===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
----------------------
AMENDMENT NO. 1
TO
REGISTRATION STATEMENT
ON
FORM S-6
----------------------
FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
A. EXACT NAME OF TRUST:
RANSON UNIT INVESTMENT TRUSTS, SERIES 58
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:
Copy to:
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
CALCULATION OF REGISTRATION FEE
===============================================================================
<TABLE>
<CAPTION>
TITLE AND AMOUNT
OF SECURITIES PROPOSED MAXIMUM AMOUNT OF
BEING REGISTERED AGGREGATE OFFERING PRICE REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Series 58 An indefinite number of Units of Indefinite Not Applicable
Beneficial Interest pursuant to
Rule 24f-2 under the Investment
Company Act of 1940
</TABLE>
E. APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC:
As soon as practicable after the effective date
of the Registration Statement.
_
|X| Check box if it is proposed that this filing will become effective at
2:00 P.M. on May 22, 1997 pursuant to paragraph (b) of Rule 487.
===============================================================================
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
RANSON UNIT INVESTMENT TRUSTS, SERIES 58
------------------------
CROSS-REFERENCE SHEET
(FORM N-8B-2 ITEMS REQUIRED BY INSTRUCTIONS AS
TO THE PROSPECTUS IN FORM S-6)
<TABLE>
<CAPTION>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
----------- ---------------------
I. ORGANIZATION AND GENERAL INFORMATION
<S> <C>
1. (a)Name of trust................... ) Prospectus front cover
(b)Title of securities issued...... ) Essential Information
2. Name and address of each depositor. ) General Information--Administration of
) the Trusts
3. Name and address of trustee........ ) *
4. Name and address of principal
underwriters...................... ) General Information-the Sponsor
5. State of organization of trust..... ) The Trust Funds
6. Execution and termination of trust ) The Trust Funds; General Information--
agreement......................... ) Administration of the Trusts
7. Changes of name.................... ) The Trust Funds
8. Fiscal year........................ ) *
9. Litigation......................... ) *
II. GENERAL DESCRIPTION OF THE TRUST AND
SECURITIES OF THE TRUST
10. (a)Registered or bearer securities. ) General Information--Unitholders
(b)Cumulative or distributive
securities........................ ) The Trust Funds
(c)Redemption...................... ) General Information--Redemption
(d)Conversion, transfer, etc....... ) General Information--Unitholders;
) General Information--Market for Units
(e)Periodic payment plan........... ) *
(f)Voting rights................... ) General Information--Unitholders
</TABLE>
-2-
<PAGE>
<TABLE>
<CAPTION>
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
----------- ---------------------
<S> <C>
(g)Notice of certificateholders.... ) General Information--Investment Supervision;
) General Information--
) Administration of the Trusts; General
) Information--Unitholders
(h)Consents required............... ) General Information--Unitholders;
) General Information--Administration of
) the Trusts
(i)Other provisions................ ) Insured Corporate Series--Federal Tax
) Status; GNMA Portfolios--Federal Tax
) Status; US Treasury Portfolio Series--
) Federal Tax Status
11. Type of securities comprising ) The Trust Funds; Insured Corporate Series--
units............................. ) Portfolio; GNMA Portfolios--Portfolios;
) US Treasury Portfolio Series--Portfolio
12. Certain information regarding peri-
odic payment certificates......... ) *
13. (a) Load, fees, expenses, etc...... ) General Information--Interest,
) Estimated Long-Term Return
) and Estimated Current Return; General
) Information--Expenses of the Trusts
(b)Certain information regarding
periodic payment certifi-
cates....................... ) *
(c)Certain percentages........... ) Essential Information; Public Offering
) of Units
(d)Certain other fees, etc. pay-
able by holders............. ) General Information--Unitholders
(e)Certain profits receivable by
depositor, principal under-
writers, trustee or affili- ) General Information--Expenses of the
ated persons................ ) Trusts; Public Offering of Units
(f)Ratio of annual charges to in-
come........................ ) *
14. Issuance of trust's securities... ) The Trust Funds;
) General Information--Unitholders
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
----------- ---------------------
<S> <C>
15. Receipt and handling of payments
from purchasers................. ) *
16. Acquisition and disposition of ) The Trust Funds; Insured Corporate Series--
underlying securities........... ) Portfolio; GNMA Portfolios--Portfolios;
) US Treasury Portfolio Series--Portfolio;
) General Information--Investment Supervision
17. Withdrawal or redemption......... ) Market for Units;
) General Information--Redemption;
) Public Offering of Units
18. (a)Receipt, custody and disposi-
tion of income.............. ) General Information--Unitholders
(b)Reinvestment of distributions. ) General Information--Distribution
) Reinvestment
(c)Reserves or special funds..... ) General Information--Expenses of the
) Trusts
(d)Schedule of distributions..... ) *
19. Records, accounts and reports.... ) General Information--Unitholders;
) General Information--Redemption;
) Administration of the Trusts
20. Certain miscellaneous provisions
of trust agreement ) General Information--Administration of
(a)Amendment..................... ) the Trusts
(b)Termination................... ) *
(c)and (d) Trustee, removal and ) General Information--Administration of
successor................... ) the Trusts
(e)and (f) Depositor, removal and ) General Information--Administration of
successor................... ) the Trusts
21. Loans to security holders........ ) *
22. Limitations on liability......... ) General Information--Administration of
) the Trusts
23. Bonding arrangements............. ) *
24. Other material provisions of
trust agreement................. ) *
</TABLE>
-4-
<PAGE>
<TABLE>
<CAPTION>
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
----------- ---------------------
III. ORGANIZATION, PERSONNEL AND
AFFILIATED PERSONS OF DEPOSITOR
<S> <C>
25. Organization of depositor........ ) General Information--Administration of
) the Trusts
26. Fees received by depositor....... ) See Items 13(a) and 13(e)
27. Business of depositor............ ) General Information--Administration of
) the Trusts
28. Certain information as to offi-
cials and affiliated persons of ) General Information--Administration of
depositor....................... ) the Trusts
29. Voting securities of depos- ) General Information--Administration of the
itor...................... ) Trusts
30. Persons controlling deposi-
tor....................... ) *
31. Payment by depositor for
certain services rendered
to trust.................. ) *
32. Payment by depositor for
certain other services
rendered to trust......... ) *
33. Remuneration of employees
of depositor for certain
services rendered to
trust..................... ) *
34. Remuneration of other per-
sons for certain services
rendered to trust......... ) *
IV. DISTRIBUTION AND REDEMPTION
35. Distribution of trust's se- ) Public Offering of Units
curities by states........
36. Suspension of sales of
trust's securities........ ) *
37. Revocation of authority to
distribute................ ) *
38. (a)Method of distribution.. ) Public Offering of Units;
(b)Underwriting agreements. ) General Information--Market for Units;
(c)Selling agreements...... ) Public Offering of Units
39. (a)Organization of princi- ) General Information--Administration
pal underwriters.......... ) of the Trusts
(b)N.A.S.D. membership of
principal underwriters.... ) *
40. Certain fees received by
principal underwriters.... ) See Items 13(a) and 13(e)
41. (a)Business of principal ) General Information--Administration
underwriters.............. ) of the Trusts
(b)Branch offices of prin-
cipal underwriters........ ) *
(c)Salesmen of principal
underwriters.............. ) *
</TABLE>
-5-
<PAGE>
<TABLE>
<CAPTION>
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
----------- ---------------------
<S> <C>
42. Ownership of trust's secu-
rities by certain persons. ) *
43. Certain brokerage commis-
sions received by princi-
pal underwriters.......... ) Public Offering of Units
44. (a)Method of valuation..... ) Public Offering of Units
(b)Schedule as to offering
price..................... ) *
(c)Variation in offering ) Public Offering of Units
price to certain persons..
45. Suspension of redemption
rights.................... ) General Information--Redemption
46. (a)Redemption valuation.... ) General Information--Redemption;
) General Information--Market for Units;
) Public Offering of Units
(b)Schedule as to redemp-
tion price................ ) *
47. Maintenance of position in ) General Information--Market for Units;
underlying securities..... ) Public Offering of Units;
) General Information--Redemption
V. INFORMATION CONCERNING THE TRUSTEE
OR CUSTODIAN
48. Organization and regulation ) General Information--Administration
of trustee................ ) of the Trusts
49. Fees and expenses of trust- ) General Information--Expenses of the Trusts
ee........................
50. Trustee's lien............. ) *
VI. INFORMATION CONCERNING INSURANCE OF
HOLDERS OF SECURITIES
51. Insurance of holders of trust's ) Cover Page; General Information--
securities.................. ) Expenses of the Trusts
</TABLE>
-6-
<PAGE>
<TABLE>
<CAPTION>
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
----------- ---------------------
VII. POLICY OF REGISTRANT
<S> <C>
52. (a) Provisions of trust agreement ) The Trust Funds; Insured Corporate
with respect to selection or ) Series--Portfolio; GNMA Portfolios--Portfolios;
elimination of underlying se- ) US Treasury Portfolio Series--Portfolio;
curities..................... ) General Information--Investment Supervision
(b) Transactions involving elimi-
nation of underlying securi-
ties......................... ) *
(c) Policy regarding substitution
or elimination of underlying ) General Information--Investment
securities................... ) Supervision;
(d) Fundamental policy not other-
wise covered................. ) *
53. Tax status of Trust.............. ) Essential Information; Insured Corporate
) Series--Federal Tax Status; GNMA Portfolios--
) Federal Tax Status; US Treasury Portfolio
) Series--Federal Tax Status
VIII. FINANCIAL AND STATISTICAL INFORMATION
Trust's securities during last
54. ten years........................ ) *
55. ) *
56. Certain information regarding pe-
riodic payment certificates..... ) *
57. ) *
58. ) *
59. Financial statements (Instruction
1(c) to Form S-6)............... ) *
</TABLE>
- --------------------
* Inapplicable, answer negative or not required.
-7-
<PAGE>
RANSON UNIT INVESTMENT TRUSTS, SERIES 58
Insured Corporate Series 11 (the "Insured Corporate Series" or the "Insured
Trusts") was formed for the purpose of providing a high level of current
income through investment in a fixed portfolio consisting primarily of
corporate debt obligations issued after July 18, 1984 by utility companies.
The Insured Corporate Series may contain zero coupon U.S. Treasury
Obligations. FOR FOREIGN INVESTORS WHO ARE NOT U.S. CITIZENS OR RESIDENTS,
INTEREST INCOME FROM THE TRUST MAY NOT BE SUBJECT TO FEDERAL WITHHOLDING
TAXES IF CERTAIN CONDITIONS ARE MET. SEE "THE INSURED CORPORATE SERIES--
FEDERAL TAX STATUS."
GNMA Portfolio Series 8 and GNMA Portfolio Series 9 ( each a "GNMA
Portfolio") were formed for the purpose of obtaining safety of capital and
current monthly distributions of interest and principal through investment in
a portfolio primarily consisting of mortgage-backed securities of the
modified pass-through type. All payments of principal and interest on the
mortgage-backed securities are fully guaranteed by the Government National
Mortgage Association ("GNMA"). The full faith and credit of the United
States is pledged to the payment of the Securities in each series of the GNMA
Portfolios but the Units themselves are not backed by such full faith and
credit. The value of the Units, the estimated current return and the
estimated long-term return to new purchasers will fluctuate with the value of
the portfolio which will generally decrease or increase inversely with
changes in interest rates.
U.S. Treasury Portfolio Series 19 (the "U.S. Treasury Portfolio") was formed
for the purpose of providing safety of capital and investment flexibility
through an investment in a portfolio of U.S. Treasury Obligations that are
backed by the full faith and credit of the United States government.
Interest income, if any, distributed by the Trust is exempt from state
personal income taxes in all states. The U.S. Treasury Portfolio may be
available to non-resident aliens and the income from such Trust, provided
certain conditions are met, will be exempt from withholding for U.S. federal
income tax for such foreign investors. A FOREIGN INVESTOR MUST PROVIDE A
COMPLETED W-8 FORM TO HIS FINANCIAL REPRESENTATIVE OR THE TRUSTEE TO AVOID
WITHHOLDING ON HIS ACCOUNT. The value of the Units, the estimated current
return and the estimated long-term return to new purchasers will fluctuate
with the value of the portfolio which will generally decrease inversely
with changes in interest rates.
Units of the Trusts are not deposits or obligations of, or guaranteed by, any
bank, and Units are not federally insured or otherwise protected by the
Federal Deposit Insurance Corporation and involve investment risk including
loss of principal. The use of the term "Insured" in the name of a Trust does
not mean that the Units of the Trust are insured by any governmental or
private organization. The Units are not insured.
Insurance guaranteeing the scheduled payment of principal and interest on all
of the Bonds in the portfolio of each Insured Trust (other than any U.S.
Treasury Obligations) has been obtained directly by the issuer or the Sponsor
from MBIA Insurance Corporation or other insurers. See "Insurance on the
Bonds" for each Insured Trust. Insurance obtained by a Bond issuer is
effective so long as such Bonds are outstanding. THE INSURANCE DOES NOT
RELATE TO THE UNITS OF THE INSURED TRUSTS OFFERED HEREBY OR TO THEIR MARKET
VALUE. No representation is made as to any insurer's ability to meet its
commitments.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The investor is advised to read and retain this Prospectus
for future reference.
THE DATE OF THIS PROSPECTUS IS MAY 22, 1997.
<PAGE>
SUMMARY
PUBLIC OFFERING PRICE. The Public Offering Price per Unit of a Trust Fund
during the initial offering period is equal to a pro rata share of the
offering prices of the Securities in such Trust Fund plus or minus a pro rata
share of cash, if any, in the Principal Account held or owned by such Trust
Fund, plus accrued interest plus that sales charge indicated under "Essential
Information." The secondary market Public Offering Price per Unit will be
based upon a pro rata share of the bid prices of the Securities in each Trust
Fund plus or minus a pro rata share of cash, if any, in the Principal Account
held or owned by such Trust Fund, plus accrued interest plus the applicable
sales charge indicated under "Public Offering of Units--Public Offering
Price." The sales charge is reduced on a graduated scale for certain sales.
The minimum purchase for each Trust is $1,000.
INTEREST AND PRINCIPAL DISTRIBUTIONS. Distributions of the estimated annual
interest income to be received by each Trust Fund, after deduction of
estimated expenses, will be made monthly. See "Essential Information."
Distributions of funds, if any, in the Principal Account will be made as
provided in "General Information--Unitholders--Distributions to Unitholders."
REINVESTMENT. Each Unitholder of a Trust Fund offered herein may elect to
have distributions of principal or interest or both automatically invested
without charge in shares of certain mutual funds sponsored by Zurich Kemper
Investments, Inc. See "General Information--Distribution Reinvestment."
ESTIMATED LONG-TERM RETURN AND ESTIMATED CURRENT RETURN. As of the opening of
business on the Initial Date of Deposit, the Estimated Long-Term Return and
the Estimated Current Return, if applicable, for each Trust were as set forth
in "Essential Information." The Estimated Current Return is calculated by
dividing the estimated net annual interest income per Unit by the Public
Offering Price. The estimated net annual interest income per Unit will vary
with changes in fees and expenses of the Trustee, the Sponsor and Evaluator
and with the principal prepayment, redemption, maturity and exchange or sale
of Securities while the Public Offering Price will vary with changes in the
offering price of the underlying Securities and with changes in the accrued
interest; therefore, there is no assurance that the present Estimated Current
Return will be realized in the future. Estimated Long-Term Return is
calculated using a formula which (1) takes into consideration, and determines
and factors in the relative weightings of, the market values, yields (which
takes into account the amortization of premiums and the accretion of
discounts) and estimated retirements or average lives of all of the
Securities in the applicable Trust and (2) takes into account the expenses
and sales charge associated with each Trust Unit. Since the market values and
estimated retirements or average lives of the Securities and the expenses of
a Trust will change, there is no assurance that the present Estimated Long-
Term Return will be realized in the future. Estimated Current Return and
Estimated Long-Term Return are expected to differ because the calculation of
Estimated Long-Term Return reflects the estimated date and amount of
principal returned while Estimated Current Return calculations include only
net annual interest income and Public Offering Price.
MARKET FOR UNITS. After the initial offering period, while under no
obligation to do so, the Sponsor intends to, and certain Underwriters may,
maintain a market for the Units and to offer to repurchase such Units at
prices subject to change at any time which are based on the aggregate bid
side evaluation of the Securities in a Trust plus accrued interest.
RISK FACTORS. An investment in the Trusts should be made with an
understanding of the risks associated therewith, including, among other
factors, the inability of the issuer or an insurer, if any, to pay the
principal of or interest on a security when due, volatile interest rates,
volatile market value of the securities, early call provisions, and changes
to the tax status of the Securities. See "The Insured Corporate Series--Risk
Factors," "The GNMA Portfolios--Risk Factors" and "The U.S. Treasury
Portfolios--Risk Factors."
2
<PAGE>
RANSON UNIT INVESTMENT TRUSTS, SERIES 58
ESSENTIAL INFORMATION
AS OF THE OPENING OF BUSINESS ON THE INITIAL DATE OF DEPOSIT
SPONSOR AND EVALUATOR: RANSON & ASSOCIATES, INC.
TRUSTEE: THE BANK OF NEW YORK
The income, expense and distribution data set forth below has been calculated
for Unitholders purchasing less than 10,000 Units of a Trust (less than
50,000 Units of a U.S. Treasury Portfolio). Unitholders purchasing 10,000
Units or more of a Trust (50,000 Units or more of a U.S. Treasury Portfolio)
will receive a slightly higher return because of the reduced sales charge for
larger purchases.
<TABLE>
<CAPTION>
Insured GNMA GNMA U.S. Treasury
Corporate Portfolio Portfolio Portfolio
Series 11 Series 8 Series 9 Series 19
----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Public Offering Price per Unit (1)(2) $ 10.019 $ 10.097 $ 10.213 $ 10.073
Principal Amount of Securities per Unit $ 10.000 $ 10.000 $ 10.000 $ 10.000
Estimated Current Return based on Public
Offering Price (3)(4)(5) 7.06% 6.38% 6.92% 6.04%
Estimated Long-Term Return (3)(4)(5) 7.18% 6.40% 6.95% 6.02%
Estimated Normal Annual Distribution per Unit $ .7092 $ - $ - $ .6084
Principal Amount of Securities $ 800,000 $ 200,000 $ 200,000 $ 500,000
Number of Units $ 80,000 $ 20,000 $ 20,000 $ 50,000
Fractional Undivided Interest per Unit $ 1/80,000 $ 1/20,000 $ 1/20,000 $ 1/50,000
Calculation of Public Offering Price:
Aggregate Offering Price of Securities $ 762,201 $ 194,881 $ 196,197 $ 493,863
Aggregate Offering Price of Securities per Unit $ 9.528 $ 9.744 $ 9.810 $ 9.877
Plus Sales Charge per Unit (6) $ .491 $ .353 $ .403 $ .196
Public Offering Price per Unit (1)(2) $ 10.019 $ 10.097 $ 10.213 $ 10.073
Redemption Price per Unit $ 9.454 $ 9.700 $ 9.747 $ 9.861
Sponsor's Initial Repurchase Price per Unit $ 9.528 $ 9.744 $ 9.810 $ 9.877
Excess of Public Offering Price per Unit
over Redemption Price per Unit $ .565 $ .397 $ .466 $ .212
Excess of Public Offering Price per Unit
over Sponsor's Initial Repurchase Price per Unit $ .491 $ .353 $ .403 $ .196
Calculation of Estimated Net Annual
Interest Income per Unit(11):
Estimated Annual Interest $ .7320 6.625% 7.250% $ .6253
Less: Estimated Annual Expense $ .0244 .184% .184% $ .0164
Estimated Net Annual Interest Income $ .7076 6.442% 7.067% $ .6089
Estimated Daily Rate of Net Interest Accrual per Unit $ .00197 - - $ .00169
Type of GNMA Securities - Midget Long Term -
Estimated Average Life of GNMA Securities - 6.3 10.4 -
Minimum Principal Value of the Trust under which
Trust Agreement may be terminated (7) $ 160,000 40% 40% $ 100,000
</TABLE>
Evaluations for purposes of sale, purchase or redemption of Units are made as
of the close of business of the Sponsor (currently 3:15 p.m. Central Time)
(the "Evaluation Time") next following receipt of an order for a sale or
purchase of Units or receipt by the Trustee of Units tendered for redemption.
3
<PAGE>
ESSENTIAL INFORMATION--(CONTINUED)
<TABLE>
<CAPTION>
Insured GNMA GNMA U.S. Treasury
Corporate Portfolio Portfolio Portfolio
Series 11 Series 8 Series 9 Series 19
----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Trustee's Annual Fee per $1,000 principal amount
of Securities (8) $ 1.49 $ .86 $ .86 $ .99
Interest Payments (9):
First Payment per Unit, representing 3 days $ .00591 $ .00537 $ .00589 $ .00507
Estimated Normal Monthly Distribution per Unit $ .0591 - - $ .0507
Estimated Normal Annual Distribution per Unit $ .7076 - - $ .6089
Sales Charge (6):
As a percentage of Public Offering Price per Unit 4.900% 3.500% 3.950% 1.950%
As a percentage of net amount invested 5.153% 3.623% 4.108% 1.984%
As a percentage of net amount invested in
earning assets 5.182% 3.623% 4.108% 2.025%
</TABLE>
<TABLE>
<S> <C>
Date of Trust Agreement May 22, 1997
First Settlement Date May 28, 1997
Mandatory Termination Date December 31, 2035
Estimated Annual Organizational Expenses (10) $0.001 per Unit
Evaluator's Annual Evaluation Fee--
Insured Corporate Series Maximum of $0.30 per $1,000 Principal Amount of Securities
Sponsor's Annual Surveillance Fee--
Insured Corporate Series Maximum of $0.25 per $1,000 Principal Amount of Securities
Evaluator's Annual Evaluation Fee--
GNMA Portfolio Maximum of $0.18 per $1,000 Principal Amount of Securities
Sponsor's Annual Surveillance Fee--
GNMA Portfolio Maximum of $0.25 per $1,000 Principal Amount of Securities
Evaluator's Annual Evaluation Fee--
U.S. Treasury Portfolio Maximum of $0.10 per $1,000 Principal Amount of Securities
Sponsor's Annual Surveillance Fee--
U.S. Treasury Portfolio Maximum of $0.15 per $1,000 Principal Amount of Securities
</TABLE>
(1) Anyone ordering Units for settlement after the First Settlement Date
will pay accrued interest from such date to the date of settlement
(normally three business days after order) less distributions from the
Interest Account subsequent to the First Settlement Date. For purchases
settling on the First Settlement Date, no accrued interest will be added
to the Public Offering Price.
(2) Many unit investment trusts issue a number of units such that each
unit represents approximately $1,000 principal amount of underlying
securities. The Sponsor, on the other hand, in determining the number of
Units for each Trust has elected not to follow this format but rather to
provide that number of Units which will establish as close as possible as
of the Initial Date of Deposit a Principal Amount of Securities per Unit
of $10.
(3) The Estimated Current Return and Estimated Long-Term Return are
increased for transactions entitled to a reduced sales charge. See
"Public Offering of Units--Public Offering Price."
(4) The Estimated Current Returns are calculated by dividing the estimated
net annual interest income per Unit by the Public Offering Price. The
estimated net annual interest income per Unit will vary with changes in
fees and expenses of the Trustee, the Sponsor and the Evaluator and with
the principal prepayment, redemption, maturity, exchange or sale of
Securities while the Public Offering Price will vary with changes in the
4
<PAGE>
offering price of the underlying Securities and with changes in the
accrued interest; therefore, there is no assurance that the present
Estimated Current Returns indicated above will be realized in the future.
The Estimated Long-Term Returns are calculated using a formula which (1)
takes into consideration, and determines and factors in the relative
weightings of, the market values, yields (which takes into account the
amortization of premiums and the accretion of discounts) and estimated
retirement dates of all of the Securities in the applicable Trust and (2)
takes into account the expenses and sales charge associated with each
Trust Unit. Since the market values and estimated retirement dates of the
Securities and expenses of each Trust will change, there is no assurance
that the present Estimated Long-Term Returns as indicated above will be
realized in the future. The Estimated Current Returns and Estimated Long-
Term Returns are expected to differ because the calculation of the
Estimated Long-Term Returns reflects the estimated date and amount of
principal returned while the Estimated Current Return calculations
include only net annual interest income and Public Offering Price.
(5) This figure is based on estimated per Unit cash flows. Estimated cash
flows will vary with changes in fees and expenses, with changes in
current interest rates and with the principal prepayment, redemption,
maturity, call, exchange or sale of the underlying Securities. The
estimated cash flows to Unitholders for the Trusts are either set forth
under "Estimated Cash Flows to Unitholders" for each Trust or are
available upon request at no charge from the Sponsor.
(6) The sales charge as a percentage of the net amount invested in earning
assets will increase as accrued interest increases. Transactions subject
to quantity discounts (see "Public Offering of Units--Public Offering
Price") will have reduced sales charges, thereby reducing all percentages
in the table.
(7) The minimum principal value of each Trust (other than a Tax-Exempt
Portfolio) under which the Trust Agreement may be terminated is 40% of
the total aggregate principal amount of securities deposited in each such
Trust during the primary offering period. The minimum principal value of
each Tax-Exempt Portfolio under which the Trust Agreement may be
terminated is 20% of the initial aggregate principal amount of securities
deposited in such Trust.
(8) See "General Information--Expenses of the Trusts."
(9) Unitholders will receive interest distributions monthly. The Record
Date is the first day of the month, commencing June 1, 1997, and the
distribution date is the fifteenth day of the month, commencing June 15,
1997.
(10) Each 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 a five year period or the
life of the related Trust if less than five years. See "General
Information-Expenses of the Trusts" and "Statements of Net Assets."
Historically, the sponsors of unit investment trusts have paid all the
costs of establishing such trusts.
(11) Estimated annual interest amounts are expressed as percentages for
the GNMA Portfolios due to the prepayment risk associated with GNMA
Securities. See "The Trust Funds" and "General Information-Interest,
Estimated Long-Term Return and Estimated Current Return."
5
<PAGE>
THE TRUST FUNDS
Ranson Unit Investment Trusts, Series 58 includes the following separate unit
investment trusts created by the Sponsor under the name Ranson Unit
Investment Trusts: "Insured Corporate, Series 11," "GNMA Portfolio, Series
8," "GNMA Portfolio, Series 9" and "U.S. Treasury Portfolio, Series 19".
Each of the Trust Funds is separate and is designated by a different series
number. Each of the Trust Funds was created under the laws of the State of
New York pursuant to a trust indenture dated the Initial Date of Deposit (the
"Trust Agreements") between Ranson & Associates, Inc. (the "Sponsor" and
"Evaluator") and The Bank of New York (the "Trustee").* Ranson & Associates,
Inc. is the Sponsor of the Trust and is successor sponsor of all unit
investment trusts formerly sponsored by EVEREN Unit Investment Trusts, a
service of EVEREN Securities, Inc., including EVEREN Unit Investment Trusts,
Series 52 and previous Series.
The Insured Corporate Series was formed for the purpose of providing a high
level of current income through investment in a fixed portfolio consisting
primarily of long-term corporate debt obligations issued after July 18, 1984
by utility companies.
The GNMA Portfolios were formed for the purpose of obtaining safety of
capital and current monthly distributions of interest and principal through
investment in a portfolio primarily consisting of mortgage-backed securities
of the modified pass-through type on which all payments of principal and
interest are fully guaranteed by the GNMA. The full faith and credit of the
United States is pledged to the payment of the Securities in each GNMA
Portfolio but the Units themselves are not backed by such full faith and
credit.
The U.S. Treasury Portfolio was formed for the purpose of providing safety of
capital and investment flexibility through an investment in a portfolio of
U.S. Treasury Obligations that are backed by the full faith and credit of the
United States government. The U.S. Treasury Portfolio was also formed for
the purpose of providing protection against changes in interest rates and
also passing through to Unitholders in all states the exemption from state
personal income taxes afforded to direct owners of U.S. obligations. The
value of the Units, the estimated current return and the estimated long-term
return to new purchasers will fluctuate with the value of the Securities in
the portfolio which will generally decrease or increase inversely with
changes in interest rates.
There is, of course, no guarantee that the Trust Funds' objectives will be
achieved.
As used herein, the terms "Securities" and "Bonds" mean the obligations
initially deposited in the Trusts described under "Portfolio" for each Trust
(including all contracts to purchase such obligations accompanied by an
irrevocable letter of credit sufficient to perform such contracts initially
deposited in the Trusts) and any additional obligations deposited in the
Trusts following the Initial Date of Deposit. As used herein, the term
"Corporate Bonds" means the corporate obligations (and contracts) included in
the Insured Corporate Series. "Portfolio Obligations" means the obligations
(and contracts for the purchase thereof) included in the GNMA Portfolios. As
used herein, the term "U.S. Treasury Obligations" means the obligations (and
contracts) included in the U.S. Treasury Portfolios and any U.S. Treasury
obligations included in the Insured Corporate Series.
