bonds obtained from
dealers or brokers who customarily deal in bonds comparable to those held in
the Trust; (2) if bid prices are not available for any of the Bonds, on the
basis of bid prices for comparable bonds; (3) by causing the value of the
Bonds to be determined by others engaged in the practice of evaluating,
quoting or appraising comparable bonds; or (4) by any combination of the
above. Although the Unit value is based on the bid prices of the Bonds, the
Units are sold initially to the public at the Public Offering Price based on
the offering prices of the Bonds.
The initial or primary Public Offering Price of the Units and the
Sponsor's initial repurchase price per Unit are based on the offering price
per Unit of the underlying Bonds plus the applicable sales charge and
interest accrued but undistributed. The secondary market Public Offering
Price and the Redemption Price per Unit are based on the bid price per Unit
of the Bonds in the portfolio of the Trust plus the applicable sales charge
and accrued interest. The offering price of Bonds in the portfolio of the
Trust may be expected to range from 1%-2% more than the bid price of such
Bonds. On the Date of Deposit, the offering side evaluation of the Bonds in
the portfolio of the Trust was higher than the bid side evaluation of such
Bonds by 1.2% of the aggregate principal amount of such Bonds.
OTHER RIGHTS OF CERTIFICATEHOLDERS
The Trustee shall furnish Certificateholders in connection with each
distribution a statement of the amount of interest and, if any, the amount of
other receipts (received since the preceding distribution) being distributed,
expressed in each case as a dollar amount representing the pro rata share of
each Unit outstanding. Within a reasonable period of time after the end of
each calendar year, the Trustee shall furnish to each person who at any time
during the calendar year was a registered Certificateholder a statement 1) as
to the Interest Account: interest received (including amounts representing
interest received upon any disposition of Bonds), deductions for fees and
expenses of the Trust, for purchases of Replacement Bonds and for redemptions
of Units, if any, and the balance remaining after such distributions and
deductions, expressed in each case both as a total dollar amount and as a
dollar amount representing the pro rata share of each Unit outstanding on the
last business day of such calendar year; 2) as to the Principal Account: the
dates of disposition of any Bonds and the net proceeds received therefrom
(excluding any portion representing accrued interest), the amount paid for
purchases of Replacement Bonds and for redemptions of Units, if any,
deductions for payment of applicable taxes and fees and expenses of the
Trustee, and the balance remaining after such distributions and deductions
expressed both as a total dollar amount and as a dollar amount representing
the pro rata share of each Unit outstanding on the last business day of such
calendar year; 3) a list of the Bonds held and the number of Units
outstanding on the last business day of such calendar year; 4) the Redemption
Price based upon the last computation thereof made during such calendar year;
and 5) amounts actually distributed during such calendar year from the
Interest Account and from the Principal Account, separately stated, expressed
both as total dollar amounts and as dollar amounts representing the pro rata
share of each Unit outstanding.
The Indenture requires the Trust to be audited on an annual basis at the
expense of the Trust by independent auditors selected by the Sponsor. The
Trustee shall not be required, however, to cause such an audit to be
performed if its cost to the Trust shall exceed $.50 per Unit on an annual
basis. Certificateholders may obtain a copy of such audited financial
statements upon request.
In order to comply with Federal and state tax reporting requirements,
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Certificateholders will be furnished, upon request to the Trustee,
evaluations of the Bonds in the Trust furnished to it by the Evaluator.
The Trustee is authorized to treat as the record owner of Units that
person who is registered as such owner on the books of the Trustee.