On the Initial Date of Deposit, the Sponsor delivered to the Trustee that
aggregate principal amount of Securities or contracts for the purchase
thereof for deposit in the Trust Funds as set forth under "Essential
- --------------------
* Reference is made to the Trust Agreements, and any statements contained
herein are qualified in their entirety by the provisions of the Trust
Agreements.
6
<PAGE>
Information." Of such principal amount, the amount specified in "Essential
Information" was deposited in each Trust. In exchange for the Securities so
deposited, the Trustee delivered to the Sponsor documentation evidencing the
ownership of that number of Units for each Trust as indicated under
"Essential Information." Each Trust initially consists of delivery statements
(i.e., contracts) to purchase obligations. The Sponsor has a limited right of
substitution for such Securities in the event of a failed contract. See
"General Information--Trust Information."
Additional Units of each Trust may be issued from time to time following the
Initial Date of Deposit by depositing in the Trust additional Securities (or
contracts for the purchase thereof together with cash or irrevocable letters
of credit) or cash (including a letter of credit) with instructions to
purchase additional Securities. As additional Units are issued by a Trust as
a result of the deposit of additional Securities by the Sponsor, the
aggregate value of the Securities in the Trust will be increased and the
fractional undivided interest in the Trust represented by each Unit will be
decreased. The Sponsor may continue to make additional deposits of Securities
into a Trust following the Initial Date of Deposit, provided that such
additional deposits will be in principal amounts which will maintain the same
original percentage relationship among the principal amounts of the
Securities in such Trust established by the initial deposit of the
Securities. Thus, although additional Units will be issued, each Unit will
continue to represent the same principal amount of each Security, and the
percentage relationship among the principal amount of each Security in the
related Trust will remain the same. If the Sponsor deposits cash to purchase
additional Securities exiting and new investors may experience a dilution of
their investments and a reduction in their anticipated income because of
fluctuations in the prices of the Securities between the time of the cash
deposit and the purchase of the Securities and because the Trust will pay any
associated brokerage fees. To minimize this effect, the Trust will attempt
to purchase the Securities as close to the evaluation time or as close to the
evaluation prices as possible.
Each Unit initially offered represents that undivided interest in the
appropriate Trust indicated under "Essential Information." To the extent that
any Units are redeemed by the Trustee or additional Units are issued as a
result of additional Securities being deposited by the Sponsor, the
fractional undivided interest in a Trust represented by each unredeemed Unit
will increase or decrease accordingly, although the actual interest in such
Trust represented by such fraction will remain unchanged. Units will remain
outstanding until redeemed upon tender to the Trustee by Unitholders, which
may include the Sponsor, or until the termination of the Trust Agreement.
An investment in Units of a Trust Fund should be made with an understanding
of the risks which an investment in fixed rate debt obligations may entail,
including the risk that the value of the portfolio and hence of the Units
will decline with increases in interest rates. The value of the underlying
Securities will fluctuate inversely with changes in interest rates. The
uncertain economic conditions of recent years, together with the fiscal
measures adopted to attempt to deal with them, have resulted in wide
fluctuations in interest rates and, thus, in the value of fixed rate debt
obligations generally and long-term obligations in particular. The Sponsor
cannot predict the degree to which such fluctuations will continue in the
future.
7
<PAGE>
REPORT OF ALLEN, GIBBS & HOULIK, L.C.
INDEPENDENT AUDITORS
UNITHOLDERS
RANSON UNIT INVESTMENT TRUSTS, SERIES 58
We have audited the accompanying statements of net assets, including the
Trust portfolios, of Ranson Unit Investment Trusts, Series 58, as of the
opening of business on May 22, 1997, the Initial Date of Deposit. The
statements of net assets are the responsibility of the Sponsor. Our
responsibility is to express an opinion on the statements 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 statements of net assets are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the statements of net
assets. Our procedures included confirmation of a letter of credit deposited
to purchase Securities by correspondence with the Trustee. An audit also
includes assessing the accounting principles used and significant estimates
made by the Sponsor, as well as evaluating the overall statements of net
assets presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the statements of net assets referred to above present
fairly, in all material respects, the financial position of Ranson Unit
Investment Trusts, Series 58 as of May 22, 1997, in conformity with generally
accepted accounting principles.
ALLEN, GIBBS & HOULIK, L.C.
Wichita, Kansas
May 22, 1997
8
<PAGE>
RANSON UNIT INVESTMENT TRUSTS, SERIES 58
STATEMENTS OF NET ASSETS
AT THE OPENING OF BUSINESS ON MAY 22, 1997, THE INITIAL DATE OF DEPOSIT
<TABLE>
<CAPTION>
Insured GNMA GNMA U.S. Treasury
Corporate Portfolio Portfolio Portfolio
Series 11 Series 8 Series 9 Series 19
----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
TRUST PROPERTY
Investment in securities--
Securities deposited in Trust (1) $ 762,201 $ 194,881 $ 196,197 $ 493,863
Accrued interest to Initial Date of Deposit on
Securities (2) 22,029 773 846 8,819
Organizational Costs (3) 10,000 2,500 2,500 5,000
Less distributions payable (2) 22,029 773 846 8,819
Less accrued organizational costs (3) 10,000 2,500 2,500 5,000
Net assets, applicable to outstanding Units of ----------- ----------- ----------- -----------
fractional undivided interest $ 762,201 $ 194,881 $ 196,197 $ 493,863
=========== =========== =========== ===========
INTEREST OF UNITHOLDERS
Cost to investors (4) $ 801,473 $ 201,949 $ 204,231 $ 503,685
Less sales charge (4) 39,272 7,068 8,034 9,822
----------- ----------- ----------- -----------
Net proceeds to the Trust, equal to net assets $ 762,201 $ 194,881 $ 196,197 $ 493,863
=========== =========== =========== ===========
</TABLE>
NOTES:
(1) Aggregate cost to the Trust of the Securities listed in the Trust
Portfolio is based on offering side evaluations determined by Cantor
Fitzgerald & Co.
(2) Pursuant to the Trust Agreement, the Trustee will advance funds in the
amount of $32,342 representing the accrued interest to May 28, 1997 (the
"First Settlement Date") and such advance will be distributed to the
Sponsor.
(3) Each Trust will bear all or a portion of its organizational costs, which
the Sponsor intends to defer and amortize over a five year period or over
the life of the related Trust if less than five years. Organizational
costs have been estimated based on a projected Trust size of $20,000,000,
$5,000,000, $5,000,000 and $10,000,000 for Insured Corporate Series 11,
GNMA Portfolio Series 8, GNMA Portfolio Series 9 and U.S. Treasury
Portfolio Series 19, respectively. Organizational costs may be or more
or less than this estimate based upon the actual size of each Trust.
(4) The aggregate cost to investors (exclusive of interest) includes a sales
charge as set forth under "Essential Information" assuming no reduction
of sales charge for quantity purchases.
9
<PAGE>
PUBLIC OFFERING OF UNITS
PUBLIC OFFERING PRICE. Units of a Trust are offered at the Public Offering
Price thereof. During the initial offering period, the Public Offering Price
per Unit is equal to the aggregate of the offering side evaluations of the
Securities in such Trust (as determined, pursuant to the terms of a contract
with the Evaluator, by Cantor Fitzgerald & Co., a non-affiliated firm
regularly engaged in the business of evaluating, quoting or appraising
comparable securities), plus or minus a pro rata share of cash, if any, in
the Principal account held or owned by such Trust plus accrued interest plus
the applicable sales charge referred to in the tables below divided by the
number of outstanding Units of such Trust. The Public Offering Price for
secondary market transactions, on the other hand, is based on the aggregate
bid side evaluations of the Securities in a Trust (also, currently, as
determined by Cantor Fitzgerald & Co.), plus or minus cash, if any, in the
Principal Account held or owned by such Trust, plus accrued interest plus a
sales charge based upon the dollar weighted average maturity of such Trust.
For the Insured Corporate Series, the sales charge per Unit will be reduced
during the initial offering period pursuant to the following graduated scale:
<TABLE>
<CAPTION>
Weighted Average Years to Maturity
----------------------------------
15 or More
----------------------------------
Percent of Percent of
Offering Net Amount
Price Invested
Number of Units ---------- ----------
<S> <C> <C>
1 to 9,999 Units 4.9% 5.152%
10,000 to 24,999 Units 4.5 4.712
25,000 to 49,999 Units 4.3 4.493
50,000 to 99,999 Units 3.5 3.627
100,000 or more Units 3.0 3.093
</TABLE>
For GNMA Portfolios, the sales charge per Unit will be reduced during the
primary and secondary offering periods pursuant to the following graduated
scale:
<TABLE>
<CAPTION>
Midget Trust Long-Term Trust
-------------------------- --------------------------
Percent of Percent of Percent of Percent of
Offering Net Amount Offering Net Amount
Price Invested Price Invested
Ticket Size* ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Less than $100,000 3.50% 3.627% 3.95% 4.112%
$100,000 to $249,999 3.25 3.359 3.70 3.842
$250,000 to $499,999 2.85 2.934 3.35 3.466
$500,000 to $999,999** 2.60 2.669 3.10 3.199
</TABLE>
- --------------------
* The breakpoint sales charges are also applied on a Unit basis utilizing a
breakpoint equivalent in the above table of $10 per Unit and will be
applied on whichever basis is more favorable to the investor.
** For any transactions in excess of these amounts, contact the Sponsor for
the applicable sales charge.
10
<PAGE>
The sales charge per Unit for U.S. Treasury Portfolio Series (other than
Series which contain predominantly zero coupon U.S. Treasury Obligations)
will be reduced pursuant to the following graduated scale:
<TABLE>
<CAPTION>
Weighted Average Years to Maturity
----------------------------------
3 to 5.99
----------------------------------
Percent of Percent of
Offering Net Amount
Price Invested
Ticket Size* ---------- ----------
<S> <C> <C>
Less than $500,000 1.95% 1.989%
$500,000 to $999,999 1.70 1.729
$1,000,000 to $1,499,999** 1.30 1.317
</TABLE>
- --------------------
* The breakpoint sales charges are also applied on a Unit basis utilizing a
breakpoint equivalent in the above table of $10 per Unit and will be
applied on whichever basis is more favorable to the investor.
** For any transactions in excess of these amounts, contact the Sponsor for
the applicable sales charge.
As indicated above, in connection with secondary market transactions the
sales charge is based upon the dollar weighted average maturity of a Trust
and is determined in accordance with the tables set forth below. For purposes
of this computation, Securities will be deemed to mature on their expressed
maturity dates unless: (a) the Securities have been called for redemption or
funds or securities have been placed in escrow to redeem them on an earlier
call date, in which case such call date will be deemed to be the date upon
which they mature; or (b) such Securities are subject to a "mandatory
tender," in which case such mandatory tender will be deemed to be the date
upon which they mature. The effect of this method of sales charge computation
will be that different sales charge rates will be applied to a Trust based
upon the dollar weighted average maturity of such Trust's portfolio, in
accordance with the following schedules.
For the Insured Corporate Series, in connection with secondary market
transactions the sales charge per Unit will be reduced as set forth below:
<TABLE>
<CAPTION>
Secondary
-----------------------------------------------
Dollar Weighted Average Years to Maturity*
4 to 7.99 8 to 14.99 15 or more
-----------------------------------------------
Dollar Amount of Trade Sales Charge (Percent of Public Offering Price)
---------------------- -----------------------------------------------
<S> <C> <C> <C>
$1,000 to $99,999 3.50% 4.50% 5.50%
$100,000 to $499,999 3.25 4.25 5.00
$500,000 to $999,999 3.00 4.00 4.50
$1,000,000 or more 2.75 3.75 4.00
</TABLE>
- --------------------
* If the dollar weighted average maturity of a Trust Fund is from 1 to 3.99
years, the sales charge is 2% and 1.5% of the Public Offering Price for
purchases of $1,000 to $249,999 and $250,000 or more, respectively.
11
<PAGE>
In connection with secondary market transactions of all U.S. Treasury
Portfolios, the sales charge per Unit will be reduced as set forth below:
<TABLE>
<CAPTION>
Secondary
---------------------------------------------------------------------------
Dollar Weighted Average Years to Maturity
---------------------------------------------------------------------------
0-1.99 Yrs. 2-2.99 Yrs. 3-4.99 Yrs. 5-6.99 Yrs. 7-9.99 Yrs.
----------- ----------- ----------- ----------- -----------
Dollar Amount of Trade Sales Charge (Percent of Public Offering Price)
---------------------- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Less than $500,000 1.25% 1.50% 1.75% 2.25% 3.00%
$500,000 to $999,999 1.00 1.25 1.50 1.75 2.50
$1,000,000 to $1,499,999* 1.00 1.00 1.25 1.50 2.00
</TABLE>
- --------------------
* For any transaction in excess of $1,499,999 contact the Sponsor for the
applicable sales charge.
The reduced sales charges resulting from quantity discounts as shown in the
tables above will apply to all purchases of Units on any one day by the same
purchaser from the same Underwriter or dealer and for this purpose purchases
of Units of a Trust Fund will be aggregated with concurrent purchases of
Units of any other unit investment trust that may be offered by the Sponsor.
In addition, during the initial offering period only, the reduced sales
charges resulting from quantity discounts as shown in the table above will
apply to all purchases of Units of a single Trust by the same person on such
person's initial purchase date or on any day subsequent to such initial
purchase date, provided that the person purchasing the Units purchased at
least 25,000 Units on such initial purchase date; to determine the applicable
sales charge reduction it is necessary to accumulate all purchases made on
the purchaser's initial purchase date and all purchases made subsequent to
such initial purchase date.
For purposes of the reduced sales charges from quantity discounts, Units
purchased in the name of a spouse or child (under 21) of such purchaser will
be deemed to be additional purchases by such purchaser. The reduced sales
charges will also be applicable to a trust or other fiduciary purchasing for
a single trust estate or single fiduciary account.
Units may be purchased in the primary or secondary market at the Public
Offering Price less the concession the Sponsor typically allows to dealers
and other selling agents for purchases (see "Public Distribution of Units")
by investors who purchase Units through registered investment advisers,
certified financial planners or registered broker-dealers who in each case
either charge periodic fees for financial planning, investment advisory or
asset management services, or provide such services in connection with the
establishment of an investment account for which a comprehensive "wrap fee"
charge is imposed.
A purchaser desiring to purchase during a 13 month period $500,000 or more of
any combination of series of Ranson Unit Investment Trusts may qualify for a
reduced sales charge by signing a nonbinding Letter of Intent with any single
broker-dealer. After signing a Letter of Intent, at the date total
purchases, less redemptions, of units of any combination of series of Ranson
Unit Investment Trusts by a purchaser (including units purchased in the name
of the spouse of a purchaser or in the name of a child of such purchaser
under 21 years of age) exceed $500,000, the selling broker-dealer, bank or
other will credit the unitholder with cash as a retroactive reduction of the
sales charge on such units equal to the amount which would have been paid for
the total aggregated sale amount. If a purchaser does not complete the
required purchases under the Letter of Intent within the 13 month period, no
such retroactive sales charge reduction shall be made. To qualify as a
12
<PAGE>
purchase under a Letter of Intent each purchase of units of Ranson Unit
Investment Trusts must equal or exceed $100,000.
Unitholders of the various series of Ranson or EVEREN Unit Investment Trusts
Insured Corporate Series who meet the conditions in the next succeeding
sentence may, during the primary offering period of an Investment Grade
Series or a High Yield Series only, acquire Units of such Series at the
reduced sales charge equivalent to purchases during the initial offering
period of 100,000 or more Units. First, the special sales charge discount
only applies to purchases acquired with funds received from distributions of
unscheduled principal payments in connection with units issued in such series
and, second, the minimum purchase must be at least $1,000.
The Sponsor intends to permit officers, directors and employees of the
Sponsor and Evaluator and, at the discretion of the Sponsor, registered
representatives of selling firms to purchase Units of a Trust without a sales
charge, although a transaction processing fee may be imposed on such trades.
Had Units of a Trust been available for sale at the opening of business on
the Initial Date of Deposit, the Public Offering Price would have been as
shown under "Essential Information." The Public Offering Price per Unit of a
Trust on the date of this Prospectus or on any subsequent date will vary from
the amount stated under "Essential Information" in accordance with
fluctuations in the prices of the underlying Securities and the amount of
accrued interest on the Units. On the Initial Date of Deposit, pursuant to an
exemptive order from the Securities and Exchange Commission, the Public
Offering Price at which Units will be sold will not exceed the price
determined as of the opening of business on the Initial Date of Deposit as
shown under "Essential Information"; however, should the value of the
underlying Securities decline, purchasers will, of course, be given the
benefit of such lower price. The aggregate bid and offering side evaluations
of the Securities shall be determined (a) on the basis of current bid or
offering prices of the Securities, (b) if bid or offering prices are not
available for any particular Security, on the basis of current bid or
offering prices for comparable bonds, (c) by determining the value of
Securities on the bid or offer side of the market by appraisal, or (d) by any
combination of the above.
The foregoing evaluations and computations shall be made as of the evaluation
time stated under "Essential Information," on each business day commencing
with the Initial Date of Deposit of the Securities, effective for all sales
made during the preceding 24-hour period.
The interest on the Securities deposited in a Trust, less the related
estimated fees and expenses, is estimated to accrue in the annual amounts per
Unit set forth under "Essential Information." The amount of net interest
income which accrues per Unit may change as Securities mature or are
redeemed, exchanged or sold, or as the expenses of a Trust change or the
number of outstanding Units of a Trust changes.
Although payment is normally made three business days following the order for
purchase, payments may be made prior thereto. A person will become the owner
of Units on the date of settlement provided payment has been received. Cash,
if any, made available to the Sponsor prior to the date of settlement for the
purchase of Units may be used 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. If a Unitholder desires to have certificates
representing Units purchased, such certificates will be delivered as soon as
possible following his written request therefor. For information with respect
to redemption of Units purchased, but as to which certificates requested have
not been received, see "General Information--Redemption" below.
13
<PAGE>
ACCRUED INTEREST. Accrued interest is the accumulation of unpaid interest on
a security from the last day on which interest thereon was paid. Interest on
Securities generally is paid semi-annually (monthly in the case of Ginnie
Maes, if any) although a Trust accrues such interest daily. Because of this,
a Trust always has an amount of interest earned but not yet collected by the
Trustee. For this reason, with respect to sales settling subsequent to the
First Settlement Date, the Public Offering Price of Units will have added to
it the proportionate share of accrued interest to the date of settlement.
Unitholders will receive on the next distribution date of a Trust the amount,
if any, of accrued interest paid on their Units.
In an effort to reduce the amount of accrued interest which would otherwise
have to be paid in addition to the Public Offering Price in the sale of Units
to the public, the Trustee will advance the amount of accrued interest as of
the First Settlement Date and the same will be distributed to the Sponsor as
the Unitholder of record as of the First Settlement Date. Consequently, the
amount of accrued interest to be added to the Public Offering Price of Units
will include only accrued interest from the First Settlement Date to the date
of settlement, less any distributions from the Interest Account subsequent to
the First Settlement Date.
Because of the varying interest payment dates of the Securities, accrued
interest at any point in time will be greater than the amount of interest
actually received by the Trusts and distributed to Unitholders. Therefore,
there will always remain an item of accrued interest that is added to the
value of the Units. If a Unitholder sells or redeems all or a portion of his
Units, he will be entitled to receive his proportionate share of the accrued
interest from the purchaser of his Units. Since the Trustee has the use of
the funds held in the Interest Account for distributions to Unitholders and
since such Account is noninterest-bearing to Unitholders, the Trustee
benefits thereby.
COMPARISON OF PUBLIC OFFERING PRICE AND REDEMPTION PRICE. While the Initial
Public Offering Price of Units will be determined on the basis of the current
offering prices of the Securities in a Trust, the redemption price per Unit
(as well as the secondary market price per Unit) at which Units may be
redeemed (see "General Information--Redemption") will be determined on the
basis of the current bid prices of the Securities. As of the opening of
business on the Initial Date of Deposit, the Public Offering Price per Unit
(based on the offering prices of the Securities in a Trust and including the
sales charge) exceeded the redemption price at which Units could have been
redeemed (based upon the current bid prices of the Securities in a Trust) by
the amount shown under "Essential Information." Under current market
conditions the bid prices for U.S. Treasury Obligations are expected to be
approximately 1/8 to 1/4 of 1% lower than the offer price of such
obligations. In the past, bid prices on securities similar to those in the
Trust Funds have been lower than the offering prices thereof by as much as 5%
or more of principal amount in the case of inactively traded bonds or as
little as 1/2 of 1% in the case of actively traded bonds, but the difference
between such offering and bid prices may be expected to average 3% to 4% of
principal amount. For this reason, among others (including fluctuations in
the market prices of the Securities and the fact that the Public Offering
Price includes a sales charge), the amount realized by a Unitholder upon any
redemption of Units may be less than the price paid for such Units.
PUBLIC DISTRIBUTION OF UNITS. The Sponsor intends to qualify the Units for
sale in a number of states (except for an Insured State Trust or uninsured
State Trust which will be qualified for sale only in the state for which such
Trust is named). Units will be sold through dealers who are members of the
National Association of Securities Dealers, Inc. and through others. Sales
may be made to or through dealers at prices which represent discounts from
the Public Offering Price as set forth below. Certain commercial banks are
making Units of the Trust Funds available to their customers on an agency
basis. A portion of the sales charge paid by their customers is retained by
14
<PAGE>
or remitted to the banks in the amount shown in the tables below. Under the
Glass-Steagall Act, banks are prohibited from underwriting Trust Fund Units;
however, the Glass-Steagall Act does permit certain agency transactions and
the banking regulators have indicated that these particular agency
transactions are permitted under such Act. In addition, state securities laws
on this issue may differ from the interpretations of federal law expressed
herein and banks and financial institutions may be required to register as
dealers pursuant to state law. The Sponsor reserves the right to change the
discounts set forth below from time to time. In addition to such discounts,
the Sponsor may, from time to time, pay or allow an additional discount, in
the form of cash or other compensation, to dealers employing registered
representatives who sell, during a specified time period, a minimum dollar
amount of Units of a Trust and other unit investment trusts created by the
Sponsor. The difference between the discount and the sales charge will be
retained by the Sponsor. For Tax-Exempt Portfolios only, any dealer who sells
at least those amounts of Units set forth under "The Tax-Exempt Portfolios--
Underwriting" on the Initial Date of Deposit will be entitled to a concession
or agency commission equal to the corresponding takedown set forth in that
section for those Units sold on the Initial Date of Deposit.
For the Insured Corporate Series, the primary and secondary market
concessions or agency commissions are as follows:
<TABLE>
<CAPTION>
Primary Market
---------------------------------------------------------------------------
Volume Discounts per Unit*
---------------------------------------------------------
Regular Firm Sales or Firm Sales or Firm Sales or
Concession or Sale Sale Sale
Agency Arrangements Arrangements Arrangements
Commission 25,000 to 49,999 50,000 to 99,999 100,000 or more
------------- ---------------- ---------------- ---------------
Weighted Average Years to Maturity
15 or 15 or 15 or 15 or
Number of $10 Units more more more more
- ---------------------- ------- ------- ------- ------
<S> <C> <C> <C> <C>
1 to 9,999 Units 3.20% 3.40% 3.50% 3.60%
10,000 to 24,999 Units 3.20 3.30 3.40 3.50
25,000 to 49,999 Units 3.10 3.20 3.20 3.30
50,000 to 99,999 Units 2.40 2.50 2.50 2.50
100,000 or more Units 2.00 2.10 2.10 2.10
</TABLE>
- --------------------
* Volume concessions of up to the amount shown can be earned as a marketing
allowance at the discretion of the Sponsor during the initial one month
period after the Initial Date of Deposit by firms who reach cumulative
firm sales or sales arrangement levels of at least $250,000. After a
firm has met the minimum $250,000 volume level, volume concessions may be
given on all trades originated from or by that firm, including those
placed prior to reaching the $250,000 level, and may continue to be given
during the entire initial offering period. Firm sales of any primary
market Insured Corporate trust series can be combined for the purposes of
achieving the volume discount. Only sales through the Sponsor qualify
for volume discounts and secondary purchases do not apply. The Sponsor
reserves the right to modify or change those parameters at any time and
make the determination of which firms qualify for the marketing allowance
and the amount paid.
15
<PAGE>
<TABLE>
<CAPTION>
Secondary Market
----------------------------------------------------
Dollar Weighted Average Years to Maturity*
4 to 7.99 8 to 14.99 15 or more
----------------------------------------------------
Dollar Amount of Trade Discount per Unit (Percent of Public Offering Price)
---------------------- ----------------------------------------------------
<S> <C> <C> <C>
$1,000 to $99,999 2.00% 3.00% 4.00%
$100,000 to $499,999 1.75 2.75 3.50
$500,000 to $999,999 1.50 2.50 3.00
$1,000,000 or more 1.25 2.25 2.50
</TABLE>
- --------------------
* If the dollar weighted average maturity of a Trust Fund is from 1 to 3.99
years, the concession or agency commission is 1.00% of the Public
Offering Price.
For GNMA portfolios, the primary and secondary market concessions or agency
commissions are as follows:
<TABLE>
<CAPTION>
Midget Trusts
----------------------------------------------------------------------------
Secondary
Primary Market Market
------------------------------------------------------------- ---------
Volume Discounts**
------------------------------------------------
Firm Sales Firm Sales Firm Sales
Regular or Sale or Sale or Sale
Concession Arrangements Arrangements Arrangements
or Agency ($250,000 to ($500,000 to ($1,000,000 All
Dollar Amount of Trade* Commission $499,999) $999,999) or more) Sales
- ----------------------- ---------- ------------ ------------ ------------ ---------
<S> <C> <C> <C> <C> <C>
$0 to $99,999 2.10% 2.15% 2.20% 2.25% 2.10%
$100,000 to $249,999 2.00 2.05 2.10 2.20 2.10
$250,000 to $499,999 1.75 1.80 1.80 1.85 1.80
$500,000 to $999,999*** 1.50 1.55 1.55 1.60 1.55
</TABLE>
<TABLE>
<CAPTION>
Long Term Trusts
----------------------------------------------------------------------------
Secondary
Primary Market Market
------------------------------------------------------------- ---------
Volume Discounts**
------------------------------------------------
Firm Sales Firm Sales Firm Sales
Regular or Sale or Sale or Sale
Concession Arrangements Arrangements Arrangements
or Agency ($250,000 to ($500,000 to ($1,000,000 All
Dollar Amount of Trade* Commission $499,999) $999,999) or more) Sales
- ----------------------- ---------- ------------ ------------ ------------ ---------
<S> <C> <C> <C> <C> <C>
$0 to $99,999 2.50% 2.60% 2.65% 2.70% 2.60%
$100,000 to $249,999 2.50 2.55 2.60 2.65 2.60
$250,000 to $499,999 2.25 2.30 2.30 2.35 2.30
$500,000 to $999,999*** 2.00 2.05 2.05 2.10 2.05
</TABLE>
* The breakpoint discount are also applied on a Unit basis utilizing a
breakpoint equivalent in the above table of $1,000 per 100 Units.
16
<PAGE>
** Volume discounts will be given to firms who reach cumulative firm sales
or sales arrangement levels of at least $250,000 during the initial one
month period after the Initial Date of Deposit. After a firm has met the
minimum $250,000 volume level, volume discounts will be given on all
trades originated from or by that firm, including those placed prior to
reaching the $250,000 level, and will continue to be given during the
entire initial offering period.
*** For any transactions in excess of these amounts, contact the Sponsor for
the applicable rates.
The primary market concessions or agency commissions for U.S. Treasury
Portfolio Series (other than Series which contain predominantly zero coupon
U.S. Treasury Obligations) are as follows:
<TABLE>
<CAPTION>
Primary Market
---------------------------------------------
Volume Discounts**
-------------------
Firm Sales
Regular or Sale
Concession Arrangements
or Agency ($1,000,000 or
Commission More
------------------- -------------------
0-2.99 3-4.99 0-2.99 3-4.99
Dollar Amount of Trade* Years Years Years Years
- --------------------------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
$0 to $499,999 1.05% 1.10% 1.05% 1.20%
$500,000 to $999,999 .90 1.00 .95 1.10
$1,000,000 to $1,499,999*** .75 .75 .80 .80
</TABLE>
* The breakpoint discounts are also applied on a Unit basis utilizing a
breakpoint equivalent in the above table of $1,000 per 100 Units.
** For U.S. Treasury Portfolio Series other than Series which contain
predominantly zero coupon U.S. Treasury Obligations, volume concessions
of up to the amount listed above can be earned as a marketing allowance
at the discretion of the Sponsor during the initial one month period
after the Initial Date of Deposit for firms who reach cumulative firm
sales or sales arrangement levels of at least $1 million. After a firm
has met the respective minimum volume level, volume concessions will be
given on all trades originated from or by that firm, starting on the
Initial Date of Deposit, including those placed prior to reaching the
minimum level, and will continue to be given during the entire initial
offering period. Firm sales of any primary U.S. Treasury Portfolio
Series issued can be combined for the purposes of achieving the volume
discount. Only sales through the Sponsor qualify for volume concessions
and secondary purchases do not apply. The Sponsor reserves the right to
modify or change these parameters at any time and make the determination
of which firms qualify for the marketing allowance and the amount paid.
*** For any transactions in excess of these amounts, contact the Sponsor for
the applicable concessions or agency commissions.
17
<PAGE>
In connection with secondary market transactions of all U.S. Treasury
Portfolios, the sales charge per Unit will be reduced as set forth below:
<TABLE>
<CAPTION>
Secondary
---------------------------------------------------------------------------
Dollar Weighted Average Years to Maturity
---------------------------------------------------------------------------
0-1.99 Yrs. 2-2.99 Yrs. 3-4.99 Yrs. 5-6.99 Yrs. 7-9.99 Yrs.
----------- ----------- ----------- ----------- -----------
Dollar Amount of Trade Sales Charge (Percent of Public Offering Price)
---------------------- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Less than $500,000 1.25% 1.50% 1.75% 2.25% 3.00%
$500,000-$999,999 1.00 1.25 1.50 1.75 2.50
$1,000,000-$1,499,999* 1.00 1.00 1.25 1.50 2.00
</TABLE>
* For any transaction in excess of $1,499,999 contact the Sponsor for the
applicable sales charge.
The Sponsor reserves the right to reject, in whole or in part, any order for
the purchase of Units.
PROFITS OF SPONSOR AND UNDERWRITERS. In connection with Trusts other than a
Tax-Exempt Portfolio, the Sponsor will receive gross sales charges equal to
the percentage of the Offering Price of the Units of such Trusts stated under
"Public Offering Price" and will pay a fixed portion of such sales charges to
dealers and agents. As set forth under "The Tax-Exempt Portfolios--
Underwriting," the Underwriters of each Tax-Exempt Portfolio will receive
gross sales charges equal to the percentage of the Public Offering Price of
the Units of such Trust Fund stated under "Public Offering Price" and the
Sponsor will receive a fixed portion of such sales charges. In addition, the
Sponsor may realize a profit or a loss resulting from the difference between
the purchase prices of the Securities to the Sponsor and the cost of such
Securities to a Trust Fund, which is based on the offering side evaluation of
the Securities. See "Portfolio" for each Trust. The Sponsor or Underwriters
may also realize profits or losses with respect to Securities deposited in a
Trust which were acquired from underwriting syndicates of which the Sponsor
or any Underwriter was a member. An underwriter or underwriting syndicate
purchases securities from the issuer on a negotiated or competitive bid
basis, as principal, with the motive of marketing such securities to
investors at a profit. The Sponsor and the Underwriters may realize
additional profits or losses during the initial offering period on unsold
Units as a result of changes in the daily evaluation of the Securities in a
Trust.
18
<PAGE>
THE INSURED CORPORATE SERIES
THE TRUST PORTFOLIO
Insured Corporate Series 11 was formed for the purpose of providing a high
level of current income through investment in a fixed portfolio consisting
primarily of long-term corporate debt obligations issued after July 18, 1984
by utility companies. There is, of course, no guarantee that the objective
will be achieved.
The Trust may be appropriate investment vehicle for investors who desire to
participate in a portfolio of long-term taxable fixed income securities
issued primarily by public utilities with greater diversification than
investors might be able to acquire individually. Diversification of the
Trust's assets will not eliminate the risk of loss always inherent in the
ownership of securities. In addition, Bonds of the type deposited in the
Trust often are not available in small amounts.
The selection of Bonds for the Trust was based largely upon the experience
and judgment of the Sponsor. In making such selections the Sponsor considered
the following factors: (a) the price of the Bonds relative to other issues of
similar quality and maturity; (b) whether the Bonds were issued by a utility
company; (c) the diversification of the Bonds as to location of issuer; (d)
the income to the Unitholders; (e) whether the Bonds were insured or the
availability and cost of insurance for the scheduled payment of principal and
interest on the Bonds; (f) whether the Bonds were issued after July 18, 1984;
(g) the stated maturity of the Bonds; and (h) the call provisions relating to
the Bonds.
As of the Initial Date of Deposit, all of the Bonds in the Trust's portfolio
other than any U.S. Treasury obligations are rated "Aaa" by Moody's Investors
Service, Inc. and "AAA" by Standard & Poor's. Standard & Poor's states that
"bonds rated AAA have the highest rating assigned by Standard & Poor's to a
debt obligation. Capacity to pay interest and principal is extremely strong."
Moody's Investors Service, Inc. states that bonds "which are rated Aaa are
judged to be the best quality. They carry the smallest degree of investment
risk and are generally referred to as 'gilt edge.' Interest payments are
protected by a large or by an exceptionally stable margin and principal is
secure. While the various protective elements are likely to change, such
changes as can be visualized are most unlikely to impair the fundamentally
strong position of such issues. 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." See "Insurance on the Bonds." Subsequent to the Initial Date
of Deposit, a Bond may cease to be so rated. If this should occur, a Trust
would not be required to eliminate the Bond from the Trust, but such event
may be considered in the Sponsor's determination to direct the Trustee to
dispose of such investment. See "General Information--Investment Supervision."
The Trust consists of that number of Bonds divided by type and
concentrations, if any (and percentage of principal amount of the Trust) as
set forth in the following table.
INSURED CORPORATE SERIES IC-1
<PAGE>
<TABLE>
<CAPTION>
SERIES INFORMATION
Series 11
---------
<S> <C>
Number of Securities 7
Corporate Bonds(1)(2) 6
U.S. Treasury Obligations(2) 1
Corporate Bond Concentrations:
State(2) TX 25%
Area Concentrations(3) Northeast 41%
Average life of the Bonds in the Trust(4) 29.7
Percentage of "when, as and if issued" or "delayed delivery" Bonds purchased by the Trust None
Syndication(5) None
</TABLE>
- --------------------
(1) The Corporate Bonds have been issued by public utility companies.
(2) The portfolio percentage in parenthesis represents the principal amount
of such Bonds to the total principal amount of Bonds in the Trust. For a
discussion of the risks associated with investments in the bonds of such
issuers, see "Risk Factors" below.
(3) The percentage provided above represents the percentage of the Principal
Amount of Bonds in a Trust that are concentrated in a specific region of
the country. An adverse economic climate in a given area may affect an
issuer's ability to make payment of principal and/or interest.
(4) The average life of the Bonds in a Trust is calculated based upon the
stated maturities of the bonds in such Trust (or, with respect to Bonds
for which funds or securities have been placed in escrow to redeem such
Bonds on a stated call date, based upon such call date). The average life
of the Bonds in a Trust may increase or decrease from time to time as
Bonds mature or are called or sold.
(5) The Sponsor has participated as either the sole underwriter or manager or
a member of underwriting syndicates from which approximately that
percentage listed above of the aggregate principal amount of the Bonds in
such Trust were acquired.
INSURED CORPORATE SERIES IC-2
<PAGE>
RANSON UNIT INVESTMENT TRUSTS, SERIES 58 INSURED CORPORATE
SERIES 11
PORTFOLIO
AS OF THE INITIAL DATE OF DEPOSIT: MAY 22, 1997
<TABLE>
<CAPTION>
Ratings(2)
-------------------
Aggregate Standard Redemption Cost of Bonds
Principal Name of Issuer(1)(5) Coupon Maturity Moody's & Poor's Provisions(3) to Trust(4)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 25,000 U.S. Treasury(6)# 0.000% 8/15/2022 NA NA Noncallable $ 4,237
100,000 Consolidated Edison 7.500 6/15/2023 Aaa AAA 2003 @ 103.27 98,672
150,000 Commonwealth Edison 7.750 7/15/2023 Aaa AAA 2003 @ 103.77 148,394
75,000 New York Telephone 7.250 2/15/2024 Aaa AAA 2004 @ 103.06 71,381
200,000 Texas Utilities 7.625 7/1/2025 Aaa AAA 2003 @ 102.69 197,174
100,000 Pacific Bell 7.500 2/1/2033 Aaa AAA 2003 @ 102.94 96,728
150,000 Bell South 7.500 6/15/2033 Aaa AAA 2003 @ 104.75 145,615
------- -------
$ 800,000 $762,201
======= =======
</TABLE>
- --------------------
See "Notes to Portfolios."
INSURED CORPORATE SERIES IC-3
<PAGE>
NOTES TO PORTFOLIO:
All Bonds in the Trust except for any U.S. Treasury Obligations are insured
only by MBIA Insurance Corporation. The insurance was obtained either
directly by the issuer of the Bonds or by the Sponsor.
* These Bonds are "when, as and if issued" or "delayed delivery" and have
expected settlement dates after the First Settlement Date.
(1) Contracts to acquire Bonds were entered into by the Sponsor on May 19,
1997. All Bonds are represented by regular way contracts, unless
otherwise indicted, for the performance of which an irrevocable letter of
credit has been deposited with the Trustee.
(2) All the Bonds in the Trusts except for the U.S. Treasury Obligations are
insured by MBIA Insurance Corporation and therefore are rated AAA by
Standard & Poor's and Aaa by Moody's. See "The Trust Portfolio" and
"Insurance on the Bonds."
(3) There is shown under this heading the year in which each issue of Bonds
is initially or currently redeemable and the redemption price for that
year; unless otherwise indicated, each issue continues to be redeemable
at declining prices thereafter, but not below par value. The prices at
which the Bonds may be redeemed or called prior to maturity may or may
not include a premium and, in certain cases, may be less than the cost of
the Bonds to a Trust. In addition, certain Bonds in the portfolio may be
redeemed in whole or in part other than by operation of the stated
redemption provisions under certain unusual or extraordinary
circumstances specified in the instruments setting forth the terms and
provisions of such Bonds.
(4) During the initial offering period, evaluations of 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 the Redemption Price will be determined for
purposes of redemption of Units after the initial offering period.
(5) Other information regarding the Bonds in the Trusts, at the opening of
business on the Initial Date of Deposit, is as follows:
<TABLE>
<CAPTION>
Insured
Corporate
Series 11
-----------
<S> <C>
Cost of Bonds to Sponsor $ 763,075
Profit or (Loss) to Sponsor $ (874)
Annual Interest Income to Trust $ 58,563
Bid Side Value of Bonds $ 756,323
</TABLE>
The Cost of Bonds to Sponsor and Profit or (Loss) to Sponsor reflect
portfolio hedging transaction costs, hedging gains or losses, certain
other carrying costs and the cost of insurance obtained by the Sponsor
for individual Bonds, if any, prior to the date such Bonds are deposited
in a Trust.
"#" indicates that such Bond was issued at an original issue discount.
The tax effect of Bonds issued at an original issue discount is described
in "Federal Tax Status" below.
(6) This Security has been purchased at a deep discount from the par
value because there is little or no stated interest income thereon.
Securities which pay no interest are normally described as "zero coupon"
Securities. Over the life of Securities purchased at a deep discount the
value of such Securities will increase such that upon maturity the
holders of such Securities will receive 100% of the principal amount
INSURED CORPORATE SERIES IC-4
<PAGE>
thereof. Approximately 3.1% of the aggregate principal amount of the
Securities in Series 11 are "zero coupon" Securities.
RISK FACTORS
Public Utility Issues
Certain of the Bonds are obligations of public utility issuers. In general,
public utilities are regulated monopolies engaged in the business of
supplying light, water, power, heat, transportation or means of
communication. Historically, the utilities industry has provided investors in
securities issued by companies in this industry with high levels of
reliability, stability and relative total return on their investments.
However, an investment in Units should be made with an understanding of the
characteristics of such issuers and the risks which such an investment may
entail. General problems of such issuers would include the difficulty in
financing large construction programs in an inflationary period, the
limitations on operations and increased costs and delays attributable to
environmental considerations, the difficulty of the capital market in
absorbing utility debt, the difficulty in obtaining fuel at reasonable prices
and the effect of energy conservation. All of such issuers have been
experiencing certain of these problems in varying degrees. In addition,
federal, state and municipal governmental authorities may from time to time
review existing, and impose additional, regulations governing the licensing,
construction and operation of nuclear power plants, which may adversely
affect the ability of the issuers of certain of the Bonds to make payments of
principal and/or interest on such Bonds.
Utilities are generally subject to extensive regulation by state utility
commissions which, for example, establish the rates which may be charged and
the appropriate rate of return on an approved asset base, which must be
approved by the state commissions. Certain utilities have had difficulty from
time to time in persuading regulators, who are subject to political
pressures, to grant rate increases necessary to maintain an adequate return
on investment and voters in many states have the ability to impose limits on
rate adjustments (for example, by initiative or referendum). Any unexpected
limitations could negatively affect the profitability of utilities whose
budgets are planned far in advance. Also, changes in certain accounting
standards could cause significant write-downs of assets and reductions in
earnings for many investor-owned utilities. In addition, gas pipeline and
distribution companies have had difficulties in adjusting to short and
surplus energy supplies, enforcing or being required to comply with long-term
contracts and avoiding litigation from their customers, on the one hand, or
suppliers, on the other.
Certain of the issuers of the Bonds in a Trust may own or operate nuclear
generating facilities. Governmental authorities may from time to time review
existing, and impose additional, requirements governing the licensing,
construction and operation of nuclear power plants. Nuclear generating
projects in the electric utility industry have experienced substantial cost
increases, construction delays and licensing difficulties. These have been
caused by various factors, including inflation, high financing costs,
required design changes and rework, allegedly faulty construction, objections
by groups and governmental officials, limits on the ability to finance,
reduced forecasts of energy requirements and economic conditions. This
experience indicates that the risk of significant cost increases, delays and
licensing difficulties remains present through completion and achievement of
commercial operation of any nuclear project. Also, nuclear generating units
in service have experienced unplanned outages or extensions of scheduled
outages due to equipment problems or new regulatory requirements sometimes
followed by a significant delay in obtaining regulatory approval to return to
service. A major accident at a nuclear plant anywhere, such as the accident
INSURED CORPORATE SERIES IC-5
<PAGE>
at a plant in Chernobyl, U.S.S.R., could cause the imposition of limits or
prohibitions on the operation, construction or licensing of nuclear units in
the United States.
In view of the uncertainties discussed above, there can be no assurance that
any bond issuer's share of the full cost of nuclear units under construction
ultimately will be recovered in rates or of the extent to which a bond issuer
could earn an adequate return on its investment in such units. The likelihood
of a significantly adverse event occurring in any of the areas of concern
described above varies, as does the potential severity of any adverse impact.
It should be recognized, however, that one or more of such adverse events
could occur and individually or collectively could have a material adverse
impact on the financial condition or the results of operations or on a bond
issuer's ability to make interest and principal payments on its outstanding
debt.
Other general problems of the gas, water, telephone and electric utility
industry (including state and local joint action power agencies) include
difficulty in obtaining timely and adequate rate increases, difficulty in
financing large construction programs to provide new or replacement
facilities during an inflationary period, rising costs of rail transportation
to transport fossil fuels, the uncertainty of transmission service costs for
both interstate and intrastate transactions, changes in tax laws which
adversely affect a utility's ability to operate profitably, increased
competition in service costs, reductions in estimates of future demand for
electricity and gas in certain areas of the country, restrictions on
operations and increased cost and delays attributable to environmental
considerations, uncertain availability and increased cost of capital,
unavailability of fuel for electric generation at reasonable prices,
including the steady rise in fuel costs and the costs associated with
conversion to alternate fuel sources such as coal, availability and cost of
natural gas for resale, technical and cost factors and other problems
associated with construction, licensing, regulation and operation of nuclear
facilities for electric generation, including among other considerations the
problems associated with the use of radioactive materials and the disposal of
radioactive wastes, and the effects of energy conservation. Each of the
problems referred to could adversely affect the ability of the issuer of any
utility Bonds in a Trust to make payments due on these Bonds.
In addition, the ability of state and local joint action power agencies to
make payments on bonds they have issued is dependent in large part on
payments made to them pursuant to power supply or similar agreements.
Courts in Washington and Idaho have held that certain agreements between
Washington Public Power Supply System ("WPPSS") and the WPPSS participants
are unenforceable because the participants did not have the authority to
enter into the agreements. While these decisions are not specifically
applicable to agreements entered into by public entities in other states,
they may cause a reexamination of the legal structure and economic viability
of certain projects financed by joint action power agencies, which might
exacerbate some of the problems referred to above and possibly lead to legal
proceedings questioning the enforceability of agreements upon which payment
of these bonds may depend.
Business conditions of the telephone industry in general may affect the
performance of a Trust. General problems of telephone companies include
regulation of rates for service by the FCC and various state or other
regulatory agencies. However, over the last several years regulation has been
changing, resulting in increased competition. The new approach is more market
oriented, more flexible and more complicated. For example, Federal and
certain state regulators have instituted "price cap" regulation which couples
protection of rate payers for basic services with flexible pricing for
ancillary services. These new approaches to regulation could lead to greater
risks as well as greater rewards for operating telephone companies such as
INSURED CORPORATE SERIES IC-6
<PAGE>
those in the Trusts. Inflation has substantially increased the operating
expenses and cost of plant required for growth, service, improvement and
replacement of existing plant. Continuing cost increases, to the extent not
offset by improved productivity and revenues from increased business, would
result in a decreasing rate of return and a continuing need for rate
increases. Although allowances are generally made in ratemaking proceedings
for cost increases, delays may be experienced in obtaining the necessary rate
increases and there can be no assurance that the regulatory agencies will
grant rate increases adequate to cover operating and other expenses and debt
service requirements. To meet increasing competition, telephone companies
will have to commit substantial capital, technological and marketing
resources. Telephone usage, and therefore revenues, could also be adversely
affected by any sustained economic recession. New technology, such as
cellular service and fiber optics, will require additional capital outlays.
The uncertain outcomes of future labor agreements may also have a negative
impact on the telephone companies. Each of these problems could adversely
affect the ability of the telephone company issuers of any Bonds in a
portfolio to make payments of principal and interest on their Bonds.
Zero Coupon U.S. Treasury Obligations
Certain of the Bonds may be "zero coupon" U.S. Treasury obligations. See
footnote (6) in "Notes to Portfolios." Zero coupon bonds are purchased at a
deep discount because the buyer receives only the right to receive a final
payment at the maturity of the bond and does not receive any periodic
interest payments. The effect of owning deep discount bonds which do not make
current interest payments (such as the zero coupon bonds) is that a fixed
yield is earned not only on the original investment but also, in effect, on
all discount earned during the life of such 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.
INSURANCE ON THE BONDS
All Bonds (other than U.S. Treasury obligations, if any) are insured as to
the scheduled payment of interest and principal either by the issuer of the
Bonds or by the Sponsor under a financial guaranty insurance policy obtained
from MBIA Insurance Corporation ("MBIA Corporation"). See "Portfolio" and the
Notes thereto. The premium for each such insurance policy has been paid in
advance by such issuer or the Sponsor and each such policy is non-cancelable
and will remain in force so long as the Bonds are outstanding and MBIA
Corporation remains in business. No premiums for such insurance are paid by a
Trust. If MBIA Corporation is unable to meet its obligations under its policy
or if the rating assigned to the claims-paying ability of MBIA Corporation
deteriorates, no other insurer has any obligation to insure any issue
adversely affected by either of these events.
The aforementioned insurance guarantees the scheduled payment of principal
and interest on all of the Bonds in each Trust except for any U.S. Treasury
obligations. It does not guarantee the market value of the Bonds or the value
of the Units. This insurance is effective so long as the Bond is outstanding,
whether or not held by a Trust. Therefore, any such insurance may be
considered to represent an element of market value in regard to the Bonds,
but the exact effect, if any, of this insurance on such market value cannot
be predicted.
MBIA Corporation is the principal operating subsidiary of MBIA, Inc., a New
York Stock Exchange listed company. MBIA, Inc. is not obligated to pay the
debts of or claims against MBIA Corporation. MBIA Corporation is domiciled in
the State of New York and licensed to do business in and subject to
regulation under the laws of all 50 states, the District of Columbia, the
Commonwealth of the Northern Mariana Islands, the Commonwealth of Puerto
INSURED CORPORATE SERIES IC-7
<PAGE>
Rico, the Virgin Islands of the United States and the Territory of Guam. MBIA
Corporation has two European branches, one in the Republic of France and the
other in the Kingdom of Spain. New York has laws prescribing minimum capital
requirements, limiting classes and concentrations of investments and
requiring the approval of policy rates and forms. State laws also regulate
the amount of both the aggregate and individual risks that may be insured,
the payment of dividends by MBIA Corporation, changes in control and
transactions among affiliates. Additionally, MBIA Corporation is required to
maintain contingency reserves on its liabilities in certain amounts and for
certain periods of time.
As of December 31, 1996, MBIA Corporation had admitted assets of $4.4 billion
(audited), total liabilities of $3.0 billion (audited), and total capital and
surplus of $1.4 billion (audited) determined in accordance with statutory
accounting practices prescribed or permitted by insurance regulatory
authorities. As of December 31, 1995, MBIA Corporation had admitted assets of
$3.8 billion (audited), total liabilities of $2.5 billion (Audited), and
total capital and surplus of $1.3 billion (audited) determined in accordance
with statutory accounting practices prescribed or permitted by insurance
regulatory authorities. Standard & Poor's has rated the claims paying ability
of MBIA Corporation "AAA." Copies of MBIA Corporation's financial statements
prepared in accordance with statutory accounting practices are available from
MBIA Corporation. The address of MBIA Corporation is 113 King Street, Armonk,
New York, 10504.
Moody's Investors Service rates all bond issues insured by MBIA Corporation
"Aaa" and short term loans "MIG 1," both designated to be of the highest
quality. Standard & Poor's rates all new issues insured by MBIA Corporation
"AAA."
Bonds for which insurance has been obtained by the issuer thereof or by the
Sponsor from MBIA Corporation may or may not have a higher yield than
uninsured bonds rated "AAA" by Standard & Poor's or "Aaa" by Moody's
Investors Service, Inc. In selecting Bonds, the Sponsor has applied the
criteria hereinbefore described.
FEDERAL TAX STATUS
For purposes of the following discussions and opinions, it is assumed that
interest on each of the Bonds is included in gross income for Federal income
tax purposes. In the opinion of Chapman and Cutler, special counsel for the
Sponsor, under existing law:
Each Trust is not an association taxable as a corporation for United States
Federal income tax purposes.
Each Unitholder will be considered the owner of a pro rata portion of each of
the Trust assets for Federal income tax purposes under Subpart E, Subchapter
J of Chapter 1 of the Internal Revenue Code of 1986 (the "Code"). Each
Unitholder will be considered to have received his pro rata share of income
derived from each Trust asset when such income is considered to be received
by such Trust. Each Unitholder will also be required to include in taxable
income for Federal income tax purposes, original issue discount with respect
to his interest in any Bonds held by a Trust at the same time and in the same
manner as though the Unitholder were the direct owner of such interest.
Each Unitholder will have a taxable event when a Bond is disposed of (whether
by sale, exchange, liquidation, redemption, or payment at maturity) or when
the Unitholder redeems or sells his Units. A Unitholder's tax basis in his
Units will equal his tax basis in his pro rata portion of all the assets of
the Trust. Such basis is determined (before the adjustments described below)
by apportioning the tax basis for the Units among each of the Trust assets,
according to value as of the valuation date nearest the date of acquisition
of the Units. Unitholders must reduce the tax basis of their Units for their
share of accrued interest received, if any, on Bonds delivered after the date
INSURED CORPORATE SERIES IC-8
<PAGE>
the Unitholders 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 sellers) and, consequently, such Unitholders may have an increase in
taxable gain or reduction in capital loss upon the disposition of such Units.
It should be noted that certain legislative proposals have been made which
could effect the calculation of basis for Unitholders holding securities that
are substantially identical to the Bonds. Unitholders should consult their
own tax advisors with regard to calculation of basis. 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, exchange, payment on maturity, redemption
or otherwise), gain or loss is recognized to the Unitholder (subject to
various nonrecognition provisions of the Code). The amount of any such gain
or loss is measured by comparing the Unitholder's pro rata share of the total
proceeds from such disposition with his basis for his fractional interest in
the asset disposed of. The basis of each Unit and of each Bond which was
issued with original issue discount (including the U.S. Treasury obligations)
(or which has market discount) must be increased by the amount of accrued
original issue discount (and market discount, if the Unitholder elects to
include market discount in income as it accrues) and the basis of each Unit
and of each Bond which was purchased by a Trust at a premium must be reduced
by the annual amortization of bond premium which the Unitholder has properly
elected to amortize under Section 171 of the Code. The tax basis reduction
requirements of the Code relating to amortization of bond premium may, under
some circumstances, result in the Unitholder realizing a taxable gain when
his Units are sold or redeemed for an amount equal to or less than his
original cost. The U.S. Treasury obligations held by a Trust are treated as
bonds that were originally issued at an original issue discount provided,
pursuant to a Treasury Regulation (the "Regulation") issued on December 28,
1992, that the amount of original issue discount determined under Section
1286 of the Code is not less than a "de minimis" amount as determined
thereunder (as discussed below under "Original Issue Discount"). Because the
U.S. Treasury obligations represent interests in "stripped" U.S. Treasury
bonds, a Unitholder's initial cost for his pro rata portion of each U.S.
Treasury obligation held by the Trust (determined at the time he acquires his
Units, in the manner described above) shall be treated as its "purchase
price" by the Unitholder. Original issue discount is effectively treated as
interest for Federal income tax purposes, and the amount of original issue
discount in this case is generally the difference between the Bond's purchase
price and its stated redemption price at maturity. A Unitholder will be
required to include in gross income for each taxable year the sum of his
daily portions of original issue discount attributable to the U.S. Treasury
obligations held by a Trust as such original issue discount accrues and will,
in general, be subject to Federal income tax with respect to the total amount
of such original issue discount that accrues for such year even though the
income is not distributed to the Unitholders during such year to the extent
it is not less than a "de minimis" amount as determined under the Regulation.
To the extent the amount of such discount is less than the respective "de
minimis" amount, such discount shall be treated as zero. In general, original
issue discount accrues daily under a constant interest rate method which
takes into account the semi-annual compounding of accrued interest. In the
case of the U.S. Treasury obligations, this method will generally result in
an increasing amount of income to the Unitholders each year. Unitholders
should consult their tax advisers regarding the Federal income tax
consequences and accretion of original issue discount.
Limitations on Deductibility of Trust expenses by Unitholders. Each
Unitholder's pro rata share of each expense paid by each Trust is deductible
by the Unitholder to the same extent as though the expense had been paid
directly by him. It should be noted that as a result of the Tax Reform Act of
1986 (the "Act"), certain miscellaneous itemized deductions, such as
investment expenses, tax return preparation fees and employee business
expenses will be deductible by an individual only to the extent they exceed
INSURED CORPORATE SERIES IC-9
<PAGE>
2% of such individual's adjusted gross income (similar limitations also apply
to estates and trusts). Unitholders may be required to treat some or all of
the expenses paid by each Trust as miscellaneous itemized deductions subject
to this limitation.
Premium. If a Unitholder's tax basis of his pro rata portion in any Bonds
held by a Trust exceeds the amount payable by the issuer of the Bond with
respect to such pro rata interest upon the maturity of the Bond, such excess
would be considered premium which may be amortized by the Unitholder at the
Unitholder's election as provided in Section 171 of the Code. Unitholders
should consult their tax advisers regarding whether such election should be
made and the manner of amortizing premium.
Original Issue Discount. Certain of the Bonds of a Trust may have been
acquired with "original issue discount." In the case of any Bonds of the
Trust acquired with "original issue discount" that exceeds a "de minimis"
amount as specified in the Code or in the case of the U.S. Treasury
obligations as specified in the Regulation, such discount is includable in
taxable income of the Unitholders on an accrual basis computed daily, without
regard to when payments of interest on such Bonds are received. The Code
provides a complex set of rules regarding the accrual of original issue
discount. These rules provide that original issue discount generally accrues
on the basis of a constant compound interest rate over the term of the Bonds.
Unitholders should consult their tax advisers as to the amount of original
issue discount which accrues.
Special original issue discount rules apply if the purchase price of the Bond
by a Trust exceeds its original issue price plus the amount of original issue
discount which would have previously accrued based upon its issue price (its
"adjusted issue price"). Similarly these special rules would apply to a
Unitholder if the tax basis of his pro rata portion of a Bond issued with
original issue discount exceeds his pro rata portion of its adjusted issue
price. Unitholders should also consult their tax advisers regarding these
special rules.
It is possible that a Corporate Bond that has been issued at an original
issue discount may be characterized as a "high-yield discount obligation"
within the meaning of Section 163(e)(5) of the Code. To the extent that such
an obligation is issued at a yield in excess of six percentage points over
the applicable Federal rate, a portion of the original issue discount on such
obligation will be characterized as a distribution on stock (e.g., dividends)
for purposes of the dividends received deduction which is available to
certain corporations with respect to certain dividends received by such
corporation.