Ownership of Units of the Trust is evidenced by separate registered
certificates executed by the Trustee and the Sponsor. Certificates are
transferable by presentation and surrender to the Trustee properly endorsed
or accompanied by a written instrument or instruments of transfer. A
Certificateholder must sign exactly as his name appears on the face of the
certificate with the signature guaranteed by a participant in the Securities
Transfer Agents Medallion Program ("STAMP") or such other signature guarantee
program in addition to, or in substitution for, STAMP, as may be accepted by
the Trustee. In certain instances the Trustee may require additional
documents such as, but not limited to, trust instruments, certificates of
death, appointments as executor or administrator or certificates of corporate
authority. Certificates will be issued in denominations of one Unit or any
multiple thereof. Destroyed, stolen, mutilated or lost certificates will be
replaced upon delivery to the Trustee of satisfactory indemnity, evidence of
ownership and payment of expenses incurred. Mutilated certificates must be
surrendered to the Trustee for replacement. Although no such charge is now
made or contemplated, the Trustee may require a Certificateholder to pay a
reasonable fee to be determined by the Trustee for each certificate reissued
or transferred and to pay any governmental charge that may be imposed in
connection with each such transfer or interchange.
SPONSOR INFORMATION
Ranson & Associates, Inc., an investment banking firm created in 1995 by
a number of former owners and employees of Ranson Capital Corporation, is the
sponsor and successor sponsor of Series 1 - 83 of The Kansas Tax-Exempt Trust
and Multi-State Series 1 - 7 of The Ranson Municipal Trust and is the Sponsor
of the Trust. Ranson & Associates, Inc. is the successor to a series of
companies, the first of which was originally organized in Kansas in 1935.
During its history, Ranson & Associates, Inc. and its predecessors have been
active in public and corporate finance and has sold bonds and unit investment
trusts and maintained secondary market activities relating thereto. On
November 26, 1996, Ranson & Associates, Inc. purchased all existing unit
investment trusts sponsored by EVEREN Securities, Inc. Accordingly, Ranson &
Associates is the successor sponsor to unit investment trusts formerly
sponsored by EVEREN Unit Investment Trusts, a service of EVEREN Securities,
Inc. At present, Ranson & Associates, Inc., which is a member of the
National Association of Securities Dealers, Inc., is the Sponsor to each of
the above-named unit investment trusts and serves as the financial advisor
and as an underwriter for issuers of municipal securities in Kansas.
The Company's offices are currently located at 250 North Rock Road, Suite
150, Wichita, Kansas 67206. As of January 31, 1997, the stockholder's equity
of Ranson & Associates, Inc. was $625,706. (This paragraph relates only to
the Sponsor and not to any Series of The Kansas Tax-Exempt Trust or to any
other dealer. The information is included herein only for the purpose of
informing investors as to the financial responsibility of the Sponsor and its
ability to carry out its contractual obligations. More detailed financial
information will be made available by the Sponsor upon request.)
Dealers will purchase the Units from the Sponsor on the Date of Deposit
at a price equal to the Public Offering Price per Unit less that percentage
indicated under "Public Offering Information." Any reduced sales charge for
quantity purchases as described under "Public Offering Information" will be
the responsibility of the dealer. In addition to that portion of the sales
commission retained by the Sponsor, the Sponsor will realize a profit or
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sustain a loss, as the case may be, as a result of the difference between the
price paid for the Bonds by the Sponsor and the cost of such Bonds to the
Trust (which is based on the aggregate offering price of the Bonds in the
portfolio of the Trust on the Date of Deposit as determined by Stern Brothers
& Co.). See "Trust Portfolio." The Sponsor may also realize profits or
sustain losses with respect to Bonds deposited in the Trust which were
acquired by the Sponsor from underwriting syndicates of which it was a
member. The Sponsor has not participated as sole underwriter or as manager
or as a member of the underwriting syndicate from which any of the aggregate
principal amount of the Bonds in the portfolio of the Trust were acquired.
The Sponsor may realize additional profit or loss during the initial offering
period as a result of the possible fluctuations in the market value of the
Bonds in the Trust after the Date of Deposit.
As stated under "Redemption and Repurchase of Units," the Sponsor intends
to maintain a secondary market for the Units of the Trust. In so maintaining
a market, the Sponsor will also realize profits or sustain losses in the
amount of any difference between the price at which Units are purchased and
the price at which Units are resold (which price is based on the bid prices
of the Bonds in the Trust and includes a sales charge of 5.50%). In
addition, the Sponsor will also realize profits or sustain losses resulting
from a redemption of such repurchased Units at a price above or below the
purchase price for such Units.