Market Discount. If a Unitholder's tax basis in his pro rata portion of Bonds
is less than the allocable portion of such Bond's stated redemption price at
maturity (or, if issued with original issue discount, the allocable portion
of its "revised issue price"), such difference will constitute market
discount unless the amount of market discount is "de minimis" as specified in
the Code. Market discount accrues daily computed on a straight line basis,
unless the Unitholder elects to calculate accrued market discount under a
constant yield method. The market discount rules do not apply to the U.S.
Treasury obligations because they are stripped debt instruments subject to
special original issue discount rules as discussed above. Unitholders should
consult their tax advisers regarding whether such election should be made and
as to the amount of market discount which accrues.
Accrued market discount is generally includable in taxable income to the
Unitholders as ordinary income for Federal tax purposes upon the receipt of
serial principal payments on the Bonds, on the sale, maturity or disposition
of such Bonds by each Trust, and on the sale by a Unitholder of Units, unless
a Unitholder elects to include the accrued market discount in taxable income
as such discount accrues. If a Unitholder does not elect to annually include
INSURED CORPORATE SERIES IC-10
<PAGE>
accrued market discount in taxable income as it accrues, deductions for any
interest expense incurred by the Unitholder which is incurred to purchase or
carry his Units will be reduced by such accrued market discount. In general,
the portion of any interest expense which was not currently deductible would
ultimately be deductible when the accrued market discount is included in
income. Unitholders should consult their tax advisers regarding whether an
election should be made to include market discount in income as it accrues
and as to the amount of interest expense which may not be currently
deductible.
Computation of the Unitholder's Tax Basis. The tax basis of a Unitholder with
respect to his interest in a Bond is increased by the amount of original
issue discount (and market discount, if the Unitholder elects to include
market discount, if any, on the Bonds held by each Trust in income as it
accrues) thereon properly included in the Unitholder's gross income as
determined for Federal income tax purposes and reduced by the amount of any
amortized premium which the Unitholder has properly elected to amortize under
Section 171 of the Code. A Unitholder's tax basis in his Units will equal his
tax basis in his pro rata portion of all of the assets of each Trust.
Recognition of Taxable Gain or Loss Upon Disposition of Obligations by the
Trust or Disposition of Units. A Unitholder will recognize taxable capital
gain (or loss) when all or part of his pro rata interest in a Bond is
disposed of in a taxable transaction for an amount greater (or less) than his
tax basis therefor, subject to various non-recognition provisions of the
Code. As previously discussed, gain realized on the disposition of the
interest of a Unitholder in any Bond deemed to have been acquired with market
discount will be treated as ordinary income to the extent the gain does not
exceed the amount of accrued market discount not previously taken into
income. Any capital gain or loss arising from the disposition of a Bond by
each Trust or the disposition of Units by a Unitholder generally will be
short-term capital gain or loss unless the Unitholder has held his Units for
more than one year in which case such capital gain or loss will be long-term.
For taxpayers other than corporations, net capital gains (which is defined as
net long-term capital gain over short-term capital loss for a taxable year)
are subject to a maximum marginal stated tax rate of 28 percent. However, it
should be noted that legislative proposals are introduced from time to time
that affect tax rates and could affect relative differences at which ordinary
income and capital gains are taxed. The tax basis reduction requirements of
the Code relating to amortization of bond premium may under some
circumstances, result in the Unitholder realizing taxable gain when his Units
are sold or redeemed for an amount equal to or less than his original cost.
If the Unitholder disposes of a Unit, he is deemed thereby to have disposed
of his entire pro rata interest in all Trust assets including his pro rata
portion of all of the Bonds represented by the Unit. This may result in a
portion of the gain, if any, on such sale being taxable as ordinary income
under the market discount rules (assuming no election was made by the
Unitholder to include market discount in income as it accrues) as previously
discussed.
"The Revenue Reconciliation Act of 1993" (the "Tax Act") raised tax rates on
ordinary income while capital gains would remain subject to a 28 percent
maximum stated rate for taxpayers other than corporations. Because some of
all capital gains are taxed at a comparatively lower rate under the Tax Act,
the Tax Act includes a provision that recharacterizes capital gains as
ordinary income in the case of certain financial transactions that are
"conversion transactions" effective for transactions entered into after April
30, 1993. Unitholders and prospective investors should consult with their tax
advisers regarding the potential effect of this provision on their investment
in Units. 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 purposes of recognition of gain (but not
INSURED CORPORATE SERIES IC-11
<PAGE>
loss). Unitholders should consult their own tax advisors with regard to any
such constructive sales rules.
Foreign Investors. A Unitholder of a Trust who is a foreign investor (i.e.,
an investor other than a U.S. citizen or resident or a U.S. corporation,
partnership, estate or trust) will not be subject to United States federal
income taxes, including withholding taxes, on interest income (including any
original issue discount) on, or any gain from the sale or other disposition
of, his pro rata interest in any Bond or the sale of his Units provided that
all of the following conditions are met: (i) the interest income or gain is
not effectively connected with the conduct by the foreign investor of a trade
or business within the United States, (ii) if the interest is United States
source income (which is the case for most securities issued by United States
issuers), the Bond is issued after July 18, 1984 (which is the case for each
Bond held by the Trust), the foreign investor does not own, directly or
indirectly, 10% or more of the total combined voting power of all classes of
voting stock of the issuer of the Bond and the foreign investor is not a
controlled foreign corporation related (within the meaning of Section
864(d)(4) of the Code) to the issuer of the Bond, or (iii) with respect to
any gain, the foreign investor (if an individual) is not present in the
United States for 183 days or more during his or her taxable year and (iv)
the foreign investor provides all certification which may be required of his
status (foreign investors may contact the Sponsor to obtain a Form W-8 which
must be filed with the Trustee and refiled every three calendar years
thereafter). Foreign investors should consult their tax advisers with respect
to United States tax consequences of ownership of Units.
It should be noted that the Tax Act includes a provision which eliminates the
exemption from United States taxation, including withholding taxes, for
certain "contingent interest." The provision applies to interest received
after December 31, 1993. No opinion is expressed herein regarding the
potential applicability of this provision and whether United States taxation
or withholding taxes could be imposed with respect to income derived from the
Units as a result thereof. Unitholders and prospective investors should
consult with their tax advisers regarding the potential effect of this
provision on their investment in Units.
General. Each Unitholder (other than a foreign investor who has properly
provided the certifications described in the preceding paragraph) will be
requested to provide the Unitholder's taxpayer identification number to the
Trustee and to certify that the Unitholder has not been notified that
payments to the Unitholder are subject to back-up withholding. If the proper
taxpayer identification number and appropriate certification are not provided
when requested, distributions by each Trust to such Unitholder including
amounts received upon the redemption of the Units will be subject to back-up
withholding.
The foregoing discussion relates only to United Stated Federal income taxes;
Unitholders may be subject to state and local taxation in other jurisdictions
(including a foreign investor's country of residence). Unitholders should
consult their tax advisers regarding potential state, local, or foreign
taxation with respect to the Units.
TAX REPORTING AND REALLOCATION
Because each Trust receives interest and makes monthly distributions based
upon such Trust's expected total collections of interest and any anticipated
expenses, certain tax reporting consequences may arise. Each Trust is
required to report Unitholder information to the Internal Revenue Service
("IRS"), based upon the actual collection of interest by such Trust on the
securities in such Trust, without regard to such Trust's expenses or to such
Trust's payments to Unitholders during the year. If distributions to
INSURED CORPORATE SERIES IC-12
<PAGE>
Unitholders exceed interest collected, the difference will be reported as a
return of principal which will reduce a Unitholder's cost basis in its Units
(and its pro rata interest in the securities in the Trust). A Unitholder must
include in taxable income the amount of income reported by a Trust to the IRS
regardless of the amount distributed to such Unitholder. If a Unitholder's
share of taxable income exceeds income distributions made by a Trust to such
Unitholder, such excess is in all likelihood attributable to the payment of
miscellaneous expenses of such Trust which will not be deductible by an
individual Unitholder as an itemized deduction except to the extent that the
total amount of certain itemized deductions, such as investment expenses
(which would include the Unitholder's share of Trust expenses), tax return
preparation fees and employee business expenses, exceeds 2% of such
Unitholder's adjusted gross income. Alternatively, in certain cases, such
excess may represent an increase in the Unitholder's tax basis in the Units
owned. Investors with questions regarding these issues should consult with
their tax advisers.
ESTIMATED CASH FLOWS TO UNITHOLDERS
The table below sets forth the per Unit estimated distributions of interest
and principal to Unitholders. The tables assume no changes in Trust expenses,
no redemptions or sales of the underlying Bonds prior to maturity and the
receipt of all principal due upon maturity. To the extent the foregoing
assumptions change actual distributions will vary.
INSURED CORPORATE SERIES 11
<TABLE>
<CAPTION>
Monthly
- ------- Estimated Estimated Estimated
Interest Principal Total
Dates Distribution Distribution Distribution
--------------------------------------- ------------ ------------ ------------
<S> <C> <C> <C>
June 15, 1997 $.00590 $ .00590
July 15, 1997 to August 15, 2022 $.05897 $ .05897
September 15, 2022 $.05897 $ .31250 $ .37147
October 15, 2022 to June 15, 2023 $.05903 $ .05903
July 15, 2023 $.05903 $1.25000 $1.30903
August 15, 2023 $.05183 $1.87500 $1.92683
September 15, 2023 to February 15, 2024 $.03972 $ .03972
March 15, 2024 $.03972 $ .93750 $ .97722
April 15, 2024 to July 15, 2025 $.03424 $ .03424
August 15, 2025 $.03424 $2.50000 $2.53424
September 15, 2025 to February 15, 2033 $.01884 $ .01884
March 15, 2033 $.01884 $1.25000 $1.26884
April 15, 2033 to June 15, 2033 $.00045 $ .00045
July 15, 2033 $.00045 $1.87500 $1.87545
</TABLE>
INSURED CORPORATE SERIES IC-13
<PAGE>
THE GNMA PORTFOLIOS
THE TRUST PORTFOLIO
The purpose and objective of GNMA Portfolio Series 8 and GNMA Portfolio
Series 9 is to provide investors with an appropriate vehicle to obtain safety
of capital and monthly distributions of interest and principal through
investment in a fixed portfolio primarily consisting of Ginnie Maes backed by
the full faith and credit of the United States.
In selecting Securities for deposit in the GNMA Portfolios, the following
factors, among others, were considered by the Sponsor: (i) the types of such
obligations available; (ii) the prices and yields of such obligations
relative to other comparable obligations, including the extent to which such
obligations are traded at a premium or at a discount from par; and (iii) the
maturities of such obligations.
Because regular payments of principal are to be received and certain of the
Securities from time to time may be redeemed or will mature in accordance
with their terms or may be sold under certain circumstances described herein,
the Trusts referred to herein might not retain their present size and
composition.
GNMA PORTFOLIOS GNMA-1
<PAGE>
GNMA PORTFOLIO SERIES 8 PORTFOLIO
AS OF THE INITIAL DATE OF DEPOSIT: MAY 22, 1997
Government National Mortgage Association, Modified Pass-Through
Mortgage-Backed Securities*
<TABLE>
<CAPTION>
Range of Cost of
Face Stated Securities
Amount Issuer Coupon Maturities(1) to Trust(2)
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 50,000 GNMA 7.000% 2012 to 2013 $ 49,452
150,000 GNMA 6.500% 2012 to 2013 145,429
------- -------
$ 200,000 $194,881
======= =======
</TABLE>
- --------------------
See "Notes to Portfolio."
GNMA PORTFOLIO SERIES 9 PORTFOLIO
AS OF THE INITIAL DATE OF DEPOSIT: MAY 22, 1997
Government National Mortgage Association, Modified Pass-Through
Mortgage-Backed Securities*
<TABLE>
<CAPTION>
Range of Cost of
Face Stated Securities
Amount Issuer Coupon Maturities(1) to Trust(2)
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 50,000 GNMA 8.000% 2026 to 2028 $ 50,815
150,000 GNMA 7.000% 2026 to 2028 145,382
------- -------
$ 200,000 $196,197
======= =======
</TABLE>
- --------------------
See "Notes to Portfolio."
GNMA PORTFOLIOS GNMA-2
<PAGE>
NOTES TO PORTFOLIOS
(1) The principal amount of Securities listed as having the range of
maturities shown is an aggregate of individual Securities having varying
ranges of maturities within that shown. They are listed as one category
of Securities with a single range of maturities because of current market
conditions that accord no difference in price among the Securities
grouped together on the basis of the difference in their maturity ranges.
At some time in the future, however, the difference in maturity ranges
could affect the market value of the individual Securities.
(2) Some Securities may be represented by contracts to purchase such
Securities. During the initial offering period, evaluations of Securities
are made on the basis of current offering side evaluations of the
Securities. The aggregate offering price is greater than the aggregate
bid price of the Securities, which is the basis on which Redemption
Prices will be determined for purposes of redemption of Units after the
initial offering period. Other information regarding the Securities in
the Trusts, at the opening of business on the Initial Date of Deposit, is
as follows:
<TABLE>
<CAPTION>
GNMA GNMA
Portfolio Portfolio
Series 8 Series 9
----------- -----------
<S> <C> <C>
Cost of Securities to Sponsor $ 195,828 $ 196,219
Profit or (Loss) to Sponsor $ (947) $ (55)
Annual Interest Income to Trust $ 13,250 $ 14,500
Bid Side Value of Securities $ 194,232 $ 194,938
</TABLE>
* In addition to the information as to the GNMA modified pass-through
mortgage-backed Securities set forth under "Portfolios," the Trustee will
furnish Unitholders a statement listing the name of issuer, pool number,
interest rate, maturity date and principal amount for each such Security
in the portfolio upon written request.
GNMA PORTFOLIOS GNMA-3
<PAGE>
RISK FACTORS
Each Trust is a unit investment trust whose objectives are to obtain safety
of capital and to provide current monthly distributions of interest and
principal through investment in a fixed portfolio initially consisting
primarily of contracts to purchase taxable mortgage-backed securities of the
modified pass-through type ("Ginnie Maes" or "Securities"), including so-
called "Ginnie Mae II's," which involve larger pools of mortgages and which
have a central paying agent, fully guaranteed as to principal and interest by
the Government National Mortgage Association ("GNMA"). All of the Ginnie Maes
in the Trusts consist of pools of long term mortgages on 1- to 4-family
dwellings. Certain GNMA Portfolio Series may also include certain zero coupon
U.S. Treasury Obligations.
An investment in Units of a Trust should be made with an understanding of the
risks which an investment in fixed rate long term debt obligations may
entail, including the risk that the value of the portfolio and hence of the
Units will decline with increases in interest rates. The value of the
underlying Securities will fluctuate inversely with changes in interest
rates. In addition, the potential for appreciation of the underlying
Securities, which might otherwise be expected to occur as a result of a
decline in interest rates, may be limited or negated by increased principal
prepayments in respect of the underlying mortgages. The high inflation of
prior years, together with the fiscal measures adopted to attempt to deal
with it, have resulted in wide fluctuations in interest rates and, thus, in
the value of fixed rate long term debt obligations generally. The Sponsor
cannot predict whether such fluctuations will continue in the future.
The Securities in the Trusts were chosen in part on the basis of their
respective stated maturity dates. The ranges of maturity dates of each of the
Securities contained in the Trusts are shown on the "Portfolios." The stated
mandatory termination date of the GNMA Portfolios are set forth under
"Essential Information." See "Life of the Securities and of the GNMA Trusts"
below.
The Trusts may be appropriate mediums for investors who desire to participate
in a portfolio of taxable fixed income securities offering the safety of
capital provided by securities backed by the full faith and credit of the
United States but who do not wish to invest the minimum amount which is
required for a direct investment in GNMA guaranteed securities. The portfolio
of each GNMA Trust initially consists of contracts to purchase Ginnie Maes,
including so-called Ginnie Mae II's, fully guaranteed as to payments of
principal and interest by the Government National Mortgage Association.
Each group of Ginnie Maes described herein as having a specified range of
maturities includes individual mortgage-backed securities which have varying
ranges of maturities within each range specified under "Essential
Information." Each such group of Ginnie Maes is described as one category of
securities because current market conditions accord no difference in price
among the individual Ginnie Mae securities within such group on the basis of
the difference in the maturity dates of each Ginnie Mae. As long as this
market condition prevails, a purchase of Ginnie Maes with the same coupon
rate and a maturity date within the range mentioned above will be considered
an acquisition of the same Security. In the future, however, the difference
in maturity ranges could affect the market value of the individual Ginnie
Maes. At such time, any additional purchases by a Trust will take into
account the maturities of the individual Securities.
The Trusts may contain Securities which were acquired at a market discount.
Such Securities trade at less than par value because the interest rates
thereon are lower than interest rates on comparable debt securities being
issued at currently prevailing interest rates. If such interest rates for
newly issued and otherwise comparable securities increase, the market
discount of previously issued securities will increase and if such interest
GNMA PORTFOLIOS GNMA-4
<PAGE>
rates for newly issued comparable securities decline, the market discount of
previously issued securities will decrease, other things being equal. Market
discount attributable to interest rate changes does not indicate a lack of
market confidence in the issue.
Unitholders will be "at risk" with respect to such Securities (i.e., may
derive either gain or loss from fluctuations in the evaluation of the
Securities) from the date they commit for Units. See "General Information--
Interest, Estimated Current Return and Estimated Long-Term Return."
The mortgages underlying a Ginnie Mae may be prepaid at any time without
penalty. A lower or higher return on Units may occur depending on whether the
price at which the respective Ginnie Maes were acquired by a Trust is lower
or higher than par (which represents the price at which such Ginnie Maes will
be redeemed upon prepayment). Redemption of premium Ginnie Maes at par
pursuant to prepayments of mortgages will operate to lower the current return
on Units of such Series outstanding at that time since premium Ginnie Maes
normally carry higher interest coupons than par or discount Ginnie Maes. If
mortgage rates decline in the future, such prepayments may occur with
increasing frequency because, among other reasons, mortgagors may be able to
refinance their outstanding mortgages at lower interest rates. See "Life of
the Securities and of the GNMA Trusts."
Set forth below is a brief description of the current method of origination
of Ginnie Maes; the nature of such securities, including the guaranty of
GNMA; the basis of selection and acquisition of the Ginnie Maes included in
the Trusts; and the expected life of the Ginnie Maes and of the Trusts. The
"Portfolios" contain information concerning the coupon rate and range of
stated maturities of the Ginnie Maes in the Trusts.
Origination. The Ginnie Maes included in each Trust are backed by the
indebtedness secured by underlying mortgage pools of long-term mortgages on
1- to 4-family dwellings. The pool of mortgages which is to underlie a
particular new issue of Ginnie Maes is assembled by the proposed issuer of
such Ginnie Maes. The issuer is typically a mortgage banking firm, and in
every instance must be a mortgagee approved by and in good standing with the
Federal Housing Administration ("FHA"). In addition, GNMA imposes its own
criteria on the eligibility of issuers, including a net worth requirement.
The mortgages which are to comprise a new Ginnie Mae pool may have been
originated by the issuer itself in its capacity as a mortgage lender or may
be acquired by the issuer from a third party. Such third party may be another
mortgage banker, a banking institution, the Veterans Administration ("VA")
(which in certain instances acts as a direct lender and thus originates its
own mortgages) or one of several governmental agencies. All mortgages in any
given pool will be insured under the National Housing Act, as amended ("FHA-
insured") or Title V of the Housing Act of 1949 ("FMHA-insured") or
guaranteed under the Servicemen's Readjustment Act of 1944, as amended, or
Chapter 37 of Title 38, U.S.C. ("VA guaranteed"). Such mortgages will have a
date for the first scheduled monthly payment of principal that is not more
than one year prior to the date on which GNMA issues its guaranty commitment
as described below, will have comparable interest rates and maturity dates,
and will meet additional criteria of GNMA. All mortgages in the pools backing
the Ginnie Maes contained in the GNMA Portfolio Series are mortgages on 1- to
4-family dwellings. In general, the mortgages in these pools provide for
monthly payments over the life of the mortgage (aside from prepayments)
designed to repay the principal of the mortgage over such period, together
with interest at the fixed rate of the unpaid balance.
To obtain GNMA approval of a new pool of mortgages, the issuer will file with
GNMA an application containing information concerning itself, describing
generally the pooled mortgages, and requesting that GNMA approve the issue
and issue its commitment (subject to GNMA's satisfaction with the mortgage
documents and other relevant documentation) to guarantee the timely payment
of principal of and interest on the Ginnie Maes to be issued by the issuer.
If the application is in order, GNMA will issue its commitment and will
assign a GNMA pool number to the pool. Upon completion of the required
GNMA PORTFOLIOS GNMA-5
<PAGE>
documentation (including detained information as to the underlying mortgages,
a custodial agreement with a Federal or state regulated financial institution
satisfactory to GNMA pursuant to which the underlying mortgages will be held
in safekeeping, and a detailed guaranty agreement between GNMA and the
issuer) the issuance of the Ginnie Maes is permitted. When the Ginnie Maes
are issued, GNMA will endorse its guaranty thereon. The aggregate principal
amount of Ginnie Maes issued will be equal to the then aggregate unpaid
principal balances of the pooled mortgages. The interest rate borne by the
Ginnie Maes is currently fixed at 1/2 of 1% below the interest rate of the
Pooled 1 - to 4-family mortgages, the differential being applied to the
payment of servicing and custodial charges as well as GNMA's guaranty fee.
Ginnie Mae II's consist of jumbo pools of mortgages consisting of pools of
mortgages from more than one issuer. The major advantage of Ginnie Mae II's
lies in the fact that a central paying agent sends one check to the holder on
the required payment date. This greatly simplifies the current procedure of
collecting distributions from each issuer of a Ginnie Mae, since such
distributions are often received late.
Nature of Ginnie Maes and GNMA Guaranty. All of the Ginnie Maes in the GNMA
Portfolio Series, including the Ginnie Mae II's, are of the "modified pass-
through" type, i.e., they provide for timely monthly payments to the
registered holders thereof (including a GNMA Portfolio) of a pro rata share
of the scheduled principal payments on the underlying mortgages, whether or
not collected by the issuers. Such monthly payments will also include, on a
pro rata basis, any prepayments of principal of such mortgages received and
interest (net of the servicing and other charges described above) on the
aggregate unpaid principal balance of such Ginnie Maes, whether or not the
interest on the underlying mortgages has been collected by the issuers.
The Ginnie Maes in the GNMA Portfolio Series are guaranteed as to timely
payment of principal and interest by GNMA. Funds received by the issuers on
account of the mortgages backing the Ginnie Maes in the GNMA Portfolio Series
are intended to be sufficient to make the required payments of principal of
and interest on such Ginnie Maes but, if such funds are insufficient for that
purpose, the guaranty agreements between the issuers and GNMA require the
issuers to make advances sufficient for such payments. If the issuers fail to
make such payments, GNMA will do so.
GNMA is authorized by Section 306(g) of Title III of the National Housing Act
to guarantee the timely payment of principal of and interest on securities
which are based on or backed by a trust for pool composed of mortgages
insured by FHA, the Farmers' Home Administration ("FMHA") or guaranteed by
the VA. Section 306(g) provides further that the full faith and credit of the
United States is pledged to the payment of all amounts which may be required
to be paid under any guaranty under such subsection. An opinion of an
Assistant Attorney General of the United States, dated December 9, 1969,
states that such guaranties "constitute general obligations of the United
States backed by its full faith and credit."* GNMA is empowered to borrow
from the United States Treasury to the extent necessary to make any payments
of principal and interest required under such guaranties. Ginnie Maes are
backed by the aggregate indebtedness secured by the underlying FHA-insured,
FMHA-insured or VA-guaranteed mortgages and, except to the extent of funds
received by the issuers on account of such mortgages, Ginnie Maes do not
constitute a liability of nor evidence any recourse against such issuers, but
recourse thereon is solely against GNMA. Holders of Ginnie Maes (such as the
Trusts) have no security interest in or lien on the underlying mortgages.
The GNMA guaranties referred to herein relate only to payment of principal of
and interest on the Ginnie Maes in the portfolio and not the Units offered
hereby.
* Any statement in this Prospectus that a particular Security is backed by
the full faith and credit of the United States is based upon the opinion of
an Assistant Attorney General of the United States and should be so construed.
GNMA PORTFOLIOS GNMA-6
<PAGE>
Life of the Securities and of the GNMA Trusts. Monthly payments of principal
will be made, and additional prepayments of principal may be made, to the
GNMA Trusts in respect of the mortgages underlying the Ginnie Maes in each
GNMA Portfolio. All of the mortgages in the pools relating to the Ginnie Maes
in each GNMA Portfolio are subject to prepayment without any significant
premium or penalty at the option of the mortgagors. It has been the
experience of the mortgage industry that the average life of mortgages
comparable to those contained in the GNMA Portfolios, owing to prepayments,
refinancings and payments from foreclosures is considerably less than the
stated maturity for each series set forth in "Essential Information."
In the mid 1970's, published tables for Ginnie Maes utilized a 12 year
average life assumption for Ginnie Mae pools of 26-30 year mortgages on 1- to
4-family dwellings. This assumption was derived from the FHA experience
relating to prepayments on such mortgages during the period from the mid
1950's to the mid 1970's. This 12 year average life assumption was calculated
in respect of a period during which mortgage lending rates were fairly
stable. That assumption is probably no longer an accurate measure of the life
of Ginnie Maes or their underlying single family mortgage pools. However,
current yield tables, published in 1981, still utilize the 12 year average
life assumption and Ginnie Maes continue to be traded based on this
assumption. Recently it has been observed that mortgages issued at high
interest rates have experienced accelerated prepayment rates which would
indicate a shorter average life than 12 years.
A number of factors, including homeowner's mobility, change in family size
and mortgage market interest rates will affect the average life of the Ginnie
Maes in the Trusts. For example, Ginnie Maes issued during a period of high
interest rates will be backed by a pool of mortgage loans bearing similarly
high rates. In general, during a period of declining interest rates, new
mortgage loans with interest rates lower than those charged during periods of
high rates will become available. To the extent a homeowner has an
outstanding mortgage with a high rate, he may refinance his mortgage at a
lower interest rate or he may rapidly repay his old mortgage. Should this
happen, a Ginnie Mae issued with a high interest rate may experience a rapid
prepayment of principal as the underlying mortgage loans prepay in whole or
in part. Accordingly, there can be no assurance that the prepayment levels
which will be actually realized will conform to the experience of the FHA,
other mortgage lenders or other Ginnie Mae investors. It is not possible to
meaningfully predict prepayment levels regarding the Ginnie Maes in the
Trusts. Therefore, the termination of a Trust might be accelerated as a
result of prepayments made as described herein.
In addition to prepayments as described above, sales of Securities in a Trust
under certain permitted circumstances may result in an accelerated
termination of such Trust. Also, it is possible that, in the absence of a
secondary market for the Units or otherwise, redemptions of Units may occur
in sufficient numbers to reduce a Trust to a size resulting in such
termination. Early termination of a Trust may have important consequences to
the Unitholder; e.g., to the extent that Units were purchased with a view to
an investment of longer duration, the overall investment program of the
investor may require readjustment; or the overall return on investment may be
less or greater than anticipated, depending in part on whether the purchase
price paid for Units represented the payment of an overall premium or a
discount, respectively above or below the stated principal amounts of the
underlying mortgages. In addition, a capital gain or loss may result for tax
purposes from termination of a Trust.
GNMA PORTFOLIOS GNMA-7
<PAGE>
FEDERAL TAX STATUS
In the opinion of Chapman and Cutler, counsel for the Sponsor, under existing
law:
Each Trust is an association taxable as a corporation under the Internal
Revenue Code of 1986, as amended (the Code') and intends to qualify on a
continuous basis for special federal income tax treatment as a regulated
investment company" under the Code. If a Trust so qualifies and timely
distributes to Unitholders 90% or more of its taxable income (without regard
to its net capital gain, i.e., the excess of its long-term capital gain over
its net short-term capital loss), it will not be subject to federal income
tax on the portion of its taxable income (including any net capital gain)
that it distributes to Unitholders. In addition, to the extent a Trust
distributes to Unitholders at least 98% of its taxable income (including any
net capital gain), it will not be subject to the 4% excise tax on certain
undistributed income of "regulated investment companies." Each Trust intends
to timely distribute its taxable income (including any net capital gains) to
avoid the imposition of federal income tax or the excise tax. Distributions
of the entire net investment income of each Trust are required by the
Indenture.
Each Trust intends to file its federal income tax return on a calendar year
basis. In any taxable year of a Trust, the distributions of its income, other
than distributions which are designated as capital gains dividends, will, to
the extent of the earnings and profits of such Trust, constitute dividends
for Federal income tax purposes which are taxable as ordinary income to
Unitholders. To the extent that the distributions to a Unitholder in any year
exceed a Trust's current and accumulated earnings and profits, they will be
treated as a return of capital and will reduce the Unitholder's basis in his
Units, and to the extent that they exceed his basis, will be treated as a
gain from the sale of his Units as discussed below. Distributions from each
Trust will not be eligible for the 70% dividends received deduction for
corporations. Although distributions generally will be treated as distributed
when paid, distributions declared in October, November or December, payable
to Unitholders of record on a specified date in one of those months and paid
during January of the following year will be treated as having been
distributed by each Trust (and received by the Unitholders) on December 31 of
the year such distributions are declared.