If the Sponsor shall fail to perform any of its duties under the
Indenture or become incapable of acting or become bankrupt or its affairs are
taken over by public authorities, then the Trustee may (i) appoint a
successor Sponsor at rates of compensation deemed by the Trustee to be
reasonable and not exceeding amounts prescribed by the Securities and
Exchange Commission, (ii) terminate the Indenture and liquidate the Trust as
provided therein or (iii) continue to act as Trustee without terminating the
Indenture.
TRUSTEE INFORMATION
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 duties of the Trustee are primarily ministerial in nature. It did
not participate in the selection of Bonds for the Trust portfolio. The
Trustee is empowered to sell, for the purpose of redeeming Units tendered by
any Certificateholder and for the payment of expenses for which funds may not
be available, such of the Bonds as are designated by the Sponsor as the
Trustee in its sole discretion may deem necessary. The Sponsor is empowered,
but not obligated, to direct the Trustee to dispose of Bonds upon default in
payment of principal or interest, institution of certain legal proceedings,
default under other documents adversely affecting debt service, default in
payment of principal or interest on other obligations of the same issuer,
decline in projected income pledged for debt service on revenue bonds or
decline in price or the occurrence of other market or credit factors,
including advance refunding (i.e., the issuance of refunding securities and
the deposit of the proceeds thereof in trust or escrow to retire the refunded
securities on their respective redemption dates), so that in the opinion of
the Sponsor the retention of such Bonds would be detrimental to the interest
of the Certificateholders. The Sponsor is required to instruct the Trustee
to reject any offer made by an issuer of any of the Bonds to issue new
obligations in exchange or substitution for any Bond pursuant to a refunding
or refinancing plan, except that the Sponsor may instruct the Trustee to
accept or reject such an offer or to take any other action with respect
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thereto as the Sponsor may deem proper if (1) the issuer is in default with
respect to such Bond or (2) in the written opinion of the Sponsor the issuer
will probably default with respect to such Bond in the reasonably foreseeable
future. Any obligation so received in exchange or substitution will be held
by the Trustee subject to the terms and conditions of the Indenture to the
same extent as Bonds originally deposited thereunder. Within five days after
the deposit of obligations in exchange or substitution for underlying Bonds,
the Trustee is required to give notice thereof to each Certificateholder,
identifying the Bonds eliminated and the Bonds substituted therefor. Except
as stated herein and under "Description of Trust Portfolio" regarding the
substitution of Replacement Bonds for Failed Bonds, the acquisition by the
Trust of any securities other than the Bonds initially deposited is not
permitted.
If any default in the payment of principal or interest on any Bond occurs
and no provision for payment is made therefor within 30 days, the Trustee is
required to notify the Sponsor thereof. If the Sponsor fails to instruct the
Trustee to sell or to hold such Bond within 30 days after notification by the
Trustee to the Sponsor of such default, the Trustee may in its discretion
sell the defaulted Bond and not be liable for any depreciation or loss
thereby incurred.
In accordance with the Indenture, the Trustee shall keep proper books of
record and account of all transactions at its office for the Trust. Such
records shall include the name and address of, and the certificates issued by
the Trust to, every Certificateholder of the Trust. Such books and records
shall be open to inspection by any Certificateholder at all reasonable times
during the usual business hours. The Trustee shall make such annual or other
reports as may from time to time be required under any applicable state or
Federal statute, rule or regulation. The Trustee is required to keep a
certified copy or duplicate original of the Indenture on file in its office
available for inspection at all reasonable times during the usual business
hours by any Certificateholder, together with a current list of the Bonds
held in the Trust.