Under the Code, certain miscellaneous itemized deductions, such as investment
expenses, tax return preparation fees and employee business expenses, will be
deductible by individuals only to the extent they exceed 2% of adjusted gross
income. Miscellaneous itemized deductions subject to this limitation under
present law do not include expenses incurred by a Trust as long as the Units
of such Trust are held by or for 500 or more persons at all times during the
taxable year or another exception is met. In the event the Units of a Trust
are held by fewer than 500 persons, additional taxable income will be
realized by the individual Unitholders in excess of the distributions
received from such Trust.
Distributions of a Trust's net capital gain which a Trust designates as
capital gain dividends will be taxable to Unitholders thereof as long-term
capital gains, regardless of the length of time the Units have been held by a
Unitholder. However, if a Unitholder receives a long-term capital gain
dividend (or is allocated to a portion of a Trust's undistributed long-term
capital gain) and sells his Units at a loss prior to holding them for 6
months, such loss will be recharacterized as long-term capital loss to the
extent of such long-term capital gain received as a dividend or allocated to
a Unitholder. Distributions in partial liquidation, reflecting the proceeds
of prepayments, redemptions, maturities (including monthly. mortgage payments
of principal) or sales of Securities from a Trust (exclusive of net capital
gain) will not be taxable to Unitholders of such Trust to the extent that
they represent a return of capital for tax purposes. The portion of
distributions which represents a return of capital will, however, reduce a
Unitholder's basis in his Units, and to the extent they exceed the basis of
GNMA PORTFOLIOS GNMA-8
<PAGE>
his Units will be taxable as a capital gain. A Unitholder may recognize gain
or loss when his Units are sold or redeemed. Such gain or loss will
constitute either a long-term or short-term capital gain or loss depending
upon the length of time the Unitholder has held his Units. Any loss of Units
held six months or less will be treated as long-term capital loss to the
extent of any long-term capital gains dividends received (or deemed to have
been received) by the Unitholder with respect to such Units. For taxpayers
other than corporations, net capital gains are presently subject to a maximum
stated marginal rate of 28%. However, it should be noted that legislative
proposals are introduced from time to time that affect tax rates and could
affect relative differences at which ordinary income and capital gains are
taxed. A capital loss is long-term if the asset is held for more than one
year and short-term if held for one year or less.
The Revenue Reconciliation Act of 1993 (the "Act") raised tax rates on
ordinary income while capital gains remain subject to a 28% maximum stated
rate for taxpayers other than corporations. Because some or all capital gains
are taxed at a comparatively lower rate under the Act, the Act includes a
provision that recharacterizes capital gains as ordinary income in the case
of certain financial transactions that are "conversion transactions"
effective for transactions entered into after April 30, 1993. Unitholders and
prospective investors should consult with their tax advisers regarding the
potential effect of this provision on their investment in Units.
If a Ginnie Mae has been purchased by a Trust at a market discount (i.e., for
a purchase price less than its stated redemption price at maturity (or if
issued with original issue discount, its "revised issue price")) unless the
amount of market discount is "de minimis" as specified in the Code, each
payment of principal on the Ginnie Mae will generally constitute ordinary
income to a Trust to the extent of any accrued market discount unless a Trust
elects to include market discount in taxable income as it accrues. In the
case of a Ginnie Mae, the amount of market discount that is deemed to accrue
each month shall generally be the amount of discount that bears the same
ratio to the total amount of remaining market discount that the amount of
interest paid during the accrual period (each month) bears to the total
amount of interest remaining to be paid on the Ginnie Mae as of the beginning
of the accrual period.
Each Unitholder of each Trust shall receive an annual statement describing
the tax status of the distributions paid by such Trust.
Each Unitholder will be requested to provide the Unitholder's taxpayer
identification number to the Trustee and to certify that the Unitholder has
not been notified that payments to the Unitholder are subject to back-up
withholding. If the proper taxpayer identification number and appropriate
certification are not provided when requested, distributions by a Trust to
such Unitholder (including amounts received upon the redemption of Units)
will be subject to back-up withholding.
A Unitholder who is a foreign investor (i.e., an investor other than a United
States citizen or resident or a United States corporation, partnership,
estate or trust) should be aware that, generally, subject to applicable tax
treaties, distributions from a Trust which constitute dividends for Federal
income tax purposes (other than dividends which a Trust designates as capital
gain dividends) will be subject to United States income taxes, including
withholding taxes. However, distributions received by a foreign investor from
a Trust that are designated by a Trust as capital gain dividends should not
be subject to United States Federal income taxes, including withholding
taxes, if all of the following conditions are met (i) the capital gain
dividend is not effectively Connected with the conduct by the foreign
investor of a trade or business within the United States, (ii) the foreign
investor (if an individual) is not present in the United States for 183 days
or more during his or her taxable year, and (iii) the foreign investor
provides all certification which may be required of his status (foreign
investors may contact the Sponsor to obtain a Form W-8 which must be filed
with the Trustee and refiled every three years thereafter). Foreign investors
should consult their tax advisors with respect to United States tax
GNMA PORTFOLIOS GNMA-9
<PAGE>
consequences of ownership of Units. Units in a Trust and Trust distributions
may also be subject to state and local taxation and Unitholders should
consult their tax advisors in this regard.
It should be remembered that even if distributions are reinvested, they are
still treated as distributions for income tax purposes.
The foregoing discussion relates only to the federal income tax status of the
Trusts and to the tax treatment of distributions by the Trusts to United
States Unitholders.
ESTIMATE CASH FLOWS TO UNITHOLDERS
The table below sets forth the per Unit estimated monthly distributions of
interest and principal to Unitholders. The table assumes a constant
prepayment rate on the Initial Date of Deposit. The table also assumes no
changes in the current interest rates, no exchanges, redemptions, or sales of
the underlying securities prior to their maturity or expected retirement date
and assumes that the prepayment rate will not change. To the extent the
foregoing assumptions change, actual distributions will vary.
GNMA PORTFOLIO SERIES 8
<TABLE>
MONTHLY
- -------
<CAPTION>
ESTIMATED ESTIMATED ESTIMATED ESTIMATED
INTEREST PRINCIPAL INTEREST PRINCIPAL
DATES DISTRIBUTION DISTRIBUTION DATES DISTRIBUTION DISTRIBUTION
- -------------- ------------ ------------ -------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
June 1997 $0.00537 $0.00000 February 2000 $0.04258 $0.08975
July 1997 0.05368 0.03533 March 2000 0.04210 0.08907
August 1997 0.05349 0.03772 April 2000 0.04162 0.08840
September 1997 0.05329 0.04008 May 2000 0.04115 0.08773
October 1997 0.05308 0.04243 June 2000 0.04068 0.08706
November 1997 0.05285 0.04475 July 2000 0.04021 0.08640
December 1997 0.05261 0.04705 August 2000 0.03975 0.08575
September 2000 0.03929 0.08510
January 1998 0.05236 0.04933 October 2000 0.03883 0.08445
February 1998 0.05209 0.05157 November 2000 0.03838 0.08381
March 1998 0.05181 0.05379 December 2000 0.03793 0.08317
April 1998 0.05152 0.05598
May 1998 0.05122 0.05813 January 2001 0.03748 0.08254
June 1998 0.05091 0.06026 February 2001 0.03704 0.08191
July 1998 0.05059 0.06234 March 2001 0.03660 0.08129
August 1998 0.05025 0.06439 April 2001 0.03616 0.08067
September 1998 0.04991 0.06640 May 2001 0.03573 0.08005
October 1998 0.04955 0.06838 June 2001 0.03530 0.07944
November 1998 0.04918 0.07031 July 2001 0.03487 0.07883
December 1998 0.04881 0.07220 August 2001 0.03445 0.07823
September 2001 0.03403 0.07763
January 1999 0.04842 0.07404 October 2001 0.03361 0.07704
February 1999 0.04802 0.07584 November 2001 0.03320 0.07645
March 1999 0.04762 0.07760 December 2001 0.03279 0.07587
April 1999 0.04720 0.07930
May 1999 0.04677 0.08096 January 2002 0.03238 0.07529
June 1999 0.04634 0.08257 February 2002 0.03198 0.07471
July 1999 0.04590 0.08413 March 2002 0.03158 0.07414
August 1999 0.04544 0.08563 April 2002 0.03118 0.07357
September 1999 0.04498 0.08709 May 2002 0.03078 0.07300
October 1999 0.04452 0.08849 June 2002 0.03039 0.07244
November 1999 0.04404 0.08984 July 2002 0.03000 0.07188
December 1999 0.04356 0.09113 August 2002 0.02962 0.07133
September 2002 0.02923 0.07078
January 2000 0.04307 0.09044 October 2002 0.02885 0.07024
</TABLE>
GNMA PORTFOLIOS GNMA-10
<PAGE>
<TABLE>
<CAPTION>
ESTIMATED ESTIMATED ESTIMATED ESTIMATED
INTEREST PRINCIPAL INTEREST PRINCIPAL
DATES DISTRIBUTION DISTRIBUTION DATES DISTRIBUTION DISTRIBUTION
- -------------- ------------ ------------ -------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
November 2002 $0.02848 $0.06970 September 2007 $0.01097 $0.04410
December 2002 0.02810 0.06916 October 2007 0.01073 0.04374
November 2007 0.01050 0.04339
January 2003 0.02773 0.06863 December 2007 0.01026 0.04304
February 2003 0.02736 0.06810
March 2003 0.02700 0.06757 January 2008 0.01003 0.04269
April 2003 0.02663 0.06705 February 2008 0.00980 0.04235
May 2003 0.02627 0.06653 March 2008 0.00957 0.04201
June 2003 0.02592 0.06602 April 2008 0.00935 0.04167
July 2003 0.02556 0.06550 May 2008 0.00913 0.04133
August 2003 0.02521 0.06500 June 2008 0.00890 0.04100
September 2003 0.02486 0.06449 July 2008 0.00868 0.04066
October 2003 0.02452 0.06399 August 2008 0.00847 0.04033
November 2003 0.02417 0.06350 September 2008 0.00825 0.04001
December 2003 0.02383 0.06300 October 2008 0.00803 0.03968
November 2008 0.00782 0.03936
January 2004 0.02349 0.06251 December 2008 0.00761 0.03904
February 2004 0.02316 0.06203
March 2004 0.02282 0.06154 January 2009 0.00740 0.03872
April 2004 0.02249 0.06107 February 2009 0.00719 0.03840
May 2004 0.02217 0.06059 March 2009 0.00699 0.03809
June 2004 0.02184 0.06012 April 2009 0.00678 0.03778
July 2004 0.02152 0.05965 May 2009 0.00658 0.03747
August 2004 0.02120 0.05918 June 2009 0.00638 0.03716
September 2004 0.02088 0.05872 July 2009 0.00618 0.03686
October 2004 0.02057 0.05826 August 2009 0.00598 0.03655
November 2004 0.02025 0.05780 September 2009 0.00578 0.03625
December 2004 0.01994 0.05735 October 2009 0.00559 0.03595
November 2009 0.00540 0.03566
January 2005 0.01963 0.05690 December 2009 0.00520 0.03536
February 2005 0.01933 0.05646
March 2005 0.01903 0.05601 January 2010 0.00501 0.03507
April 2005 0.01872 0.05557 February 2010 0.00483 0.03478
May 2005 0.01843 0.05514 March 2010 0.00464 0.03449
June 2005 0.01813 0.05470 April 2010 0.00445 0.03421
July 2005 0.01784 0.05427 May 2010 0.00427 0.03393
August 2005 0.01755 0.05385 June 2010 0.00409 0.03364
September 2005 0.01726 0.05342 July 2010 0.00391 0.03336
October 2005 0.01697 0.05300 August 2010 0.00373 0.03309
November 2005 0.01669 0.05258 September 2010 0.00355 0.03281
December 2005 0.01640 0.05217 October 2010 0.00338 0.03254
November 2010 0.00320 0.03227
January 2006 0.01612 0.05175 December 2010 0.00303 0.03200
February 2006 0.01585 0.05134
March 2006 0.01557 0.05094 January 2011 0.00286 0.03173
April 2006 0.01530 0.05053 February 2011 0.00269 0.03146
May 2006 0.01502 0.05013 March 2011 0.00252 0.03120
June 2006 0.01476 0.04974 April 2011 0.00235 0.03094
July 2006 0.01449 0.04934 May 2011 0.00218 0.03068
August 2006 0.01422 0.04895 June 2011 0.00202 0.03042
September 2006 0.01396 0.04856 July 2011 0.00186 0.03016
October 2006 0.01370 0.04817 August 2011 0.00169 0.02991
November 2006 0.01344 0.04779 September 2011 0.00153 0.02966
December 2006 0.01319 0.04741 October 2011 0.00137 0.02941
November 2011 0.00122 0.02916
January 2007 0.01293 0.04703 December 2011 0.00106 0.02891
February 2007 0.01268 0.04665
March 2007 0.01243 0.04628 January 2012 0.00090 0.02866
April 2007 0.01218 0.04591 February 2012 0.00075 0.02842
May 2007 0.01193 0.04554 March 2012 0.00060 0.02818
June 2007 0.01169 0.04518 April 2012 0.00045 0.02794
July 2007 0.01145 0.04481 May 2012 0.00030 0.02770
August 2007 0.01121 0.04446 June 2012 0.00015 0.02746
</TABLE>
GNMA PORTFOLIOS GNMA-11
<PAGE>
GNMA PORTFOLIO SERIES 9
<TABLE>
MONTHLY
- -------
<CAPTION>
ESTIMATED ESTIMATED ESTIMATED ESTIMATED
INTEREST PRINCIPAL INTEREST PRINCIPAL
DATES DISTRIBUTION DISTRIBUTION DATES DISTRIBUTION DISTRIBUTION
- -------------- ------------ ------------ -------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
June 1997 $0.00589 $0.00000 April 2002 $0.04210 $0.05556
July 1997 0.05889 0.01021 May 2002 0.04178 0.05519
August 1997 0.05883 0.01237 June 2002 0.04145 0.05482
September 1997 0.05876 0.01453 July 2002 0.04113 0.05445
October 1997 0.05867 0.01669 August 2002 0.04081 0.05409
November 1997 0.05857 0.01884 September 2002 0.04049 0.05372
December 1997 0.05846 0.02099 October 2002 0.04017 0.05336
November 2002 0.03986 0.05301
January 1998 0.05834 0.02313 December 2002 0.03955 0.05265
February 1998 0.05820 0.02526
March 1998 0.05806 0.02738 January 2003 0.03924 0.05230
April 1998 0.05789 0.02948 February 2003 0.03893 0.05195
May 1998 0.05772 0.03158 March 2003 0.03862 0.05160
June 1998 0.05753 0.03365 April 2003 0.03832 0.05125
July 1998 0.05734 0.03572 May 2003 0.03802 0.05091
August 1998 0.05713 0.03776 June 2003 0.03772 0.05057
September 1998 0.05690 0.03979 July 2003 0.03742 0.05023
October 1998 0.05667 0.04179 August 2003 0.03712 0.04989
November 1998 0.05642 0.04378 September 2003 0.03683 0.04956
December 1998 0.05617 0.04574 October 2003 0.03654 0.04923
November 2003 0.03625 0.04890
January 1999 0.05590 0.04767 December 2003 0.03596 0.04857
February 1999 0.05562 0.04958
March 1999 0.05532 0.05147 January 2004 0.03567 0.04824
April 1999 0.05502 0.05333 February 2004 0.03539 0.04792
May 1999 0.05471 0.05515 March 2004 0.03511 0.04760
June 1999 0.05438 0.05695 April 2004 0.03483 0.04728
July 1999 0.05405 0.05872 May 2004 0.03455 0.04696
August 1999 0.05370 0.06045 June 2004 0.03427 0.04664
September 1999 0.05334 0.06215 July 2004 0.03400 0.04633
October 1999 0.05298 0.06382 August 2004 0.03373 0.04602
November 1999 0.05260 0.06545 September 2004 0.03345 0.04571
December 1999 0.05222 0.06704 October 2004 0.03319 0.04540
November 2004 0.03292 0.04510
January 2000 0.05182 0.06659 December 2004 0.03265 0.04480
February 2000 0.05143 0.06615
March 2000 0.05104 0.06571 January 2005 0.03239 0.04450
April 2000 0.05065 0.06527 February 2005 0.03213 0.04420
May 2000 0.05027 0.06483 March 2005 0.03187 0.04390
June 2000 0.04989 0.06440 April 2005 0.03161 0.04360
July 2000 0.04951 0.06397 May 2005 0.03135 0.04331
August 2000 0.04913 0.06354 June 2005 0.03110 0.04302
September 2000 0.04876 0.06311 July 2005 0.03084 0.04273
October 2000 0.04839 0.06269 August 2005 0.03059 0.04244
November 2000 0.04802 0.06227 September 2005 0.03034 0.04216
December 2000 0.04765 0.06186 October 2005 0.03009 0.04187
November 2005 0.02985 0.04159
January 2001 0.04729 0.06144 December 2005 0.02960 0.04131
February 2001 0.04692 0.06103
March 2001 0.04656 0.06063 January 2006 0.02936 0.04103
April 2001 0.04621 0.06022 February 2006 0.02912 0.04076
May 2001 0.04585 0.05982 March 2006 0.02888 0.04048
June 2001 0.04550 0.05942 April 2006 0.02864 0.04021
July 2001 0.04515 0.05902 May 2006 0.02840 0.03994
August 2001 0.04480 0.05863 June 2006 0.02817 0.03967
September 2001 0.04446 0.05823 July 2006 0.02793 0.03940
October 2001 0.04411 0.05784 August 2006 0.02770 0.03914
November 2001 0.04377 0.05746 September 2006 0.02747 0.03888
December 2001 0.04344 0.05707 October 2006 0.02724 0.03861
November 2006 0.02701 0.03835
January 2002 0.04310 0.05669 December 2006 0.02679 0.03809
February 2002 0.04277 0.05631
March 2002 0.04243 0.05593 January 2007 0.02656 0.03784
</TABLE>
GNMA PORTFOLIOS GNMA-12
<PAGE>
<TABLE>
<CAPTION>
ESTIMATED ESTIMATED ESTIMATED ESTIMATED
INTEREST PRINCIPAL INTEREST PRINCIPAL
DATES DISTRIBUTION DISTRIBUTION DATES DISTRIBUTION DISTRIBUTION
- -------------- ------------ ------------ -------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
February 2007 $0.02634 $0.03758 $March 2012 $0.01525 $0.02483
March 2007 0.02612 0.03733 April 2012 0.01510 0.02466
April 2007 0.02590 0.03708 May 2012 0.01495 0.02449
May 2007 0.02568 0.03683 June 2012 0.01481 0.02432
June 2007 0.02546 0.03658 July 2012 0.01467 0.02416
July 2007 0.02525 0.03633 August 2012 0.01453 0.02399
August 2007 0.02503 0.03609 September 2012 0.01438 0.02383
September 2007 0.02482 0.03584 October 2012 0.01424 0.02367
October 2007 0.02461 0.03560 November 2012 0.01410 0.02350
November 2007 0.02440 0.03536 December 2012 0.01397 0.02334
December 2007 0.02419 0.03512
January 2013 0.01383 0.02318
January 2008 0.02399 0.03489 February 2013 0.01369 0.02303
February 2008 0.02378 0.03465 March 2013 0.01356 0.02287
March 2008 0.02358 0.03442 April 2013 0.01342 0.02271
April 2008 0.02337 0.03418 May 2013 0.01329 0.02256
May 2008 0.02317 0.03395 June 2013 0.01315 0.02240
June 2008 0.02297 0.03372 July 2013 0.01302 0.02225
July 2008 0.02277 0.03350 August 2013 0.01289 0.02210
August 2008 0.02258 0.03327 September 2013 0.01276 0.02195
September 2008 0.02238 0.03304 October 2013 0.01263 0.02180
October 2008 0.02219 0.03282 November 2013 0.01250 0.02165
November 2008 0.02199 0.03260 December 2013 0.01238 0.02150
December 2008 0.02180 0.03238
January 2014 0.01225 0.02135
January 2009 0.02161 0.03216 February 2014 0.01212 0.02121
February 2009 0.02142 0.03194 March 2014 0.01200 0.02106
March 2009 0.02123 0.03173 April 2014 0.01188 0.02092
April 2009 0.02105 0.03151 May 2014 0.01175 0.02077
May 2009 0.02086 0.03130 June 2014 0.01163 0.02063
June 2009 0.02068 0.03109 July 2014 0.01151 0.02049
July 2009 0.02049 0.03088 August 2014 0.01139 0.02035
August 2009 0.02031 0.03067 September 2014 0.01127 0.02021
September 2009 0.02013 0.03046 October 2014 0.01115 0.02007
October 2009 0.01995 0.03025 November 2014 0.01103 0.01993
November 2009 0.01977 0.03005 December 2014 0.01091 0.01980
December 2009 0.01960 0.02984
January 2015 0.01080 0.01966
January 2010 0.01942 0.02964 February 2015 0.01068 0.01953
February 2010 0.01925 0.02944 March 2015 0.01057 0.01939
March 2010 0.01907 0.02924 April 2015 0.01045 0.01926
April 2010 0.01890 0.02904 May 2015 0.01034 0.01913
May 2010 0.01873 0.02885 June 2015 0.01023 0.01899
June 2010 0.01856 0.02865 July 2015 0.01011 0.01886
July 2010 0.01839 0.02846 August 2015 0.01000 0.01873
August 2010 0.01822 0.02826 September 2015 0.00989 0.01861
September 2010 0.01806 0.02807 October 2015 0.00978 0.01848
October 2010 0.01789 0.02788 November 2015 0.00967 0.01835
November 2010 0.01773 0.02769 December 2015 0.00957 0.01822
December 2010 0.01756 0.02750
January 2016 0.00946 0.01810
January 2011 0.01740 0.02732 February 2016 0.00935 0.01797
February 2011 0.01724 0.02713 March 2016 0.00925 0.01785
March 2011 0.01708 0.02695 April 2016 0.00914 0.01773
April 2011 0.01692 0.02676 May 2016 0.00904 0.01760
May 2011 0.01676 0.02658 June 2016 0.00893 0.01748
June 2011 0.01661 0.02640 July 2016 0.00883 0.01736
July 2011 0.01645 0.02622 August 2016 0.00873 0.01724
August 2011 0.01630 0.02604 September 2016 0.00863 0.01712
September 2011 0.01614 0.02586 October 2016 0.00853 0.01701
October 2011 0.01599 0.02569 November 2016 0.00843 0.01689
November 2011 0.01584 0.02551 December 2016 0.00833 0.01677
December 2011 0.01569 0.02534
January 2017 0.00823 0.01666
January 2012 0.01554 0.02517 February 2017 0.00813 0.01654
February 2012 0.01539 0.02500 March 2017 0.00803 0.01643
</TABLE>
GNMA PORTFOLIOS GNMA-13
<PAGE>
<TABLE>
<CAPTION>
ESTIMATED ESTIMATED ESTIMATED ESTIMATED
INTEREST PRINCIPAL INTEREST PRINCIPAL
DATES DISTRIBUTION DISTRIBUTION DATES DISTRIBUTION DISTRIBUTION
- -------------- ------------ ------------ -------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
April 2017 $0.00793 $0.01631 June 2022 $0.00308 $0.01056
May 2017 0.00784 0.01620 July 2022 0.00302 0.01048
June 2017 0.00774 0.01609 August 2022 0.00296 0.01041
July 2017 0.00765 0.01598 September 2022 0.00290 0.01034
August 2017 0.00755 0.01587 October 2022 0.00284 0.01026
September 2017 0.00746 0.01576 November 2022 0.00278 0.01019
October 2017 0.00737 0.01565 December 2022 0.00272 0.01012
November 2017 0.00728 0.01554
December 2017 0.00718 0.01543 January 2023 0.00266 0.01005
February 2023 0.00260 0.00998
January 2018 0.00709 0.01532 March 2023 0.00254 0.00990
February 2018 0.00700 0.01522 April 2023 0.00248 0.00983
March 2018 0.00691 0.01511 May 2023 0.00242 0.00976
April 2018 0.00682 0.01501 June 2023 0.00237 0.00969
May 2018 0.00674 0.01490 July 2023 0.00231 0.00963
June 2018 0.00665 0.01480 August 2023 0.00225 0.00956
July 2018 0.00656 0.01470 September 2023 0.00220 0.00949
August 2018 0.00647 0.01459 October 2023 0.00214 0.00942
September 2018 0.00639 0.01449 November 2023 0.00208 0.00935
October 2018 0.00630 0.01439 December 2023 0.00203 0.00929
November 2018 0.00622 0.01429
December 2018 0.00613 0.01419 January 2024 0.00197 0.00922
February 2024 0.00192 0.00916
January 2019 0.00605 0.01409 March 2024 0.00187 0.00909
February 2019 0.00597 0.01400 April 2024 0.00181 0.00902
March 2019 0.00589 0.01390 May 2024 0.00176 0.00896
April 2019 0.00580 0.01380 June 2024 0.00171 0.00890
May 2019 0.00572 0.01370 July 2024 0.00165 0.00883
June 2019 0.00564 0.01361 August 2024 0.00160 0.00877
July 2019 0.00556 0.01351 September 2024 0.00155 0.00871
August 2019 0.00548 0.01342 October 2024 0.00150 0.00864
September 2019 0.00540 0.01333 November 2024 0.00145 0.00858
October 2019 0.00532 0.01323 December 2024 0.00140 0.00852
November 2019 0.00525 0.01314
December 2019 0.00517 0.01305 January 2025 0.00135 0.00846
February 2025 0.00130 0.00840
January 2020 0.00509 0.01296 March 2025 0.00125 0.00834
February 2020 0.00502 0.01287 April 2025 0.00120 0.00828
March 2020 0.00494 0.01278 May 2025 0.00115 0.00822
April 2020 0.00487 0.01269 June 2025 0.00110 0.00816
May 2020 0.00479 0.01260 July 2025 0.00105 0.00810
June 2020 0.00472 0.01251 August 2025 0.00101 0.00804
July 2020 0.00464 0.01242 September 2025 0.00096 0.00798
August 2020 0.00457 0.01234 October 2025 0.00091 0.00793
September 2020 0.00450 0.01225 November 2025 0.00087 0.00787
October 2020 0.00442 0.01216 December 2025 0.00082 0.00781
November 2020 0.00435 0.01208
December 2020 0.00428 0.01199 January 2026 0.00077 0.00776
February 2026 0.00073 0.00770
January 2021 0.00421 0.01191 March 2026 0.00068 0.00764
February 2021 0.00414 0.01183 April 2026 0.00064 0.00759
March 2021 0.00407 0.01174 May 2026 0.00059 0.00753
April 2021 0.00400 0.01166 June 2026 0.00055 0.00748
May 2021 0.00393 0.01158 July 2026 0.00050 0.00742
June 2021 0.00387 0.01150 August 2026 0.00046 0.00737
July 2021 0.00380 0.01141 September 2026 0.00042 0.00732
August 2021 0.00373 0.01133 October 2026 0.00037 0.00726
September 2021 0.00366 0.01125 November 2026 0.00033 0.00721
October 2021 0.00360 0.01118 December 2026 0.00029 0.00716
November 2021 0.00353 0.01110
December 2021 0.00347 0.01102 January 2027 0.00025 0.00711
February 2027 0.00020 0.00705
January 2022 0.00340 0.01094 March 2027 0.00016 0.00700
February 2022 0.00334 0.01086 April 2027 0.00012 0.00695
March 2022 0.00327 0.01079 May 2027 0.00008 0.00690
April 2022 0.00321 0.01071 June 2027 0.00004 0.00685
May 2022 0.00315 0.01063
</TABLE>
GNMA PORTFOLIOS GNMA-14
<PAGE>
THE U.S. TREASURY PORTFOLIO SERIES
THE TRUST PORTFOLIO
U.S. Treasury Portfolio Series 19 was formed for the purpose of providing
safety of capital and investment flexibility through an investment in a
portfolio of U.S. Treasury Obligations that is backed by the full faith and
credit of the United States government. The U.S. Treasury Portfolio Series
was also formed for the purpose of providing protection against changes in
interest rates and also passing through to Unitholders in all states the
exemption from state personal income taxes afforded to direct owners of U.S.
obligations. The value of the Units, the estimated current return and
estimated long-term return to new purchasers will fluctuate with the value of
the Securities included in a portfolio which will generally increase or
decrease inversely with changes in interest rates.