Under the Indenture, the Trustee or any successor trustee may resign and
be discharged of the trust created by the Indenture 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
Certificateholders then of record, not less than 60 days before the date
specified in such notice when such resignation is to take effect. The
Sponsor upon receiving notice of such resignation is obligated to appoint a
successor trustee promptly. If, upon such resignation, no successor trustee
has been appointed and has accepted the appointment within 30 days after
notification, the retiring Trustee may apply to a court of competent
jurisdiction for the appointment of a successor. The Sponsor may remove the
Trustee and appoint a successor trustee as provided in the Indenture at any
time or without cause. Notice of such removal and appointment shall be
mailed to each Certificateholder by the Sponsor. Upon execution of a written
acceptance of such appointment by such successor trustee, all the rights,
powers, duties and obligations of the original trustee shall vest in the
successor. The resignation or removal of a Trustee becomes effective only
when the successor trustee accepts its appointment as such or when a court of
competent jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which it may
be consolidated, or any corporation resulting from any merger or
consolidation to which a Trustee shall be a party, shall be the successor
trustee. The Trustee must be a corporation organized under the laws of the
United States, or any state thereof, be authorized under such laws to
exercise trust powers and have at all times an aggregate capital, surplus and
undivided profits of not less than $500,000.
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LEGAL AND AUDITING MATTERS
The legality of the Units offered hereby and certain matters relating to
Federal law have been passed upon by Chapman and Cutler, Chicago, Illinois as
special counsel for the Sponsor.
The statement of net assets, including the Trust portfolio, of the Trust
at the opening of business on May 5, 1997, the Date of Deposit, appearing in
this Prospectus and Registration Statement has been audited by Allen, Gibbs &
Houlik, L.C., independent auditors, as set forth in their report appearing
elsewhere herein, and is included in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
DESCRIPTION OF BOND RATINGS
STANDARD & POOR'S, A DIVISION OF THE MCGRAW-HILL COMPANIES, INC. A
description of the applicable Standard & Poor's rating symbols and their
meanings follows:
A Standard & Poor's corporate or municipal bond rating is a current
assessment of the creditworthiness of an obligor with respect to a specific
debt obligation. This assessment may take into consideration obligators such
as guarantors, insurers or lessees.
The bond rating is not a recommendation to purchase, sell or hold a
security, inasmuch as it does not comment as to market price or suitability
for a particular investor.
The ratings are based on current information furnished by the issuer or
obtained by Standard & Poor's from other sources it considers reliable.
Standard & Poor's does not perform an audit in connection with any rating and
may, on occasion, rely on unaudited financial information. The ratings may
be changed, suspended or withdrawn as a result of changes in, or
unavailability of, such information, or for other circumstances.
The ratings are based, in varying degrees, on the following
considerations:
1) Likelihood of default--capacity and willingness of the obligor as to
the timely payment of interest and repayment of principal in accordance
with the terms of the obligation;
2) Nature of and provisions of the obligation;
3) Protection afforded by, and relative position of, the obligation in
the event of bankruptcy, reorganization or other arrangements under the
laws of bankruptcy and other laws affecting creditors' rights.
AAA-This is the highest rating assigned by Standard & Poor's to a debt
obligation. Capacity to pay interest and repay principal is extremely
strong.
AA-Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in small degree.
A-Bonds rated A have a strong capacity to pay interest and repay
principal, although they are somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions than bonds in higher
rated categories.
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<PAGE>
BBB-Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity to pay interest and repay
principal for bonds in this category than for bonds in higher rated
categories.
Plus (+) or Minus (-): The ratings from "AA" to "BBB" may be modified by
the addition of a plus or minus sign to show relative standing within the
major rating categories.
Provisional Ratings: The letter "p" indicates that the rating is
provisional. A provisional rating assumes the successful completion of the
project being financed by the issuance of the bonds being rated and indicates
that payment of debt service requirements is largely or entirely dependent
upon the successful and timely completion of the project. This rating,
however, while addressing credit quality subsequent to completion of the
project, makes no comment on the likelihood of, or the risk of default upon
failure of, such completion. Accordingly, the investor should exercise his
own judgment with respect to such likelihood and risk.
L: The letter "L" indicates that the rating pertains to the principal
amount of those bonds where the underlying deposit collateral is fully
insured by the Federal Savings & Loan Insurance Corp. or the Federal Deposit
Insurance Corp.
MOODY'S INVESTORS SERVICE, INC. A brief description of the applicable
Moody's Investors Service, Inc. rating symbols and their meanings follow:
Aaa-Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt-edge." Interest payments are protected by a large, or by an
exceptionally stable, margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such issues.