The U.S. Treasury Portfolio Series may be an appropriate investment vehicle
for investors who desire to participate in a portfolio of taxable, fixed
income securities offering the safety of capital provided by an investment
backed by the full faith and credit of the United States. In addition, many
investors may benefit from the exemption from state and local personal income
taxes that will pass through the U.S. Treasury Portfolio Series to
Unitholders in virtually all states.
In selecting U.S. Treasury Obligations for deposit in the U.S. Treasury
Portfolio Series, the following factors, among others were, considered by the
Sponsor: (a) the types of such obligations available; (b) the prices and
yields of such obligations relative to other comparable obligations,
including the extent to which such obligations are traded at a premium or at
a discount from par; and (c) the maturities of such obligations.
RISK FACTORS
The Securities are direct obligations of the United States and are backed by
its full faith and credit although the Units of a Trust are not so backed.
The Securities are not rated but in the opinion of the Sponsor have credit
characteristics comparable to those of securities rated "AAA" by nationally
recognized rating agencies.
An investment in Units of a Trust should be made with an understanding of the
risks which an investment in fixed rate debt obligations may entail,
including the risk that the value of the Securities and hence the Units will
decline with increases in interest rates. The high inflation of past years,
together with the fiscal measures adopted to attempt to deal with it, have
resulted in wide fluctuations in interest rates and, thus, in the value of
fixed rate debt obligations generally. The Sponsor cannot predict whether
such fluctuations will continue in the future. For a discussion of other
considerations associated with an investment in Units, see "General
Information--Trust Information."
U.S. TREASURY PORTFOLIO SERIES US-1
<PAGE>
RANSON UNIT INVESTMENT TRUST, SERIES 58
U.S. TREASURY PORTFOLIO, SERIES 19
PORTFOLIO AS OF THE INITIAL DATE OF DEPOSIT: MAY 22, 1997
<TABLE>
<CAPTION>
Cost of
Face Securities
Amount Coupon Maturities to Trust(1)
- ------------------------------------------------------------------
<S> <C> <C> <C>
$ 100,000 6.125% 7/31/2000 $ 99,188
100,000 6.625 7/31/2001 100,375
100,000 6.375 8/15/2002 99,531
85,000 5.750 8/15/2003 81,441
15,000(2) 0.000 8/15/2003 10,031
100,000 7.250 8/15/2004 103,297
$ 500,000 $ 493,863
</TABLE>
- --------------------
See "Notes to Portfolio."
U.S. TREASURY PORTFOLIO SERIES US-2
<PAGE>
NOTES TO PORTFOLIO:
(1) Some Securities may be represented by contracts to purchase such
Securities. During the initial offering period, evaluations of Securities
are made on the basis of current offering side evaluations of the
Securities. The aggregate offering price is greater than the aggregate
bid price of the Securities, which is the basis on which Redemption
Prices will be determined for purposes of redemption of Units after the
initial offering period. Other information regarding the Securities at
the opening of business on the Initial Date of Deposit, is as follows:
<TABLE>
<CAPTION>
U.S.
Treasury
Series 19
-------------
<S> <C>
Cost of Securities to Sponsor $ 493,333
Profit or (Loss) to Sponsor $ 530
Annual Interest Income to Trust $ 31,263
Bid Side Value of Securities $ 493,045
</TABLE>
(2) This Security has been purchased at a deep discount from the par value
because there is little or no stated interest income thereon. Securities
which pay no interest are normally described as "zero coupon" Securities.
Over the life of Securities purchased at a deep discount the value of such
Securities will increase such that upon maturity the holders of such
securities will receive 100% of the principal amount thereof.
U.S. TREASURY PORTFOLIO SERIES US-3
<PAGE>
FEDERAL TAX STATUS
In the opinion of Chapman and Cutler, counsel for the Sponsor, under existing
law:
(1) Each Trust is not an association taxable as a corporation for Federal
income tax purposes and each Unitholder will be treated as the owner of a
pro rata portion of such Trust under the Internal Revenue Code of 1986,
as amended (the "Code") and income of such Trust will be treated as the
income of the Unitholders under the Code. Each Unitholder will be
considered to have received his or her pro rata share of income derived
from each Trust asset when such income is considered to be received by
the Trust.
(2) Each Unitholder will have a taxable event when a Trust disposes of a U.S.
Treasury Obligation, or when the Unitholder redeems or sells his Units.
Unitholders must reduce the tax basis of their Units for their share of
accrued interest received by a Trust, if any, on U.S. Treasury
Obligations delivered after the Unitholders pay for their Units to the
extent that such interest accrued on such U.S. Treasury Obligations
before the date the Trust acquired ownership of the U.S. Treasury
Obligations (and the amount of this reduction may exceed the amount of
accrued interest paid to the seller) and, consequently, such Unitholders
may have an increase in taxable gain or reduction in capital loss upon
the disposition of such Units. It should be noted that certain
legislative proposals have been made which could effect the calculation
of basis for Unitholders holding securities that are substantially
identical to the Securities. Unitholders should consult their own tax
advisors with regard to calculation of basis. 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 U.S. Treasury Obligations (whether by sale, payment on
maturity, redemption or otherwise), gain or loss is recognized to the
Unitholder. The amount of any such gain or loss is measured by comparing
the Unitholder's pro rata share of the total proceeds from such
disposition with the Unitholder's basis for his or her fractional
interest in the asset disposed of. In the case of a Unitholder who
purchases Units, such basis (before adjustment for earned original issue
discount, amortized bond premium and accrued market discount (if the
Unitholder has elected to include such market discount in income as it
accrues), if any) is determined by apportioning the cost of the Units
among each of a Trust assets ratably according to value as of the
valuation date nearest the date of acquisition of the Units. The tax
basis reduction requirements of said Code relating to amortization of
bond premium may, under some circumstances, result in the Unitholder
realizing a taxable gain when his Units are sold or redeemed for an
amount equal to his original cost.
(3) Certain Trusts may contain "zero coupon" Stripped Treasury Securities.
The basis of each Unit and of each U.S. Treasury Obligation which was
issued with original issue discount must be increased by the amount of
accrued original issue discount and the basis of each unit and of each
U.S. Treasury Obligation which was purchased by a Trust at a premium must
be reduced by the annual amortization of bond premium which the
Unitholder has properly elected to amortize under Section 171 of the
Code. The Stripped Treasury Securities held by a Trust are treated as
bonds that were originally issued at an original issue discount provided,
pursuant to a Treasury Regulation (the "Regulation") issued on December
28, 1992, that the amount of original issue discount determined under
Section 1286 of the Code is not less than a "de minimis" amount as
determined thereunder. Because the Stripped Treasury Securities represent
interests in "stripped" U.S. Treasury bonds, a Unitholder's initial cost
for his pro rata portion of each Stripped Treasury Security held by a
Trust (determined at the time he acquires his Units, in the manner
described above) will be treated as its "purchase price" by the
Unitholder. Original issue discount is effectively treated as interest
for Federal income tax purposes, and the amount of original issue
U.S. TREASURY PORTFOLIO SERIES US-4
<PAGE>
discount in this case is generally the difference between the bond's
purchase price and its stated redemption price at maturity. A Unitholder
will be required to include in gross income for each taxable year the sum
of his daily portions of original issue discount attributable to the
Stripped Treasury Securities held by a Trust as such original issue
discount accrues and will, in general, be subject to Federal income tax
with respect to the total amount of such original issue discount that
accrues for such year even though the income is not distributed to the
Unitholders during such year to the extent it is not less than a "de
minimis" amount as determined under the Regulation. To the extent the
amount of such discount is less than the respective "de minimis" amount,
such discount shall be treated as zero. In general, original issue
discount accrues daily under a constant interest rate method which takes
into account the semi-annual compounding of accrued interest. In the case
of the Stripped Treasury Securities, this method will generally result in
an increase amount of income to the Unitholders each year. Unitholders
should consult their tax advisers regarding the Federal income tax
consequences and accretion of original issue discount.
(4) The Unitholder's aliquot share of the total proceeds received on the
disposition of, or principal paid with respect to, a U.S. Treasury
Obligation held by a Trust will constitute ordinary income (which will be
treated as interest income for most purposes) to the extent it does not
exceed the accrued market discount on such U.S. Treasury Obligation that
has not previously been included in taxable income by such Unitholder. A
Unitholder may generally elect to include market discount in income as
such discount accrues. In generally, market discount is the excess, if
any, of the Unitholder's pro rata portion of the outstanding principal
balance of a U.S. Treasury Obligation over the Unitholder's initial tax
basis for such pro rata portion, determined at the time such Unitholder
acquires his Units. However, market discount with respect to any U.S.
Treasury Obligation will generally be considered zero if it amounts to
less than .025% of the obligation's stated redemption price at maturity
times the number of years to maturity. The market discount rules do not
apply to Stripped Treasury Securities because they are stripped debt
instruments subject to special original issue discount rules as discussed
above. If a Unitholder sells his Units, gain, if any, will constitute
ordinary income to the extent of the aggregate of the accrued market
discount on the Unitholder's pro rata portion of each U.S. Treasury
Obligation that is held by a Trust that has not previously been included
in taxable income by such Unitholder. In general, market discount accrues
on a ratable basis unless the Unitholder elects to accrue such discount
on a constant interest rate basis. However, a unitholder should consult
his own tax adviser regarding the accrual of market discount. The
deduction by a Unitholder for any interest expense incurred to purchase
or carry Units will be reduced by the amount of any accrued market
discount that has not yet been included in taxable income by such
Unitholder. In general, the portion of any interest expense which is not
currently deductible would be ultimately deductible when the accrued
market discount is included in income. Unitholders should consult their
own tax advisers regarding whether an election should be made to include
market discount in income as it accrues and as to the amount of interest
expense which may not be currently deductible.
(5) The Code provides that "miscellaneous itemized deductions" are allowable
only to the extent that they exceed two percent of an individual
taxpayer's adjusted gross income. Miscellaneous itemized deductions
subject to this limitation under present law include a Unitholder's pro
rata share of expenses paid by a Trust, including fees of the Trustee and
the Evaluator but does not include amortizable bond premium on U.S.
Treasury Obligations held by a Trust.
"The Revenue Reconciliation Act of 1993" (the "Tax Act") raised tax rates on
ordinary income while capital gains remain subject to a 28% maximum stated
rate for taxpayers other than corporations. Because some or all capital gains
U.S. TREASURY PORTFOLIO SERIES US-5
<PAGE>
are taxed at a comparatively lower rate under the Tax Act, the Tax Act
includes a provision that recharacterizes capital gains as ordinary income in
the case of certain financial transactions that are "conversion transactions"
effective for transactions entered into after April 30, 1993. Unitholders and
prospective investors should consult with their tax advisers regarding the
potential effect of this provision on their investment in Units.
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 purposes of recognition of gain (but not loss).
Unitholders should consult their own tax advisors with regard to any such
constructive sales rules.
A Unitholder of a Trust who is not a citizen or resident of the United States
or a United States domestic corporation (a "Foreign Investor") will not be
subject to U.S. Federal income taxes, including withholding taxes on amounts
distributed from such Trust (including any original issue discount) on, or
any gain from the sale or other disposition of, his Units or the sale or
disposition of any U.S. Treasury Obligations by the Trustee, provided that
(i) the interest income or gain is not effectively connected with the conduct
by the Foreign Investor of a trade or business within the United States, (ii)
with respect to any gain, the Foreign Investor (if an individual) is not
present in the United States for 183 days or more during the taxable year,
and (iii) the Foreign Investor provides the required certification of his
status and of the matters contained in clauses (i) and (ii) above, and
further provided that the exemption from withholding for U.S. Federal income
taxes for interest on any U.S. Treasury Obligation shall only apply to the
extent the U.S. Treasury Obligation was issued by July 18, 1984.
Unless an applicable treaty exemption applies and proper certification is
made, amounts otherwise distributable by the Trust to a Foreign Investor will
generally be subject to withholding taxes under Section 1441 of the Code
unless the Unitholder timely provides his financial representative or the
Trustee with a statement that (i) is signed by the Unitholder under penalties
of perjury, (ii) certifies that such Unitholder is not a United States
person, or in the case of an individual, that he is neither a citizen nor a
resident of the United States, and (iii) provides the name and address of the
Unitholder. The statement may be made, at the option of the person otherwise
required to withhold, on Form W-8 or on a substitute form that is
substantially similar to Form W-8. If the information provided on the
statement changes, the beneficial owner must so inform the person otherwise
required to withhold within 30 days of such change.
The foregoing discussion relates only to Federal income taxes on
distributions by a Trust. Foreign Unitholders should consult their own tax
advisers with respect to the foreign and United States tax consequences or
ownership of Units.
The Sponsor believes that Unitholders who are individuals will not be subject
to any state personal income taxes on the interest received by a Trust and
distributed to them. However, Unitholders (including individuals) may be
subject to state and local taxes on any capital gains (or market discount
treated as ordinary income) derived from a Trust and to other state and local
taxes (including corporate income or franchise taxes, personal property or
intangibles taxes, and estate or inheritance taxes) on their Units or the
income derived therefrom. In addition, individual Unitholders (and any other
Unitholders which are not subject to state and local taxes on the interest
income derived from a Trust) will probably not be entitled to a deduction for
state and local tax purposes for their share of the fees and expenses paid by
a Trust, for any amortized bond premium or for any interest on indebtedness
incurred to purchase or carry their Units. Therefore, even though the Sponsor
believes that interest income from a Trust is exempt from state personal
income taxes in all states Unitholders should consult their own tax advisers
with respect to state and local taxation.
U.S. TREASURY PORTFOLIO SERIES US-6
<PAGE>
It should be remembered that even if distributions are reinvested, they are
still treated as distributions for income tax purposes.
It should also be remembered that Unitholders may be required for Federal
income tax purposes to include amounts in ordinary gross income in advance of
the receipt of the cash attributable to such income.
Each Unitholder (other than a foreign investor who has properly provided the
certifications described above) will be requested to provide the Unitholder's
taxpayer identification number to the Trustee and to certify that the
Unitholder had not been notified that payments to the Unitholder are subject
to back-up withholding. If the proper taxpayer identification number and
appropriate certification are not provided when requested, distributions by a
Trust to such Unitholder will be subject to back up withholding.
The market discount rules do not apply to stripped Treasury Securities
because they are stripped debt instruments subject to special original issue
discount rules. Unitholders should consult their tax advisers as to the
amount of original issue discount which accrues.
If a Unitholder does not elect to annually include accrued market discount in
taxable income as it accrues, deduction for any interest expense incurred by
the Unitholder which is incurred to purchase or carry his Units will be
reduced by such accrued market discount. In general, the portion of any
interest expense which was not currently deductible would ultimately be
deductible when the accrued market discount is included in income.
Unitholders should consult their tax advisers regarding whether an election
should be made to included market discount in income as it accrues and as to
the amount of interest expense which may not be currently deductible.
The tax basis of a Unitholder with respect to his interest in a U.S. Treasury
Obligation is increased by the amount of original issue discount (and market
discount, if the Unitholder elects to include market discount, if any, on the
U.S. Treasury Obligations held by a Trust in income as it accrues) thereon
properly included in the Unitholder's gross income as determined for Federal
income tax purposes and reduced by the amount of any amortized acquisition
premium which the Unitholder has properly elected to amortized under Section
171 of the Code. A Unitholder's tax basis in his Units will equal his tax
basis in his pro rata portion of all of the assets of the Trust.
A Unitholder will recognize capital gain (or loss) when all or part of his
pro rata interest in a U.S. Treasury Obligation is disposed of in a taxable
transaction for an amount greater (or less) than his tax basis thereof. Any
gain recognized on a sale or exchange and not constituting a realization of
accrued "market discount," and any loss will, under current law, generally be
capital gain or loss except in the case of a dealer or financial institution.
As previously discussed, gain realized on the disposition of the interest of
a Unitholder in any U.S. Treasury Obligation deemed to have been acquired
with market discount will be treated as ordinary income to the extent the
gain does not exceed the amount of accrued market discount not previously
taken into income. Any capital gain or loss arising from the disposition of
a U.S. Treasury Obligation by the Trust or the disposition of Units by a
Unitholder will be short-term capital gain or loss unless the Unitholder has
held his Units for more than one year in which case such capital gain or loss
will be long-term. The tax basis reduction requirements of the Code relating
to amortization of bond premium may under some circumstances, result in the
Unitholder realizing taxable gain when his Units are sold or redeemed for an
amount equal to or less than his original costs.
U.S. TREASURY PORTFOLIO SERIES US-7
<PAGE>
If a Unitholder disposes of a Unit, he is deemed thereby to have disposed of
his entire pro rata interest in all Trust assets including his pro rata
portion of the U.S. Treasury Obligations represented by the Unit. This may
result in a portion of the gain, if any, on such sale being taxable as
ordinary income under the market discount rules (assuming no election was
made by the Unitholder to include market discount in income as it accrues) as
previously discussed.
TAX REPORTING AND REALLOCATION
Because each Trust receives interest and makes monthly distributions based
upon such Trust's expected total collections of interest and any anticipated
expenses, certain tax reporting consequences may arise. Each Trust is
required to report Unitholder information to the Internal Revenue Service
("IRS"), based upon the actual collection of interest by such Trust on the
securities in such Trust, without regard to such Trust's expenses or to such
Trust's payments to Unitholders during the year. If distributions to
Unitholders exceed interest collected, the difference will be reported as a
return of principal which will reduce a Unitholder's cost basis in its Units
(and its pro rata interest in the securities in the Trust). A Unitholder must
include in taxable income the amount of income reported by a Trust to the IRS
regardless of the amount distributed to such Unitholder. If a Unitholder's
share of taxable income exceeds income distributions made by a Trust to such
Unitholder, such excess is in all likelihood attributable to the payment of
miscellaneous expenses of such Trust which will not be deductible by an
individual Unitholder as an itemized deduction except, as discussed above, to
the extent that the total amount of certain itemized deductions, such as
investment expenses (which would include the Unitholder's share of Trust
expenses), tax return preparation fees and employee business expenses,
exceeds 2% of such Unitholder's adjusted gross income. Alternatively, in
certain cases, such excess may represent an increase in the Unitholder's tax
basis in the Units owned. Investors with questions regarding these issues
should consult with their tax advisers.
ESTIMATED CASH FLOWS TO UNITHOLDERS
The tables below set forth the per Unit estimated distributions of interest
and principal to Unitholders. The tables assume no changes in Trust expenses,
no redemptions or sales of the underlying U.S. Treasury Obligations prior to
maturity and the receipt of all principal due upon maturity. To the extent
the foregoing assumptions change actual distributions will vary.
U.S. TREASURY PORTFOLIO SERIES 19
<TABLE>
<CAPTION>
Estimated Estimated Estimated
Interest Principal Total
Dates Distribution Distribution Distribution
--------------------------------------- ------------ ------------ ------------
<S> <C> <C> <C>
June 15, 1997 $.00507 $.00507
July 15, 1997 to July 15, 2000 $.05074 $.05074
August 15, 2000 $.05074 $2.00000 $2.05074
September 15, 2000 to July 15, 2001 $.04079 $.04079
August 15, 2001 $.04079 $2.00000 $2.04079
September 15, 2001 to August 15, 2002 $.03000 $.03000
September 15, 2002 $.03000 $2.00000 $2.03000
October 15, 2002 to August 15, 2003 $.01963 $.01963
September 15, 2003 $.01963 $2.00000 $2.01963
October 15, 2003 to August 15, 2004 $.01174 $.01174
September 15, 2004 $.01174 $2.00000 $2.01174
</TABLE>
U.S. TREASURY PORTFOLIO SERIES US-8
<PAGE>
GENERAL INFORMATION
TRUST INFORMATION
Because certain of the Securities in certain of the Trusts may from time to
time under certain circumstances be sold or redeemed or will mature in
accordance with their terms and because the proceeds from such events will be
distributed to Unitholders and will not be reinvested, no assurance can be
given that a Trust will retain for any length of time its present size and
composition. Neither the Sponsor nor the Trustee shall be liable in any way
for any default, failure or defect in any Security. In the event of a failure
to deliver any Security that has been purchased for a Trust under a contract,
including those securities purchased on a "when, as and if issued" basis
("Failed Securities"), the Sponsor is authorized under the Trust Agreement to
direct the Trustee to acquire other securities ("Replacement Securities") to
make up the original corpus of such Trust.
Securities in certain of the Trust Funds may have been purchased on a "when,
as and if issued" or delayed delivery basis with delivery expected to take
place after the First Settlement Date. See "Notes to Portfolios" for each
Trust. Accordingly, the delivery of such Securities may be delayed or may not
occur. Interest on these Securities begins accruing to the benefit of
Unitholders on their respective dates of delivery. To the extent any
Municipal Bonds in a Tax-Exempt Portfolio are actually delivered to such
Trust after their respective expected dates of delivery, Unitholders who
purchase Units in such Trust prior to the date such "when, as and if issued"
or "delayed delivery" Municipal Bonds are actually delivered to the Trustee
would, to the extent such income is not offset by a reduction in the
Trustee's fee (or, to the extent necessary, other expenses), be required to
reduce their tax basis in their Units of such Trust since the interest
accruing on such Municipal Bonds during the interval between their purchase
of Units and the actual delivery of such Municipal Bonds would, for tax
purposes, be considered a non-taxable return of principal rather than as tax-
exempt interest. The result of such adjustment, if necessary, would be,
during the first year only, that the Estimated Long-Term Returns may be, and
the Estimated Current Returns would be, slightly lower than those shown
herein, assuming such Trust portfolios and estimated annual expenses do not
vary. See footnote (4) to "Essential Information." Unitholders of all Trusts
will be "at risk" with respect to any "when, as and if issued" or "delayed
delivery" Securities included in their respective Trust (i.e., may derive
either gain or loss from fluctuations in the evaluation of such Securities)
from the date they commit for Units.
The Replacement Securities must be purchased within 20 days after delivery of
the notice that a contract to deliver a Security will not be honored and the
purchase price may not exceed the amount of funds reserved for the purchase
of the Failed Securities. The Replacement Securities (i) must be payable in
United States currency, (ii) must be purchased at a price that results in a
yield to maturity and a current return at least equal to that of the Failed
Securities as of the Initial Date of Deposit, (iii) shall not be "when, as
and if issued" or restricted securities, (iv) must satisfy any rating
criteria for Securities originally included in such Trust, (v) not cause the
Units of such Trust to cease to be rated AAA by Standard & Poor's if the
Units were so rated on the Initial Date of Deposit and (vi) in the case of
Insured Trust Funds must be insured prior to acquisition by a Trust. In
connection with an Insured Corporate Series, an Investment Grade Series or
High Yield Series, Replacement Securities also must be bonds, debentures,
notes or other straight debt obligations (whether secured or unsecured and
GENERAL INFORMATION GI-1
<PAGE>
whether senior or subordinated) without equity or other conversion features,
with fixed maturity dates substantially the same as those of the Failed
Securities having no warrants or subscription privileges attached and (ii) be
issued after July 18, 1984 if interest thereon is United States source
income. In connection with a Tax-Exempt Portfolio only, Replacement
Securities must also (i) be tax-exempt bonds issued by the appropriate state
or counties, municipalities, authorities or political subdivisions thereof
and (ii) have a fixed maturity date of at least 3 years if the bonds are to
be deposited in a trust other than a long-term trust or at least 10 years if
the bonds are to be deposited in a long-term trust. Whenever a Replacement
Security is acquired for a Trust, the Trustee shall, within five days
thereafter, notify all Unitholders of the Trust of the acquisition of the
Replacement Security and shall, on the next monthly distribution date which
is more than 30 days thereafter, make a pro rata distribution of the amount,
if any, by which the cost to the Trust of the Failed Security exceeded the
cost of the Replacement Security. Once all of the Securities in a Trust are
acquired, the Trustee will have no power to vary the investments of the
Trust, i.e., the Trustee will have no managerial power to take advantage of
market variations to improve a Unitholder's investment.
If the right of limited substitution described in the preceding paragraphs is
not utilized to acquire Replacement Securities in the event of a failed
contract, the Sponsor will refund the sales charge attributable to such
Failed Securities to all Unitholders of the Trust Fund and the Trustee will
distribute the principal and accrued interest attributable to such Failed
Securities not more than 30 days after the date on which the Trustee would
have been required to purchase a Replacement Security. In addition,
Unitholders should be aware that, at the time of receipt of such principal,
they may not be able to reinvest such proceeds in other securities at a yield
equal to or in excess of the yield which such proceeds would have earned for
Unitholders of such Trust Fund.
Whether or not a Replacement Security is acquired, an amount equal to the
accrued interest (at the coupon rate of the Failed Securities) will be paid
to Unitholders of the Trust Fund to the date the Sponsor removes the Failed
Securities from the Trust Fund if the Sponsor determines not to purchase a
Replacement Security or to the date of substitution if a Replacement Security
is purchased. All such interest paid to Unitholders which accrued after the
date of settlement for a purchase of Units will be paid by the Sponsor. In
the event a Replacement Security could not be acquired by a Trust, the net
annual interest income per Unit for such Trust would be reduced and the
Estimated Current Return and Estimated Long-Term Return might be lowered.
Subsequent to the Initial Date of Deposit, a Security may cease to be rated
or its rating may be reduced below any minimum required as of the Initial
Date of Deposit. Neither event requires the elimination of such investment
from a Trust, but may be considered in the Sponsor's determination to direct
the Trustee to dispose of such investment. See "General Information--
Investment Supervision."
The Sponsor may not alter the portfolio of a Trust except upon the happening
of certain extraordinary circumstances. See "General Information--Investment
Supervision." Certain of the Securities may be subject to optional call or
mandatory redemption pursuant to sinking fund provisions, in each case prior
to their stated maturity. A bond subject to optional call is one which is
subject to redemption or refunding prior to maturity at the option of the
issuer, often at a premium over par. A refunding is a method by which a bond
issue is redeemed, at or before maturity, by the proceeds of a new bond
issue. A bond subject to sinking fund redemption is one which is subject to
partial call from time to time at par with proceeds from a fund accumulated
for the scheduled retirement of a portion of an issue to maturity. Special or
extraordinary redemption provisions may provide for redemption at par of all
or a portion of an issue upon the occurrence of certain circumstances, which
may be prior to the optional call dates shown under "Portfolio" for each
GENERAL INFORMATION GI-2
<PAGE>
Trust. Redemption pursuant to optional call provisions is more likely to
occur, and redemption pursuant to special or extraordinary redemption
provisions may occur, when the Securities have an offering side evaluation
which represents a premium over par, that is, when they are able to be
refinanced at a lower cost. The proceeds from any such call or redemption
pursuant to sinking fund provisions, as well as proceeds from the sale of
Securities and from Securities which mature in accordance with their terms
from a Trust, unless utilized to pay for Units tendered for redemption, will
be distributed to Unitholders of such Trust and will not be used to purchase
additional Securities for such Trust. Accordingly, any such call, redemption,
sale or maturity will reduce the size and diversity of a Trust and the net
annual interest income of such Trust and may reduce the Estimated Current
Return and the Estimated Long-Term Return. See "General Information--Interest,
Estimated Long-Term Return and Estimated Current Return." The call,
redemption, sale or maturity of Securities also may have tax consequences to
a Unitholder. See "Federal Tax Status" for each Trust. Information with
respect to the call provisions and maturity dates of the Securities is
contained in "Portfolio" for each Trust.
Each Unit of a Trust represents an undivided fractional interest in the
Securities deposited therein, in the ratio shown under "Essential
Information." Units may be purchased and certificates, if requested, will be
issued in denominations of one Unit or any multiple or fraction thereof,
subject to each Trust's minimum investment requirement of one Unit. Fractions
of Units will be computed to three decimal points. To the extent that Units
of a Trust are redeemed, the principal amount of Securities in such Trust
will be reduced and the undivided fractional interest represented by each
outstanding Unit of such Trust will increase. See "General Information--
Redemption."
Certain of the Securities in certain of the Trusts may have been acquired at
a market discount from par value at maturity. The coupon interest rates on
the discount securities at the time they were purchased and deposited in the
Trusts were lower than the current market interest rates for newly issued
bonds of comparable rating and type. If such interest rates for newly issued
comparable securities increase, the market discount of previously issued
securities will become greater, and if such interest rates for newly issued
comparable securities decline, the market discount of previously issued
securities will be reduced, other things being equal. Investors should also
note that the value of securities purchased at a market discount will
increase in value faster than securities purchased at a market premium if
interest rates decrease. Conversely, if interest rates increase, the value of
securities purchased at a market discount will decrease faster than
securities purchased at a market premium. In addition, if interest rates
rise, the prepayment risk of higher yielding, premium securities and the
prepayment benefit for lower yielding, discount securities will be reduced. A
discount security held to maturity will have a larger portion of its total
return in the form of taxable income and capital gain and loss in the form of
tax-exempt interest income than a comparable security newly issued at current
market rates. See "Federal Tax Status." Market discount attributable to
interest changes does not indicate a lack of market confidence in the issue.
Neither the Sponsor nor the Trustee shall be liable in any way for any
default, failure or defect in any of the Securities.
Certain of the Securities in certain of the Trust Funds may be "zero coupon"
bonds, i.e., an original issue discount bond that does not provide for the
payment of current interest. Zero coupon bonds are purchased at a deep
discount because the buyer receives only the right to receive a final payment
at the maturity of the bond and does not receive any periodic interest
payments. The effect of owning deep discount bonds which do not make current
interest payments (such as the zero coupon bonds) is that a fixed yield is
earned not only on the original investment but also, in effect, on all
discount earned during the life of such obligation. This implicit
reinvestment of earnings at the same rate eliminates the risk of being unable
GENERAL INFORMATION GI-3
<PAGE>
to reinvest the income on such obligation at a rate as high as the implicit
yield on the discount obligation, but at the same time eliminates the
holder's ability to reinvest at higher rates in the future. For this reason,
zero coupon bonds are subject to substantially greater price fluctuations
during periods of changing market interest rates than are securities of
comparable quality which pay interest currently. For the Federal tax
consequences of original issue discount securities such as the zero coupon
bonds, see "Federal Tax Status" for each Trust.
To the best of the Sponsor's knowledge, there is no litigation pending as of
the Initial Date of Deposit in respect of any Security which might reasonably
be expected to have a material adverse effect on the Trust Funds. At any time
after the Initial Date of Deposit, litigation may be instituted on a variety
of grounds with respect to the Securities. The Sponsor is unable to predict
whether any such litigation may be instituted, or if instituted, whether such
litigation might have a material adverse effect on the Trust Funds. The
Sponsor and the Trustee shall not be liable in any way for any default,
failure or defect in any Security.
RETIREMENT PLANS
Units of the Trusts (other than a Tax-Exempt Portfolio) may be well suited
for purchase by Individual Retirement Accounts, Keogh Plans, pension funds
and other qualified retirement plans. Generally, capital gains and income
received under each of the foregoing plans are deferred from federal
taxation. All distributions from such plans are generally treated as ordinary
income but may, in some cases, be eligible for special income averaging or
tax-deferred rollover treatment. Investors considering participation in any
such plan should review specific tax laws related thereto and should consult
their attorneys or tax advisers with respect to the establishment and
maintenance of any such plan. Such plans are offered by brokerage firms and
other financial institutions. The Trusts will waive the $1,000 minimum
investment requirement for IRA accounts. The minimum investment is $250 for
tax-deferred plans such as IRA accounts. Fees and charges with respect to
such plans may vary.
The Trustee has agreed to act as custodian for certain retirement plan
accounts. An annual fee of $12.00 per account, if not paid separately, will
be assessed by the Trustee and paid through the liquidation of shares of the
reinvestment account. An individual wishing the Trustee to act as custodian
must complete an Ranson UIT/IRA application and forward it along with a check
made payable to The Bank of New York. Certificates for Individual Retirement
Accounts cannot be issued.
DISTRIBUTION REINVESTMENT
Each Unitholder of a Trust may elect to have distributions of principal
(including capital gains, if any) or interest or both automatically invested
without charge in shares of any mutual fund which is registered in such
Unitholder's state of residence and is underwritten or advised by Zurich
Kemper Investments, Inc. (the "Kemper Funds"), other than those Kemper Funds
sold with a contingent deferred sales charge.
If individuals indicate they wish to participate in the Reinvestment Program
but do not designate a reinvestment fund, the Program Agent referred to below
will contact such individuals to determine which reinvestment fund or funds
they wish to elect. Since the portfolio securities and investment objectives
of such Kemper Funds generally will differ significantly from that of the
Trusts, Unitholders should carefully consider the consequences before
selecting such Kemper Funds for reinvestment. Detailed information with
respect to the investment objectives and the management of the Funds is
contained in their respective prospectuses, which can be obtained from the
GENERAL INFORMATION GI-4
<PAGE>
Sponsor upon request. An investor should read the prospectus of the
reinvestment fund selected prior to making the election to reinvest.
Unitholders who desire to have such distributions automatically reinvested
should inform their broker at the time of purchase or should file with the
Program Agent a written notice of election.
Unitholders who are receiving distributions in cash may elect to participate
in distribution reinvestment by filing with the Program Agent an election to
have such distributions reinvested without charge. Such election must be
received by the Program Agent at least ten days prior to the Record Date
applicable to any distribution in order to be in effect for such Record Date.
Any such election shall remain in effect until a subsequent notice is
received by the Program Agent. See "General Information--Unitholders--
Distributions to Unitholders."
The Program Agent is The Bank of New York. All inquiries concerning
participation in distribution reinvestment should be directed to the Program
Agent at its corporate trust office.
INTEREST, ESTIMATED LONG-TERM RETURN AND ESTIMATED CURRENT RETURN
As of the opening of business on the Initial Date of Deposit, the Estimated
Long-Term Return and the Estimated Current Return, if applicable, for each
Trust were as set forth in the "Essential Information" for each Trust.
Estimated Current Return is calculated by dividing the estimated net annual
interest income per Unit by the Public Offering Price. The estimated net
annual interest income per Unit will vary with changes in fees and expenses
of the Trustee, the Sponsor and the Evaluator and with the principal
prepayment, redemption, maturity, exchange or sale of the Securities while
the Public Offering Price will vary with changes in the offering price of the
underlying Securities and accrued interest; therefore, there is no assurance
that the present Estimated Current Return will be realized in the future.
Estimated Long-Term Return is calculated using a formula which (1) takes into
consideration, and determines and factors in the relative weightings of, the
market values, yields (which takes into account the amortization of premiums
and the accretion of discounts) and estimated retirements or average life of
all of the Securities in a Trust and (2) takes into account the expenses and
sales charge associated with each Trust Unit. Since the market values and
estimated retirements of the Securities and the expenses of a Trust will
change, there is no assurance that the present Estimated Long-Term Return
will be realized in the future. Estimated Current Return and Estimated Long-
Term Return are expected to differ because the calculation of Estimated Long-
Term Return reflects the estimated date and amount of principal returned
while Estimated Current Return calculations include only net annual interest
income and Public Offering Price.
In order to acquire certain of the Securities contracted for by a Trust, it
may be necessary for the Sponsor or Trustee to pay on the dates for delivery
of such Securities amounts covering accrued interest on such Securities which
exceed the amount which will be made available in the letter of credit
furnished by the Sponsor on the Initial Date of Deposit. The Trustee has
agreed to pay any amounts necessary to cover any such excess and will be
reimbursed therefor, without interest, when funds become available from
interest payments on the Securities deposited in that Trust.
Payments received in respect of mortgages underlying Ginnie Maes in each
series of a GNMA Portfolio will consist of a portion representing interest
and a portion representing principal. Although the aggregate monthly payment
made by the obligor on each mortgage remains constant (aside from optional
prepayments of principal), in the early years most of each such payment will
represent interest, while in later years, the proportion representing
GENERAL INFORMATION GI-5
<PAGE>
interest will decline and the proportion representing principal will
increase. However, by reason of optional prepayments, principal payments in
the earlier years on mortgages underlying Ginnie Maes may be substantially in
excess of those required by the amortization schedules of such mortgages.
Therefore, principal payments in later years may be substantially less since
the aggregate unpaid principal balances of such underlying mortgages may have
been greatly reduced. To the extent that the underlying mortgages bearing
higher interest rates in a GNMA Portfolio are prepaid faster than the other
underlying mortgages, the net annual interest rate per Unit and the Estimated
Current Return on the Units of a GNMA Portfolio can be expected to decline.
Monthly payments to the Unitholders of a GNMA Portfolio will reflect all of
these factors.
MARKET FOR UNITS
After the initial offering period, while not obligated to do so, the Sponsor
intends to, and certain of the Underwriters may, subject to change at any
time, maintain a market for Units of the Trust Funds offered hereby and to
continuously offer to purchase said Units at prices, determined by the
Evaluator, based on the aggregate bid prices of the underlying Securities in
such Trusts, together with accrued interest to the expected dates of
settlement. To the extent that a market is maintained during the initial
offering period, the prices at which Units will be repurchased will be based
upon the aggregate offering side evaluation of the Securities in the Trusts.
The aggregate bid prices of the underlying Securities in each Trust are
expected to be less than the related aggregate offering prices (which is the
evaluation method used during the initial public offering period).
Accordingly, Unitholders who wish to dispose of their Units should inquire of
their bank or broker as to current market prices in order to determine
whether there is in existence any price in excess of the Redemption Price
and, if so, the amount thereof.
The offering price of any Units resold by the Sponsor or Underwriters will be
in accord with that described in the currently effective Prospectus
describing such Units. Any profit or loss resulting from the resale of such
Units will belong to the Sponsor and/or the Underwriters. The Sponsor and/or
the Underwriters may suspend or discontinue purchases of Units of any Trust
if the supply of Units exceeds demand, or for other business reasons.
REDEMPTION
A Unitholder who does not dispose of Units in the secondary market described
above may cause Units to be redeemed by the Trustee by making a written
request to the Trustee, The Bank of New York, 101 Barclay Street, New York,
New York 10286, and, in the case of Units evidenced by a certificate, by
tendering such certificate to the Trustee, properly endorsed or accompanied
by a written instrument or instruments of transfer in a form satisfactory to
the Trustee. Unitholders must sign the request, and such certificate or
transfer instrument, exactly as their names appear on the records of the
Trustee and on any certificate representing the Units to be redeemed. If the
amount of the redemption is $500 or less and the proceeds are payable to the
Unitholder(s) of record at the address of record, no signature guarantee is
necessary for redemptions by individual account owners (including joint
owners). Additional documentation may be requested, and a signature guarantee
is always required, from corporations, executors, administrators, trustees,
guardians or associations. The signatures must be guaranteed by a participant
in the Securities Transfer Agents Medallion Program ("STAMP") or such other
guarantee program in addition to, or in substitution for, STAMP, as may be
accepted by the Trustee. A certificate should only be sent by registered or
certified mail for the protection of the Unitholder. Since tender of the
GENERAL INFORMATION GI-6
<PAGE>
certificate is required for redemption when one has been issued, Units
represented by a certificate cannot be redeemed until the certificate
representing such Units has been received by the purchasers.
Redemption shall be made by the Trustee on the third business day following
the day on which a tender for redemption is received (the "Redemption Date")
by payment of cash equivalent to the Redemption Price for such Trust,
determined as set forth below under "Computation of Redemption Price," as of
the evaluation time stated under "Essential Information," next following such
tender, multiplied by the number of Units being redeemed. Any Units redeemed
shall be canceled and any undivided fractional interest in the Trust
extinguished. The price received upon redemption might be more or less than
the amount paid by the Unitholder depending on the value of the Securities in
the Trust at the time of redemption.
Under regulations issued by the Internal Revenue Service, the Trustee is
required to withhold a certain percentage of the principal amount of a Unit
redemption if the Trustee has not been furnished the redeeming Unitholder's
tax identification number in the manner required by such regulations. Any
amount so withheld is transmitted to the Internal Revenue Service and may be
recovered by the Unitholder only when filing a tax return. Under normal
circumstances the Trustee obtains the Unitholder's tax identification number
from the selling broker. However, any time a Unitholder elects to tender
Units for redemption, such Unitholder should make sure that the Trustee has
been provided a certified tax identification number in order to avoid this
possible "back-up withholding." In the event the Trustee has not been
previously provided such number, one must be provided at the time redemption
is requested.
Any amounts paid on redemption representing interest shall be withdrawn from
the Interest Account for such Trust to the extent that funds are available
for such purpose. All other amounts paid on redemption shall be withdrawn
from the Principal Account for such Trust. The Trustee is empowered to sell
Securities for a Trust in order to make funds available for the redemption of
Units of such Trust. Such sale may be required when Securities would not
otherwise be sold and might result in lower prices than might otherwise be
realized. To the extent Securities are sold, the size and diversity of a
Trust will be reduced.
In the case of a U.S. Treasury Portfolio or a GNMA Portfolio, Securities will
be sold by the Trustee so as to maintain, as closely as practicable, the
original percentage relationship between the principal amounts of the
Securities in such Trusts. The Securities to be sold for purposes of
redeeming Units will be selected from a list supplied by the Sponsor. The
Securities will be chosen for this list by the Sponsor on the basis of such
market and credit factors as it may determine are in the best interests of
such Trusts. Provision is made under the related Trust Agreements for the
Sponsor to specify minimum face amounts in which blocks of Securities are to
be sold in order to obtain the best price available. While such minimum
amounts may vary from time to time in accordance with market conditions, it
is anticipated that the minimum face amounts which would be specified would
range from $25,000 to $100,000. Sales may be required at a time when the
Securities would not otherwise be sold and might result in lower prices than
might otherwise be realized. Moreover, due to the minimum principal amount in
which U.S. Treasury Obligations and Ginnie Maes may be required to be sold,
the proceeds of such sales may exceed the amount necessary for payment of
Units redeemed. To the extent not used to meet other redemption requests in
such Trusts, such excess proceeds will be distributed pro rata to all
remaining Unitholders of record of such Trusts, unless reinvested in
substitute Securities. See "General Information--Investment Supervision."
GENERAL INFORMATION GI-7
<PAGE>
The Trustee is irrevocably authorized in its discretion, if an Underwriter
does not elect to purchase any Unit tendered for redemption, in lieu of
redeeming such Units, to sell such Units in the over-the-counter market for
the account of tendering Unitholders at prices which will return to the
Unitholders amounts in cash, net after brokerage commissions, transfer taxes
and other charges, equal to or in excess of the Redemption Price for such
Units. In the event of any such sale, the Trustee shall pay the net proceeds
thereof to the Unitholders on the day they would otherwise be entitled to
receive payment of the Redemption Price.
The right of redemption may be suspended and payment postponed (1) for any
period during which the New York Stock Exchange is closed, other than
customary weekend and holiday closings, or during which (as determined by the
Securities and Exchange Commission) trading on the New York Stock Exchange is
restricted; (2) for any period during which an emergency exists as a result
of which disposal by the Trustee of Securities is not reasonably practicable
or it is not reasonably practicable to fairly determine the value of the
underlying Securities in accordance with the Trust Agreements; or (3) for
such other period as the Securities and Exchange Commission may by order
permit. The Trustee is not liable to any person in any way for any loss or
damage which may result from any such suspension or postponement.
Computation of Redemption Price. The Redemption Price for Units of each Trust
is computed by the Evaluator as of the evaluation time stated under
"Essential Information" next occurring after the tendering of a Unit for
redemption and on any other business day desired by it, by:
A. adding: (1) the cash on hand in the Trust other than cash deposited in
the Trust to purchase Securities not applied to the purchase of such
Securities; (2) the aggregate value of each issue of the Securities
(including "when issued" contracts, if any) held in the Trust as
determined by the Evaluator on the basis of bid prices therefor; and (3)
interest accrued and unpaid on the Securities in the Trust as of the date
of computation;
B. deducting therefrom (1) amounts representing any applicable taxes or
governmental charges payable out of the Trust and for which no deductions
have been previously made for the purpose of additions to the Reserve
Account described under "General Information--Expenses of the Trusts"; (2)
an amount representing estimated accrued expenses of the Trust, including
but not limited to fees and expenses of the Trustee (including legal and
auditing fees and any insurance costs), the Evaluator, the Sponsor and
bond counsel, if any; (3) cash held for distribution to Unitholders of
record as of the business day prior to the evaluation being made; and (4)
other liabilities incurred by the Trust; and
C. finally dividing the results of such computation by the number of Units
of the Trust outstanding as of the date thereof.
UNITHOLDERS
Ownership of Units. Ownership of Units of any Trust will not be evidenced by
certificates unless a Unitholder, the Unitholder's registered broker/dealer
or the clearing agent for such broker/dealer makes a written request to the
Trustee. Certificates, if issued, will be so noted on the confirmation
statement sent to the Underwriter and broker. Non-receipt of such
certificate(s) must be reported to the Trustee within one year; otherwise, a
2% surety bond fee will be required for replacement.
GENERAL INFORMATION GI-8
<PAGE>
Units are transferable by making a written request to the Trustee and, in the
case of Units evidenced by a certificate, by presenting and surrendering such
certificate to the Trustee properly endorsed or accompanied by a written
instrument or instruments of transfer which should be sent registered or
certified mail for the protection of the Unitholder. Unitholders must sign
such written request, and such certificate or transfer instrument, exactly as
their names appear on the records of the Trustee and on any certificate
representing the Units to be transferred. Such signatures must be guaranteed
by a participant in the Securities Transfer Agents Medallion Program
("STAMP") or such other signature guarantee program in addition to, or in
substitution for, STAMP, as may be accepted by the Trustee.
Units may be purchased and certificates, if requested will be issued in
denominations of one Unit subject to each Trust's minimum investment
requirement of 100 Units or any whole Unit multiple thereof subject to any
minimum requirement established by the Sponsor from time to time. Any
certificate issued will be numbered serially for identification, issued in
fully registered form and will be transferable only on the books of the
Trustee. The Trustee may require a Unitholder to pay a reasonable fee, to be
determined in the sole discretion of the Trustee, for each certificate re-
issued or transferred and to pay any governmental charge that may be imposed
in connection with each such transfer or interchange. The Trustee at the
present time does not intend to charge for the normal transfer or interchange
of certificates. Destroyed, stolen, mutilated or lost certificates will be
replaced upon delivery to the Trustee of satisfactory indemnity (generally
amounting to 3% of the market value of the Units), affidavit of loss,
evidence of ownership and payment of expenses incurred.
Distributions to Unitholders. Interest received by each Trust, including any
portion of the proceeds from a disposition of Securities which represents
accrued interest, is credited by the Trustee to the Interest Account for such
Trust. All other receipts are credited by the Trustee to a separate Principal
Account for the Trust. The Trustee normally has no cash for distribution to
Unitholders until it receives interest payments on the Securities in the
Trust. Since interest usually is paid semiannually (monthly in the case of a
GNMA Portfolio), during the initial months of the Trusts, the Interest
Account of each Trust, consisting of accrued but uncollected interest and
collected interest (cash), will be predominantly the uncollected accrued
interest that is not available for distribution. On the dates set forth under
"Essential Information" for each Trust, the Trustee will commence
distributions, in part from funds advanced by the Trustee.
Thereafter, assuming the Trust retains its original size and composition,
after deduction of the fees and expenses of the Trustee, the Sponsor and
Evaluator and reimbursements (without interest) to the Trustee for any
amounts advanced to a Trust, the Trustee will normally distribute on each
Interest Distribution Date (the fifteenth of the month) or shortly thereafter
to Unitholders of record of such Trust on the preceding Record Date (which is
the first day of each month). Unitholders of the Trusts will receive an
amount substantially equal to one-twelfth of such holders' pro rata share of
the estimated net annual interest income to the Interest Account of such
Trust. However, interest earned at any point in time will be greater than the
amount actually received by the Trustee and distributed to the Unitholders.
Therefore, there will always remain an item of accrued interest that is added
to the daily value of the Units. If Unitholders of a Trust sell or redeem all
or a portion of their Units, they will be paid their proportionate share of
the accrued interest of such Trust to, but not including, the third business
day after the date of a sale or to the date of tender in the case of a
redemption.
In order to equalize distributions and keep the undistributed interest income
of the Trusts at a low level, all Unitholders of record in such Trust on the
first Record Date will receive an interest distribution on the first Interest
GENERAL INFORMATION GI-9
<PAGE>
Distribution Date. Because the period of time between the first Interest
Distribution Date and the regular distribution dates may not be a full
period, the first regular distributions may be partial distributions.
Unitholders of a U.S. Treasury Portfolio which contains Stripped Treasury
Securities should note that Stripped Treasury Securities are sold at a deep
discount because the buyer of those securities obtains only the right to
receive a future fixed payment on the security and not any rights to periodic
interest payments thereon. Purchasers of these Securities acquire, in effect,
discount obligations that are economically identical to the "zero-coupon
bonds" that have been issued by corporations. Zero coupon bonds are debt
obligations which do not make any periodic payments of interest prior to
maturity and accordingly are issued at a deep discount. Under generally
accepted accounting principles, a holder of a security purchased at a
discount normally must report as an item of income for financial accounting
purposes the portion of the discount attributable to the applicable reporting
period. The calculation of this attributable income would be made on the
"interest" method which generally will result in a lesser amount of
includible income in earlier periods and a correspondingly larger amount in
later periods. For Federal income tax purposes, the inclusion will be on a
basis that reflects the effective compounding of accrued but unpaid interest
effectively represented by the discount. Although this treatment is similar
to the "interest" method described above, the "interest" method may differ to
the extent that generally accepted accounting principles permit or require
the inclusion of interest on the basis of a compounding period other than the
semi-annual period. See "Federal Tax Status" for the U.S. Treasury
Portfolios, if any.
Persons who purchase Units between a Record Date and a Distribution Date will
receive their first distribution on the second Distribution Date following
their purchase of Units. Since interest on Bonds in the Trusts is payable at
varying intervals, usually in semi-annual installments, and distributions of
income are made to Unitholders at different intervals from receipt of
interest, the interest accruing to a Trust may not be equal to the amount of
money received and available for distribution from the Interest Account.
Therefore, on each Distribution Date the amount of interest actually
deposited in the Interest Account of a Trust and available for distribution
may be slightly more or less than the interest distribution made. In order to
eliminate fluctuations in interest distributions resulting from such
variances, the Trustee is authorized by the Trust Agreements to advance such
amounts as may be necessary to provide interest distributions of
approximately equal amounts. The Trustee will be reimbursed, without
interest, for any such advances from funds available in the Interest Account
for such Trust.
The Trustee will distribute on each Distribution Date or shortly thereafter,
to each Unitholder of record of a Trust on the preceding Record Date, an
amount substantially equal to such holder's pro rata share of the cash
balance, if any, in the Principal Account of such Trust computed as of the
close of business on the preceding Record Date. However, no distribution will
be required if the balance in the Principal Account is less than $.01 per
Unit. Notwithstanding the foregoing, the Trustee will make a distribution to
Unitholders of all principal relating to maturing U.S. Treasury Obligations
in any U.S. Treasury Portfolio or GNMA Portfolio within twelve business days
of the date of such maturity.
In connection with GNMA Portfolios only, the terms of the Ginnie Maes provide
for payment to the holders thereof (including a GNMA Portfolio) on the
fifteenth day of each month of amounts collected by or due to the issuers
thereof with respect to the underlying mortgages during the preceding month.
The Trustee will collect the interest due a GNMA Portfolio on the Securities
therein as it becomes payable and credit such interest to a separate Interest
Account for such GNMA Portfolio created by the Indenture. Distributions will
be made to each Unitholder of record of a GNMA Portfolio on the appropriate
GENERAL INFORMATION GI-10
<PAGE>
Distribution Date (see "Essential Information") and will consist of an amount
substantially equal to such Unitholder's pro rata share of the cash balances,
if any, in the Interest Account, the Principal Account and any Capital Gains
Account of such GNMA Portfolio, computed as of the close of business on the
preceding Record Date.
Statements to Unitholders. With each distribution, the Trustee will furnish
or cause to be furnished to each Unitholder a statement of the amount of
interest and the amount of other receipts, if any, which are being
distributed, expressed in each case as a dollar amount per Unit.
The accounts of each Trust are required to be audited annually, at the
Trust's expense, by independent auditors designated by the Sponsor, unless
the Sponsor determines that such an audit would not be in the best interest
of the Unitholders of such Trust. The accountants' report will be furnished
by the Trustee to any Unitholder of such Trust upon written request. Within a
reasonable period of time after the end of each calendar year, the Trustee
shall furnish to each person who at any time during the calendar year was a
Unitholder of a Trust a statement, covering the calendar year, setting forth
for the applicable Trust:
A. As to the Interest Account:
1. The amount of interest received on the Securities (and for Tax-Exempt
Portfolios, the percentage of such amount by states and territories
in which the issuers of such Securities are located);
2. The amount paid from the Interest Account representing accrued
interest of any Units redeemed;
3. The deductions from the Interest Account for applicable taxes, if
any, fees and expenses (including auditing fees) of the Trustee,
the Sponsor, the Evaluator, and, if any, of bond counsel;
4. Any amounts credited by the Trustee to the Reserve Account described
under "General Information-- Expenses of the Trusts";
5. The net amount remaining after such payments and deductions,
expressed both as a total dollar amount and a dollar amount per Unit
outstanding on the last business day of such calendar year; and
B. As to the Principal Account:
1. The dates of the maturity, liquidation or redemption of any of the
Securities and the net proceeds received therefrom excluding any
portion credited to the Interest Account;
2. The amount paid from the Principal Account representing the principal
of any Units redeemed;
3. The deductions from the Principal Account for payment of applicable
taxes, if any, fees and expenses (including auditing fees) of the
Trustee, the Sponsor, the Evaluator, and, if any, of bond counsel;
4. The amount of when-issued interest treated as a return of capital, if
any;
5. Any amounts credited by the Trustee to the Reserve Account described
under "General Information-- Expenses of the Trusts";
GENERAL INFORMATION GI-11
<PAGE>
6. The net amount remaining after distributions of principal and
deductions, expressed both as a dollar amount and as a dollar amount
per Unit outstanding on the last business day of the calendar year;
and
C. The following information:
1. A list of the Securities as of the last business day of such calendar
year;
2. The number of Units outstanding on the last business day of such
calendar year;
3. The Redemption Price based on the last evaluation made during such
calendar year;
4. The amount actually distributed during such calendar year from the
Interest and Principal Accounts (and Capital Gains Account, if
applicable) separately stated, expressed both as total dollar amounts
and as dollar amounts per Unit outstanding on the Record Dates for
each such distribution.
Rights of Unitholders. A Unitholder may at any time tender Units to the
Trustee for redemption. The death or incapacity of any Unitholder will not
operate to terminate a Trust nor entitle legal representatives or heirs to
claim an accounting or to bring any action or proceeding in any court for
partition or winding up of a Trust.
No Unitholder shall have the right to control the operation and management of
any Trust in any manner, except to vote with respect to the amendment of the
Trust Agreements or termination of any Trust.
INVESTMENT SUPERVISION
The Sponsor may not alter the portfolios of the Trusts by the purchase, sale
or substitution of Securities, except in the special circumstances noted
below and as indicated earlier under "General Information-- Trust Information"
regarding the substitution of Replacement Securities for any Failed
Securities. Thus, with the exception of the redemption or maturity of
Securities in accordance with their terms, the assets of the Trusts will
remain unchanged under normal circumstances.
The Sponsor may direct the Trustee to dispose of Securities the value of
which has been affected by certain adverse events including institution of
certain legal proceedings or decline in price or the occurrence of other
market factors, including advance refunding, so that in the opinion of the
Sponsor the retention of such Securities in a Trust would be detrimental to
the interest of the Unitholders. The proceeds from any such sales, exclusive
of any portion which represents accrued interest, will be credited to the
Principal Account of such Trust for distribution to the Unitholders.
The Sponsor is required to instruct the Trustee to reject any offer made by
an issuer of Securities to issue new obligations in exchange or substitution
for any of such Securities pursuant to a refunding financing plan, except
that the Sponsor may instruct the Trustee to accept or reject such an offer
or to take any other action with respect thereto as the Sponsor may deem
proper if (1) the issuer is in default with respect to such Securities or (2)
in the written opinion of the Sponsor the issuer will probably default with
respect to such Securities in the reasonably foreseeable future. Any
obligation so received in exchange or substitution will be held by the
Trustee subject to the terms and conditions of the Trust Agreement to the
same extent as Securities originally deposited thereunder. Within five days
after deposit of obligations in exchange or substitution for underlying
GENERAL INFORMATION GI-12
<PAGE>
Securities, the Trustee is required to give notice thereof to each
Unitholder, identifying the Securities eliminated and the Securities
substituted therefor.
The Trustee may sell Securities, designated by the Sponsor, from a Trust for
the purpose of redeeming Units of such Trust tendered for redemption and the
payment of expenses.
ADMINISTRATION OF THE TRUSTS
The Trustee. The Trustee is The Bank of New York, a trust company organized
under the laws of New York. The Bank of New York has its offices at 101
Barclay Street, New York, New York 10286, telephone 1-800-701-8178. The Bank
of New York is subject to supervision and examination by the Superintendent
of Banks of the State of New York and the Board of Governors of the Federal
Reserve System, and its deposits are insured by the Federal Deposit Insurance
Corporation to the extent permitted by law.
The Trustee, whose duties are ministerial in nature, has not participated in
selecting the portfolio of any Trust. For information relating to the
responsibilities of the Trustee under the Trust Agreements, reference is made
to the material set forth under "General Information--Unitholders."
In accordance with the Trust Agreements, the Trustee shall keep records of
all transactions at its office. Such records shall include the name and
address of, and the number of Units held by, every Unitholder of each Trust.
Such books and records shall be open to inspection by any Unitholder of such
Trust at all reasonable times during usual business hours. The Trustee shall
make such annual or other reports as may from time to time be required under
any applicable state or Federal statute, rule or regulation. The Trustee
shall keep a certified copy or duplicate original of the Trust Agreements on
file in its office available for inspection at all reasonable times during
usual business hours by any Unitholder, together with a current list of the
Securities held in each Trust. Pursuant to the Trust Agreements, the Trustee
may employ one or more agents for the purpose of custody and safeguarding of
Securities comprising the Trusts.