Their safety is so absolute that, with the occasional exception of oversupply
in a few specific instances, characteristically, their market value is
affected solely by money market fluctuations.
Aa-Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or
fluctuations of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than in Aaa securities. Their market value is virtually immune to all
but money market influences, with the occasional exception of oversupply in
few specific instances.
A-Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate, but elements may
be present which suggest a susceptibility to impairment sometime in the
future. The market value of A-rated bonds may be influenced to some degree
by economic performance during a sustained period of depressed business
conditions, but, during periods of normalcy, A-rated bonds frequently move in
parallel with Aaa and Aa obligations, with the occasional exception of
oversupply in a few specific instances.
Baa-Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected or poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any
26
<PAGE>
great length of time. Such bonds lack outstanding investment characteristics
and in fact have speculative characteristics as well. The market value of
Baa-rated bonds is more sensitive to changes in economic circumstances, and
aside from occasional speculative factors applying to some bonds of this
class, Baa market valuations move in parallel with Aaa, Aa and A obligations
during periods of economic normalcy, except in instances of oversupply.
Moody's bond rating symbols may contain numerical modifiers of a generic
rating classification. The modifier 1 indicates that the bond ranks at the
high end of its category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates that the issue ranks in the lower end of its generic
rating category.
Con. (---)-Bonds for which the security depends upon the completion of
some act or the fulfillment of some condition are rated conditionally. These
are bonds secured by a) earnings of projects under construction, b) earnings
of projects unseasoned in operation experience, c) rentals which begin when
facilities are completed, or d) payments to which some other limiting
condition attaches. Parenthetical rating denotes probable credit stature
upon completion of construction or elimination of basis of condition.
TAX-EXEMPT/TAXABLE ESTIMATED CURRENT RETURN EQUIVALENTS
As of the date of this Prospectus, the following table shows the
approximate taxable estimated current returns for individuals that are
equivalent to tax-exempt estimated current returns under Federal taxes, using
the published 1997 Federal tax rates*. The table incorporates increased tax
rates for higher-income taxpayers that were included in the Revenue
Reconciliation Act of 1993. The combined Federal tax brackets shown reflect
the fact that state tax payments are deductible for Federal tax purposes and
that no deduction of the Federal tax is claimed for state purposes. The
table illustrates approximately what you would have to earn on taxable
investments to equal tax-exempt estimated current returns in your income tax
bracket under present tax law. Locate your income (after deductions and
exemptions), then locate your tax bracket based on joint or single tax
filing. Read across to the equivalent taxable estimated return you would
need to match tax free income. The taxable equivalent estimated current
returns may be somewhat higher than the equivalent returns indicated in the
table below for those individuals who have Adjusted Gross Income in excess of
$121,200.
<TABLE>
<CAPTION>
TAXABLE INCOME TAX-EXEMPT ESTIMATED CURRENT RETURN
SINGLE JOINT
RETURN RETURN TAX 41/2% 5% 51/2% 6% 61/2% 7% 71/2%
IN THOUSANDS BRACKET EQUIVALENT TAXABLE ESTIMATED CURRENT RETURNS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0 - 24.65 $ 0 - 41.20 15.00% 5.29% 5.88% 6.47% 7.06% 7.65% 8.24% 8.82%
24.65 - 59.75 41.20 - 99.60 28.00 6.25 6.94 7.64 8.33 9.03 9.72 10.42
59.75 - 124.65 99.60 - 151.75 31.00 6.52 7.25 7.97 8.70 9.42 10.14 10.87
124.65 - 271.05 151.75 - 271.05 36.00 7.03 7.81 8.59 9.38 10.16 10.94 11.72
Over 271.05 Over 271.05 39.60 7.45 8.28 9.11 9.93 10.76 11.59 12.42
</TABLE>
* The table does not reflect the effect of two adjustments designed to phase-
out the advantage of itemized deductions and personal exemptions for higher
income taxpayers. These adjustments, in effect, increase the marginal
Federal tax rate above the stated marginal tax rate by eliminating a portion
of claimed itemized deductions and potentially eliminating entirely the
effect of personal exemptions in determining Taxable Income. The total
impact of the adjustments, which will vary from taxpayer to taxpayer, is
dependent upon the itemized deductions and personal exemptions claimed.
27
<PAGE>
A comparison of tax-free and equivalent taxable estimated current returns
with the returns on various taxable investments is one element to consider in
making an investment decision. The Sponsor may from time to time in its
advertising and sales material compare the then current estimated returns on
the Trust and return over specified periods on other similar Ranson &
Associates, Inc. sponsored unit investment trusts with returns on taxable
investments such as corporate or U.S. Government bonds, bank CDs and money
market accounts or money market funds, each of which has investment
characteristics that may differ from those of the Trust. U.S. Government
bonds, for example, are backed by the full faith and credit of the U.S.
Government and bank CDs and money market accounts are insured by an agency of
the federal government. Money market accounts and money market funds provide
stability of principal, but pay interest at rates that vary with the
condition of the short-term debt market. The investment characteristics of
the Trust are described more fully elsewhere in this Prospectus.
28
<PAGE>
REPORT OF ALLEN, GIBBS & HOULIK, L.C.
INDEPENDENT AUDITORS
CERTIFICATEHOLDERS
RANSON UNIT INVESTMENT TRUSTS
SERIES 57
We have audited the accompanying statement of net assets, including
the Trust portfolio, of Ranson Unit Investment Trusts, Series 57, as of the
opening of business on May 5, 1997, the Date of Deposit. This statement of
net assets is the responsibility of the Trust's Sponsor. Our
responsibility is to express an opinion on this statement of net assets
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 statement of net assets is
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the statement of
net assets. Our procedures included confirmation of the Bonds held by the
Trustee at the opening of business on May 5, 1997. An audit also includes
assessing the accounting principles used and significant estimates made by
the Trust's Sponsor, as well as evaluating the overall statement of net
assets presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the statement of net assets referred to above presents
fairly, in all material respects, the financial position of Ranson Unit
Investment Trusts, Series 57 at the opening of business on May 5, 1997, in
conformity with generally accepted accounting principles.
ALLEN, GIBBS & HOULIK, L.C.
Wichita, Kansas
May 5, 1997
RANSON UNIT INVESTMENT TRUSTS
SERIES 57
STATEMENT OF NET ASSETS
AT THE OPENING OF BUSINESS ON MAY 5, 1997, THE DATE OF DEPOSIT
<TABLE>
<CAPTION>
TRUST PROPERTY
<S> <C>
Investment in securities--
Bonds deposited in Trust (1) $
Accrued interest to Date of Deposit on Bonds (2) __________
Organizational costs (3) __________
Less distributions payable (2) __________
Less accrued organizational costs (3) __________
Net assets, applicable to ______outstanding Units of fractional undivided interest $__________
INTEREST OF CERTIFICATEHOLDERS
Cost to investors (4) $
Less sales charge (4) __________
Net proceeds to the Trust, equal to net assets $__________
</TABLE>
NOTES:
(1) Aggregate cost to the Trust of the Bonds listed in the Trust Portfolio is
based on offering side evaluations determined by Stern Brothers & Co.
(2) Pursuant to the Indenture, the Trustee will advance funds in the amount
of $_________ representing the accrued interest to _________, 1997 (the
"First Settlement Date") and such advance will be distributed to the
Sponsor.
(3) The aggregate cost to investors (exclusive of interest) includes a sales
charge computed at the rate of 2.00% of the Public Offering Price
(equivalent to 2.041% of the net amount invested) assuming no reduction
of sales charge for quantity purchases.
(4) The Trust will bear all or a portion of its organizational costs, which
the Sponsor intends to defer and amortize over a five-year period.
Organizational costs have been estimated based on a projected Trust size
of $___________. Organizational costs may be more or less than this
estimate based upon the actual size of the Trust
29
<PAGE>
<TABLE>
RANSON UNIT INVESTMENT TRUSTS, SERIES 57
TRUST PORTFOLIO AT THE OPENING OF BUSINESS ON MAY 5, 1997, THE DATE OF DEPOSIT
<CAPTION>
NAME OF ISSUER, TITLE, COUPON RATE
AND MATURITY DATE OF BONDS DEPOSITED
AGGREGATE IN TRUST OR REPRESENTED BY SPONSOR'S REDEMPTION COST OF BONDS
PRINCIPAL CONTRACTS TO PURCHASE BONDS(1)(5) RATINGS(2) PROVISION(3) TO TRUST(4)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
</TABLE>
Insurance guaranteeing the payment of principal and interest, when due, on
the Bonds has been obtained from a municipal bond insurance company as
indicated in the Bond name by the issuer of the Bonds or by a prior owner of
the Bonds.
See "Notes to Trust Portfolio.
30
<PAGE>
NOTES TO TRUST PORTFOLIO:
(1) Contracts to acquire Bonds were entered into by the Sponsor during the
period April 29, 1997 through ____________, 1997. All Bonds are
represented by regular way contracts, unless otherwise indicated, for the
performance of which cash or an irrevocable letter of credit has been
deposited with the Trustee.
(2) Securities ratings represent the latest published ratings by Standard &
Poor's, unless marked with a "#" in which case the rating is by Moody's
or unless marked with a "&&" in which case the Sponsor expects Standard &
Poor's or Moody's, upon the receipt of an insurance policy obtained by
the issuer, to issue a AAA rating. A brief description of the applicable
Standard & Poor's or Moody's rating symbols and their meanings is set
forth under "Description of Bond Ratings." "N/R" indicates that no
rating has been provided for such Bonds; in the opinion of the Sponsor,
these Bonds have credit characteristics sufficiently similar to the
credit characteristics of interest-bearing tax-exempt obligations that
were so rated as to be acceptable for acquisition by the Trust. "**"
indicates rating is contingent upon receipt by Standard & Poor's or
Moody's of final documentation.
(3) There is shown under this heading the year in which each issue of Bonds
is initially redeemable and the redemption price for that year or, if
currently redeemable, the redemption price in 1996 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 Trust 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 a sinking fund is established
with respect to an issue of Bonds.
(4) During the initial offering period, evaluations of the Bonds are made on
the basis of current offering side evaluations of the Bonds. The
aggregate offering price is greater than the aggregate bid price of the
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 Bonds in the Trust, at the opening of
business on the Date of Deposit, is as follows:
<TABLE>
<CAPTION>
COST OF BONDS PROFIT TO ANNUAL INTEREST BID SIDE VALUE
TO SPONSOR SPONSOR INCOME TO TRUST OF BONDS
------------- --------- --------------- --------------
<C> <C> <C> <C>
</TABLE>
(6) This Bond has been purchased at a discount from the par value because
there is no stated interest income thereon. Such bonds are normally
described as "zero coupon" bonds. Over the life of such bonds the value
increases such that upon maturity the holders of such bonds will receive
100% of the principal amount thereof. Approximately __% of the aggregate
principal amount of the Bonds in the Trust are "zero coupon" bonds.
@@ This Bond was issued at an original issue discount.
* This Bond is represented by a "when, as and if issued" or "delayed
delivery" contract and has an expected settlement date after the "First
Settlement Date" of the Trust. Interest on this Bond begins accruing to
the benefit of Unitholders on the date of delivery
31
<PAGE>
ESTIMATED CASH FLOWS TO UNITHOLDERS
The table below sets forth the per Unit estimated monthly distribution of
interest and principal to Unitholders. The table assumes no changes in
expenses, no changes in the current interest rates, no exchanges,
redemptions, sales or prepayments of the underlying Bonds prior to maturity
or expected retirement date and the receipt of principal upon maturity or
expected retirement date. To the extent the foregoing assumptions change,
actual distributions will vary.
SERIES 57
<TABLE>
<CAPTION>
ESTIMATED ESTIMATED ESTIMATED
DISTRIBUTION DATES INTEREST PRINCIPAL TOTAL
(EACH MONTH) DISTRIBUTION DISTRIBUTION DISTRIBUTION
- ------------------------------------ ------------ ------------ -------------
<S> <C> <C> <C>
May 1997 $ 0.00 $
June 1997 - May 2001 0.00
June 2001
July 2001 - August 2003
September 2003
October 2003 - November 2015
December 2015
January 2016 August 2017
September 2017
October 2017 - October 2021
November 2021
December 2021 - October 2022
November 2022
</TABLE>
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No person is authorized to give any information or to make any
representations not contained in this Prospectus; and any information or
representation not contained herein must not be relied upon as having been
authorized by the Trust, the Sponsor or any dealer. 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.
This Prospectus contains information concerning the Trust and the Sponsor,
but does not contain all of the information set forth in the registration
statements and exhibits relating thereto, which the Trust has filed with the
Securities and Exchange Commission, Washington, D.C., under the Securities
Act of 1933 and the Investment Company Act of 1940, and to which reference is
hereby made.
<TABLE>
TABLE OF CONTENTS
<CAPTION>
TITLE PAGE TITLE PAGE
- ----- ---- ----- ----
<S> <C> <C> <C>
General Summary of Information 1 Other Rights of Certificateholders 21
Summary of Essential Financial Information 3 Sponsor Information 22
Summary of the Trust 5 Trustee Information 23
Description of Trust Portfolio 7 Legal and Auditing Matters 25
Objectives of the Trust 10 Description of Bond Ratings 25
Estimated Current Return and Tax-Exempt/Taxable Estimated Current
Estimated Long-Term Return 11 Return Equivalents 27
Public Offering Information 12 Report of Allen, Gibbs & Houlik, L.C.
Accrued Interest 12 Independent Auditors 29
Redemption and Repurchase of Units 13 Statement of Net Assets 29
Distribution of Interest and Principal 14 Notes to Trust Portfolio 31
Tax Status (Federal, State, Capital Gains) 15 Estimated Cash Flows to Unitholders 32
Expenses of the Trust 19
Evaluation of the Trust 20
</TABLE>
33
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents:
The facing sheet
The Cross-Reference Sheet
The Prospectus
The signatures
The consents of independent public accountants, evaluator,
rating services and legal counsel
The following exhibits:
1.1 Trust Agreement between Ranson & Associates, Inc., as Depositor, and
The Bank of New York, as Trustee (to be supplied by amendment).
3.1 Opinion and consent of Chapman and Cutler, special counsel to the
Depositor, as to legality of securities being registered (to be
supplied by amendment).
3.2 Opinion of Chapman and Cutler, special counsel to the Depositor, as to
Federal and Kansas tax status of securities being registered
(to be supplied by amendment).
4.1 Consent of Stern Brothers & Co., special evaluator (to be supplied
by amendment).
4.2 Consent of Allen, Gibbs & Houlik, L.C. (to be supplied by amendment).
S-1
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Ranson Unit Investment Trusts, Series 57 has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Wichita and State of Kansas on the 2nd day of
May, 1997.
RANSON UNIT INVESTMENT TRUSTS, SERIES 57
(Registrant)
By RANSON & ASSOCIATES, INC.
(Depositor)
Attest Alex R. Meitzner
----------------------------------
Chairman of the Board and Director
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities
and on MaY 2, 1997.
SIGNATURE TITLE
- --------------------- --------------------
ROBIN K. PINKERTON President, Secretary, )
- --------------------- Treasurer and Director )
Robin K. Pinkerton
ALEX R. MEITZNER Chairman of the Board )
- --------------------- of Directors ) ALEX R. MEITZNER
Alex R. Meitzner -----------------------
Chairman of the Board
of Directors
- ------------------------------------------------------------------------------
An executed copy of each of the related powers of attorney was filed with the
Securities and Exchange Commission in connection with the Registration
Statement on Form S-6 of The Kansas Tax-Exempt Trust, Series 51
(File No. 33-46376) and Series 52 (File No. 33-47687) and the same are
hereby incorporated herein by this reference.
S-2