Under the Trust Agreements, the Trustee or any successor trustee may resign
and be discharged of its duties created by the Trust Agreements by executing
an instrument in writing and filing the same with the Sponsor.
The Trustee or successor trustee must mail a copy of the notice of
resignation to all Unitholders then of record, not less than 60 days before
the date specified in such notice when such resignation is to take effect.
The Sponsor upon receiving notice of such resignation is obligated to appoint
a successor trustee promptly. If, upon such resignation, no successor trustee
has been appointed and has accepted the appointment within 30 days after
notification, the retiring Trustee may apply to a court of competent
jurisdiction for the appointment of a successor. The Sponsor may at any time
remove the Trustee, with or without cause, and appoint a successor trustee as
provided in the Trust Agreements. Notice of such removal and appointment
shall be mailed to each Unitholder by the Sponsor. Upon execution of a
written acceptance of such appointment by such successor trustee, all the
rights, powers, duties and obligations of the original Trustee shall vest in
the successor. The Trustee shall be a corporation organized under the laws of
the United States, or any state thereof, which is authorized under such laws
to exercise trust powers. The Trustee shall have at all times an aggregate
capital, surplus and undivided profits of not less than $5,000,000.
GENERAL INFORMATION GI-13
<PAGE>
The Evaluator. Ranson & Associates, Inc., the Sponsor, also serves as
Evaluator. The Evaluator may resign or be removed by the Trustee in which
event the Trustee is to use its best efforts to appoint a satisfactory
successor. Such resignation or removal shall become effective upon acceptance
of appointment by the successor evaluator. If upon resignation of the
Evaluator no successor has accepted appointment within 30 days after notice
of resignation, the Evaluator may apply to a court of competent jurisdiction
for the appointment of a successor. Notice of such resignation or removal and
appointment shall be mailed by the Trustee to each Unitholder. At the present
time, pursuant to a contract with the Evaluator, Cantor Fitzgerald & Co., a
non-affiliated firm regularly engaged in the business of evaluating, quoting
or appraising comparable securities, provides, for both the initial offering
period and secondary market transactions, portfolio evaluations of the
Securities in the Trusts which are then reviewed by the Evaluator. In the
event the Sponsor is unable to obtain current evaluations from Cantor
Fitzgerald & Co., it may make its own evaluations or it may utilize the
services of any other non-affiliated evaluator or evaluators it deems
appropriate.
Amendment and Termination. The Trust Agreements may be amended by the Trustee
and the Sponsor without the consent of any of the Unitholders: (1) to cure
any ambiguity or to correct or supplement any provision which may be
defective or inconsistent; (2) to change any provision thereof as may be
required by the Securities and Exchange Commission or any successor
governmental agency; or (3) to make such provisions as shall not adversely
affect the interests of the Unitholders. The Trust Agreements with respect to
the Trusts may also be amended in any respect by the Sponsor and the Trustee,
or any of the provisions thereof may be waived, with the consent of the
holders of Units representing 66 2/3% of the Units then outstanding of such
Trust, provided that no such amendment or waiver will reduce the interest of
any Unitholder thereof without the consent of such Unitholder or reduce the
percentage of Units required to consent to any such amendment or waiver
without the consent of all Unitholders of such Trust. In no event shall any
Trust Agreement be amended to increase the number of Units of a Trust
issuable thereunder or to permit, except in accordance with the provisions of
such Trust Agreement, the acquisition of any Securities in addition to or in
substitution for those initially deposited in a Trust. The Trustee shall
promptly notify Unitholders of the substance of any such amendment.
The Trust Agreements provide that the Trusts shall terminate upon the
maturity, redemption or other disposition of the last of the Securities held
in a Trust. If the value of a Trust shall be less than the applicable minimum
value stated under "Essential Information," the Trustee may, in its
discretion, and shall, when so directed by the Sponsor, terminate the Trust.
A Trust may be terminated at any time by the holders of Units representing 66
2/3% of the Units thereof then outstanding. In the event of termination of a
Trust, written notice thereof will be sent by the Trustee to all Unitholders
of such Trust. Within a reasonable period after termination, the Trustee will
sell any Securities remaining in such Trust and, after paying all expenses
and charges incurred by the Trust, will distribute to Unitholders thereof
(upon surrender for cancellation of certificates for Units, if issued) their
pro rata share of the balances remaining in the Interest and Principal
Accounts (and Capital Gains Account, if applicable) of such Trust.
Limitations on Liability. The Sponsor: The Sponsor is liable for the
performance of its obligations arising from its responsibilities under the
Trust Agreements, but will be under no liability to the Unitholders for
taking any action or refraining from any action in good faith pursuant to the
Trust Agreements or for errors in judgment, except in cases of its own gross
negligence, bad faith or willful misconduct. The Sponsor shall not be liable
or responsible in any way for depreciation or loss incurred by reason of the
sale of any Securities.
The Trustee: The Trust Agreements provide that the Trustee shall be under no
liability for any action taken in good faith in reliance upon prima facie
properly executed documents or for the disposition of monies, Securities or
GENERAL INFORMATION GI-14
<PAGE>
certificates except by reason of its own negligence, bad faith or willful
misconduct, nor shall the Trustee be liable or responsible in any way for
depreciation or loss incurred by reason of the sale by the Trustee of any
Securities. In the event that the Sponsor shall fail to act, the Trustee may
act and shall not be liable for any such action taken by it in good faith.
The Trustee shall not be personally liable for any taxes or other
governmental charges imposed upon or in respect of the Securities or upon the
interest thereon. In addition, the Trust Agreements contain other customary
provisions limiting the liability of the Trustee.
The Evaluator: The Trustee and Unitholders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for the accuracy
thereof. The Trust Agreements provide that the determinations made by the
Evaluator shall be made in good faith upon the basis of the best information
available to it, provided, however, that the Evaluator shall be under no
liability to the Trustee or Unitholders for errors in judgment, but shall be
liable only for its gross negligence, lack of good faith or willful
misconduct.
EXPENSES OF THE TRUSTS
The Sponsor will charge the Trusts a surveillance fee for services performed
for the Trusts in an amount not to exceed that amount set forth in "Essential
Information" but in no event will such compensation, when combined with all
compensation received from other unit investment trusts for which the Sponsor
both acts as sponsor and provides portfolio surveillance, exceed the
aggregate cost to the Sponsor for providing such services. Such fee shall be
based on the total number of Units of the related Trust outstanding as of the
January Record Date for any annual period. The Sponsor will receive a portion
of the sales commissions paid in connection with the purchase of Units and
will share in profits, if any, related to the deposit of Securities in the
Trusts.
The Trustee receives for its services fees set forth under "Essential
Information." The Trustee fee which is calculated monthly is based on the
largest aggregate principal amount of Securities in a Trust at any time
during the period. In no event shall the Trustee be paid less than $2,000 per
Trust in any one year. Funds that are available for future distributions,
redemptions and payment of expenses are held in accounts which are non-
interest bearing to Unitholders and are available for use by the Trustee
pursuant to normal trust procedures; however, the Trustee is also authorized
by the Trust Agreements to make from time to time certain non-interest
bearing advances to the Trusts. During the first year the Trustee has agreed
to lower its fees and absorb expenses by the amount set forth under
"Essential Information." The Trustee's fee will not be increased in future
years in order to make up this reduction in the Trustee's fee. The Trustee's
fee is payable on or before each Distribution Date.
For evaluation of Securities in each Trust, the Evaluator shall receive a
fee, payable monthly, calculated on the basis of that annual rate set forth
under "Essential Information," based upon the largest aggregate principal
amount of Securities in such Trust at any time during such monthly period.
The Trustee's and Evaluator's fees are deducted first from the Interest
Account of a Trust to the extent funds are available and then from the
Principal Account. Such fees may be increased without approval of Unitholders
by amounts not exceeding a proportionate increase in the Consumer Price Index
entitled "All Services Less Rent of Shelter," published by the United States
Department of Labor, or any equivalent index substituted therefor. In
addition, the Trustee's fee may be periodically adjusted in response to
fluctuations in short-term interest rates (reflecting the cost to the Trustee
of advancing funds to a Trust to meet scheduled distributions).
GENERAL INFORMATION GI-15
<PAGE>
Expenses incurred in the establishing of each Trust, including the cost of
the initial preparation of documents relating to such 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 and it is intended that such expenses be amortized over
a five year period or the life of the Trust if less than five years. The
following additional charges are or may be incurred by the Trusts: (a) fees
for the Trustee's extraordinary services; (b) expenses of the Trustee
(including legal and auditing expenses and insurance costs for Insured Trust
Funds, but not including any fees and expenses charged by any agent for
custody and safeguarding of Securities) and of bond counsel, if any; (c)
various governmental charges; (d) expenses and costs of any action taken by
the Trustee to protect a Trust or the rights and interests of the
Unitholders; (e) indemnification of the Trustee for any loss, liability or
expense incurred by it in the administration of a Trust not resulting from
gross negligence, bad faith or willful misconduct on its part; (f)
indemnification of the Sponsor for any loss, liability or expense incurred in
acting in that capacity without gross negligence, bad faith or willful
misconduct; and (g) expenditures incurred in contacting Unitholders upon
termination of the Trusts. The fees and expenses set forth herein are payable
out of the appropriate Trust and, when owing to the Trustee, are secured by a
lien on such Trust. Fees or charges relating to a Trust shall be allocated to
each Trust in the same ratio as the principal amount of such Trust bears to
the total principal amount of all Trusts. Fees or charges relating solely to
a particular Trust shall be charged only to such Trust.
Fees and expenses of the Trusts shall be deducted from the Interest Account
thereof, or, to the extent funds are not available in such Account, from the
Principal Accounts. The Trustee may withdraw from the Principal Account or
the interest Account of any Trust such amounts, if any, as it deems necessary
to establish a reserve for any taxes or other governmental charges or other
extraordinary expenses payable out of the Trust. Amounts so withdrawn shall
be credited to a separate account maintained for a Trust known as the Reserve
Account and shall not be considered a part of the Trust when determining the
value of the Units until such time as the Trustee shall return all or any
part of such amounts to the appropriate account.
THE SPONSOR
Ranson & Associates, Inc., the Sponsor of the Trusts, is an investment
banking firm created in 1995 by a number of former owners and employees of
Ranson Capital Corporation. On November 26, 1996, Ranson & Associates, Inc.
purchased all existing unit investment trusts sponsored by EVEREN Securities,
Inc. Accordingly, Ranson & Associates Inc. is the successor sponsor to unit
investments trusts formerly sponsored by EVEREN Unit Investment Trusts, a
service of EVEREN Securities, Inc. Ranson & Associates, Inc. is also the
sponsor and successor sponsor of Series of The Kansas Tax-Exempt Trust and
Multi-State Series of The Ranson Municipal 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
have sold bonds and unit investment trusts and maintained secondary market
activities relating thereto. 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 in the Midwest and
Southwest, especially in Kansas, Missouri and Texas. The Sponsor's offices
are located at 250 North Rock Road, Suite 150, Wichita, Kansas 67206-2241.
If at any time the Sponsor shall fail to perform any of its duties under the
Trust Agreements or shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or shall have its affairs taken over by public
authorities, then the Trustee may (a) appoint a successor sponsor at rates of
GENERAL INFORMATION GI-16
<PAGE>
compensation deemed by the Trustee to be reasonable and not exceeding such
reasonable amounts as may be prescribed by the Securities and Exchange
Commission, or (b) terminate the Trust Agreements and liquidate the Trusts as
provided therein, or (c) continue to act as Trustee without terminating the
Trust Agreements.
The foregoing financial information with regard to the Sponsor relates to the
Sponsor only and not to these Trusts. Such information is included in this
Prospectus only for the purpose of informing investors as to the financial
responsibility of the Sponsor and its ability to carry out its contractual
obligations with respect to the Trusts. More comprehensive financial
information can be obtained upon request from the Sponsor.
LEGAL OPINIONS
The legality of the Units offered hereby and certain matters relating to
Federal tax law have been passed upon by Chapman and Cutler, 111 West Monroe
Street, Chicago, Illinois 60603, as counsel for the Sponsor.
INDEPENDENT AUDITORS
The statements of net assets, including the Trust portfolios, of the Trusts
at the Initial Date of Deposit, appearing in this Prospectus and Registration
Statement have been audited by Allen, Gibbs & Houlik, L.C., independent
auditors, as set forth in their report appearing elsewhere herein, and are
included in reliance upon such report given upon the authority of such firm
as experts in accounting and auditing.
GENERAL INFORMATION GI-17
<PAGE>
<TABLE>
<CAPTION>
CONTENTS PAGE
-------
<S> <C>
SUMMARY 2
ESSENTIAL INFORMATION 3
THE TRUST FUNDS 6
REPORT OF INDEPENDENT AUDITORS 8
STATEMENTS OF NET ASSETS 9
PUBLIC OFFERING OF UNITS 10
Public Offering Price 10
Accrued Interest 14
Comparison of Public Offering Price and Redemption Price 14
Public Distribution of Units 14
Profits of Sponsor and Underwriters 18
THE INSURED CORPORATE SERIES IC-1
The Trust Portfolio IC-1
Series Information IC-2
Portfolio IC-3
Notes to Portfolio IC-4
Risk Factors IC-5
Insurance on the Bonds IC-7
Federal Tax Status IC-8
Tax Reporting and Reallocation IC-12
Estimated Cash Flows to Unitholders IC-13
THE GNMA PORTFOLIOS
The Trust Portfolio GNMA-1
Portfolios GNMA-2
Notes to Portfolios GNMA-3
Risk Factors GNMA-4
Federal Tax Status GNMA-8
Estimated Cash Flows to Unitholders GNMA-10
THE U.S. TREASURY PORTFOLIO SERIES
The Trust Portfolio US-1
Risk Factors US-1
Portfolio US-2
Notes to Portfolio US-3
Federal Tax Status US-4
Tax Reporting and Reallocation US-8
Estimated Cash Flows to Unitholders US-8
GENERAL INFORMATION GI-1
Trust Information GI-1
Retirement Plans GI-4
Distribution Reinvestment GI-4
Interest, Estimated Long-Term Return and
Estimated Current Return GI-5
Market for Units GI-6
Redemption GI-6
Unitholders GI-8
Investment Supervision GI-12
Administration of the Trusts GI-13
Expenses of the Trusts GI-15
The Sponsor GI-16
Legal Opinions GI-17
Independent Auditors GI-17
</TABLE>
-------------------------------
This Prospectus does not contain all of the information set forth in the
registration statement and exhibits relating thereto, filed with the
Securities and Exchange Commission Washington, D.C. under the Securities Act
of 1933 and the Investment Company Act of 1940, and to which reference is
made.
-------------------------------
No person is authorized to give any information or to make any
representations not contained in this Prospectus and any information or
representation not contained herein must not be relied upon as having been
authorized by the Trusts, the Trustee, or the Sponsor. The Trusts are
registered as unit investment trusts under the Investment Company Act of
1940. Such registration does not imply that the Trusts or the Units have been
guaranteed, sponsored, recommended or approved by the United States or any
state or any agency or officer thereof.
This Prospectus does not constitute an offer to sell, or a solicitation of an
offer to buy, securities in any state to any person to whom it is not lawful
to make such offer in such state.
<PAGE>
- --------------------
RANSON
UNIT
INVESTMENT
TRUSTS
- --------------------
--------------------
PROSPECTUS
--------------------
PROSPECTUS MAY 22, 1997
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents:
The facing sheet
The Cross-Reference sheets
The Prospectus
The signatures
The following exhibits.
1.1(a). Trust Agreement applicable to Insured Corporate, Series 11.
1.1(b). Trust Agreement applicable to GNMA Portfolio, Series 8 and
Series 9.
1.1(c). Trust Agreement applicable to U.S. Treasury Portfolio, Series 19.
1.1.1(a). Standard Terms and Conditions of Trust applicable to Insured
Corporate, Series 11. Reference is made to Exhibit 1.1.1 to
Ranson Unit Investment Trusts, Series 54 (File No. 333-20717)
as filed on February 4, 1997.
1.1.1(b). Standard Terms and Conditions of Trust applicable to GNMA
Portfolio, Series 8 and Series 9 and U.S. Treasury Portflio,
Series 19. Reference is made to Exhibit 1.1.1 to EVEREN Unit
Investment Trusts, Series 47 (File No. 333-03141) as filed on
May 8, 1996.
2.1. Form of Certificate of Ownership (pages three and four of the
Standard Terms and Conditions of Trust included as Exhibit
1.1.1).
3.1. Opinion of counsel to the Sponsor as to legality of the
securities being registered including a consent to the use of
its name under "Legal Opinions" in the Prospectus.
3.2. Opinion of counsel to the Sponsor as to the tax status of the
securities being registered.
4.1. Consent of Independent Auditors.
4.2. Consent of Independent Evaluator.
EX-27.Financial Data Schedules.
S-1
<PAGE>
SIGNATURES
The Registrant, Ranson Unit Investment Trusts, Series 58, hereby identifies
Ranson Unit Investment Trusts, Series 53, Kemper Defined Funds, Series 9,
Kemper Defined Funds, Series 45, Kemper Defined Funds Insured National
Series 1, Kemper Insured Corporate Trust, Series 1, Kemper Tax-Exempt Insured
Income Trust, Multi-State Series 19, and Kemper Government Securities Trust,
Series 39 (GNMA Portfolio), Series 40 (GNMA Portfolio) and Series 41 (U.S.
Treasury Portfolio) for purposes of the representations required by Rule 487
and represents the following: (1) that the portfolio securities deposited in
the series as to the securities of which this Registration Statement is being
filed do not differ materially in type or quality from those deposited in
such previous series; (2) that, except to the extent necessary to identify
the specific portfolio securities deposited in, and to provide essential
financial information for, the series with respect to the securities of which
this Registration Statement is being filed, this Registration Statement does
not contain disclosures that differ in any material respect from those
contained in the registration statements for such previous series as to which
the effective date was determined by the Commission or the staff; and (3)
that it has complied with Rule 460 under the Securities Act of 1933.
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Ranson Unit Investment Trusts, Series 58 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 21st day
of May, 1997.
RANSON UNIT INVESTMENT TRUSTS, SERIES 58
Registrant
By RANSON & ASSOCIATES, INC., Depositor
By ALEX R. MEITZNER
________________________________________
Alex R. Meitzner
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
- --------------------- --------------------
DOUGLAS K. ROGERS Executive Vice )
- --------------------- President and Director )
Douglas K. Rogers
ALEX R. MEITZNER Chairman of the Board )
- --------------------- of Directors )
Alex R. Meitzner
ROBIN K. PINKERTON President, Secretary, )
- --------------------- Treasurer and Director ) ALEX R. MEITZNER
Robin K. Pinkerton -----------------------
Alex R. Meitzner
- ------------------------------------------------------------------------------
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
Exhibit 1.1(a)
RANSON UNIT INVESTMENT TRUSTS, SERIES 58
TRUST AGREEMENT
Dated: May 22, 1997
This Trust Agreement between Ranson & Associates, Inc., as Depositor
and Evaluator, and The Bank of New York, as Trustee, sets forth certain
provisions in full and incorporates other provisions by reference to the
document entitled "Standard Terms and Conditions of Trust for Corporate
Bond Trusts Sponsored by Ranson & Associates, Inc., Effective: February
4, 1997" (herein called the "Standard Terms and Conditions of Trust") and
such provisions as are set forth in full and such provisions as are
incorporated by reference constitute a single instrument. All references
herein to Articles and Sections are to Articles and Sections of the
Standard Terms and Conditions of Trust.
WITNESSETH THAT:
In consideration of the premises and of the mutual agreements herein
contained, the Depositor and the Trustee and the Evaluator agree as
follows:
PART I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the Provisions of Part ii hereof, all the provisions
contained in the Standard Terms and Conditions of Trust are herein
incorporated by reference in their entirety and shall be deemed to be a
part of this instrument as fully and to the same extent as though said
provisions had been set forth in full in this instrument.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
The following special terms and conditions are hereby agreed to:
(a) The Bonds defined in Section 1.01(4), listed in Schedule A
hereto, have been deposited in trust under this Trust Agreement.
(b) The fractional undivided interest in and ownership of each
Trust Fund represented by each Unit is the amount set forth under
"Essential Information-Fractional Undivided Interest per Unit" in
the Prospectus.
(c) The number of Units in each Trust is that amount set forth
under "Essential Information-Number of Units" in the Prospectus.
(d) The "First General Record Date" shall be the first "Record
Date" set forth under "Essential Information" in the Prospectus.
<PAGE>
(e) The amount of the second distribution of funds from the
Interest Account shall be that amount set forth under "Essential
Information-Interest Payments-First Payment per Unit" for each Trust
in the Prospectus.
(f) The term "Trust" as defined in Section 1.01(2) shall
include "Insured Corporate, Series 11" as defined in the Prospectus.
-2-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed.
RANSON & ASSOCIATES, INC., Depositor
and Evaluator
By ROBIN K. PINKERTON
----------------------------------
President
THE BANK OF NEW YORK, Trustee
By TED RUDICH
----------------------------------
Vice President
<PAGE>
SCHEDULE A
BONDS INITIALLY DEPOSITED
RANSON UNIT INVESTMENT TRUSTS, SERIES 58
(Note: Incorporated herein and made a part hereof is the
"Portfolio" as set forth in the Prospectus for each Trust.)
-4-
Exhibit 1.1(b)
RANSON UNIT INVESTMENT TRUSTS, SERIES 58
TRUST AGREEMENT
Dated: May 22, 1997
This Trust Agreement between Ranson & Associates, Inc., as Depositor
and Evaluator, and The Bank of New York, as Trustee, sets forth certain
provisions in full and incorporates other provisions by reference to the
document entitled "Standard Terms and Conditions of Trust for Government
Securities Trusts Sponsored by EVEREN Unit Investment Trusts, a service
of EVEREN Securities, Inc., Effective: May 8, 1996" (herein called the
"Standard Terms and Conditions of Trust") and such provisions as are set
forth in full and such provisions as are incorporated by reference
constitute a single instrument. All references herein to Articles and
Sections are to Articles and Sections of the Standard Terms and
Conditions of Trust.
WITNESSETH THAT:
In consideration of the premises and of the mutual agreements herein
contained, the Depositor and the Trustee and the Evaluator agree as
follows:
PART I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the Provisions of Part ii hereof, all the provisions
contained in the Standard Terms and Conditions of Trust are herein
incorporated by reference in their entirety and shall be deemed to be a
part of this instrument as fully and to the same extent as though said
provisions had been set forth in full in this instrument.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
The following special terms and conditions are hereby agreed to:
(a) The Securities defined in Section 1.01(15), listed in
Schedule A hereto, have been deposited in trust under this Trust
Agreement.
(b) The fractional undivided interest in and ownership of each
Trust Fund represented by each Unit is the amount set forth under
"Essential Information-Fractional Undivided Interest per Unit" in
the Prospectus.
(c) The number of Units in each Trust is that amount set forth
under "Essential Information-Number of Units" in the Prospectus.
<PAGE>
(d) The "First General Record Date" shall be the first "Record
Date" set forth under "Essential Information" in the Prospectus.
(e) The amount of the second distribution of funds from the
Interest Account shall be that amount set forth under "Essential
Information-Interest Payments-First Payment per Unit" for each Trust
in the Prospectus.
(f) The term "Trust" as defined in Section 1.01(17) shall
include "GNMA Portfolio, Series 8" and GNMA Portfolio, Series 9" as
defined in the Prospectus.
(g) Sections 1.01(4) and (6) shall be replaced with the
following:
(4) "Depositor" shall mean Ranson & Associates, Inc. and
its successors in interest, or any successor depositor
appointed as hereinafter provided.
(6) "Evaluator" shall mean Ranson & Associates, Inc. and
its successors in interest, or any successor evaluator
appointed as hereinafter provided.
-2-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed.
RANSON & ASSOCIATES, INC., Depositor
and Evaluator
By ROBIN K. PINKERTON
----------------------------------
President
THE BANK OF NEW YORK, Trustee
By TED RUDICH
----------------------------------
Vice President
<PAGE>
SCHEDULE A
BONDS INITIALLY DEPOSITED
RANSON UNIT INVESTMENT TRUSTS, SERIES 58
(Note: Incorporated herein and made a part hereof is the
"Portfolio" as set forth in the Prospectus for each Trust.)
-4-
Exhibit 1.1(c)
RANSON UNIT INVESTMENT TRUSTS, SERIES 58
TRUST AGREEMENT
Dated: May 22, 1997
This Trust Agreement between Ranson & Associates, Inc., as Depositor
and Evaluator, and The Bank of New York, as Trustee, sets forth certain
provisions in full and incorporates other provisions by reference to the
document entitled "Standard Terms and Conditions of Trust for Government
Securities Sponsored by EVEREN Unit Investment Trusts, a service of
EVEREN Securities, Inc., Effective: May 8, 1996" (herein called the
"Standard Terms and Conditions of Trust") and such provisions as are set
forth in full and such provisions as are incorporated by reference
constitute a single instrument. All references herein to Articles and
Sections are to Articles and Sections of the Standard Terms and
Conditions of Trust.
WITNESSETH THAT:
In consideration of the premises and of the mutual agreements herein
contained, the Depositor and the Trustee and the Evaluator agree as
follows:
PART I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the Provisions of Part ii hereof, all the provisions
contained in the Standard Terms and Conditions of Trust are herein
incorporated by reference in their entirety and shall be deemed to be a
part of this instrument as fully and to the same extent as though said
provisions had been set forth in full in this instrument.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
The following special terms and conditions are hereby agreed to:
(a) The Securities defined in Section 1.01(15), listed in
Schedule A hereto, have been deposited in trust under this Trust
Agreement.
(b) The fractional undivided interest in and ownership of each
Trust Fund represented by each Unit is the amount set forth under
"Essential Information-Fractional Undivided Interest per Unit" in
the Prospectus.
<PAGE>
(c) The number of Units in each Trust is that amount set forth
under "Essential Information-Number of Units" in the Prospectus.
(d) The "First General Record Date" shall be the first "Record
Date" set forth under "Essential Information" in the Prospectus.
(e) The amount of the second distribution of funds from the
Interest Account shall be that amount set forth under "Essential
Information-Interest Payments-First Payment per Unit" for each Trust
in the Prospectus.
(f) The term "Trust" as defined in Section 1.01(17) shall
include "U.S. Treasury Portfolio, Series 19" as defined in the
Prospectus.
(g) Sections 1.01(4) and (6) shall be replaced with the
following:
(4) "Depositor" shall mean Ranson & Associates, Inc. and
its successors in interest, or any successor depositor
appointed as hereinafter provided.
(6) "Evaluator" shall mean Ranson & Associates, Inc. and
its successors in interest, or any successor evaluator
appointed as hereinafter provided.
-2-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed.
RANSON & ASSOCIATES, INC., Depositor
and Evaluator
By ROBIN K. PINKERTON
----------------------------------
President
THE BANK OF NEW YORK, Trustee
By TED RUDICH
----------------------------------
Vice President
<PAGE>
SCHEDULE A
BONDS INITIALLY DEPOSITED
RANSON UNIT INVESTMENT TRUSTS, SERIES 58
(Note: Incorporated herein and made a part hereof is the
"Portfolio" as set forth in the Prospectus for each Trust.)
-4-
EXHIBIT 3.1
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
May 22, 1997
Ranson & Associates, Inc.
250 North Rock Road, Suite 150
Wichita, Kansas 67206
Re: Ranson Unit Investment Trusts Series 58
Gentlemen:
We have served as counsel for Ranson & Associates, Inc., as Sponsor
and Depositor of Ranson Unit Investment Trusts Series 58 (the "Fund"), in
connection with the preparation, execution and delivery of Trust Agreements
dated the date of this opinion between Ranson & Associates, Inc., as
Depositor, and The Bank of New York, as Trustee, pursuant to which the
Depositor has delivered to and deposited the Bonds listed in the Schedules
to the Trust Agreements with the Trustee and pursuant to which the Trustee
has issued to or on the order of the Depositor a certificate or certificates
representing all the Units of fractional undivided interest in, and
ownership of, the Fund, created under said Trust Agreements.
In connection therewith we have examined such pertinent records and
documents and matters of law as we have deemed necessary in order to enable
us to express the opinions hereinafter set forth.
Based upon the foregoing, we are of the opinion that:
1. The execution and delivery of the Trust Agreements
and the execution and issuance of certificates evidencing the
Units of the Fund have been duly authorized; and
2. The certificates evidencing the Units of the Fund,
when duly executed and delivered by the Depositor and the
Trustee in accordance with the aforementioned Trust Agreements,
will constitute valid and binding obligations of the Fund and
the Depositor in accordance with the terms thereof.
<PAGE>
-2-
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement (File No. 333-26809) relating to the Units referred
to above and to the use of our name and to the reference to our firm in said
Registration Statement and in the related Prospectus.
Respectfully submitted,
CHAPMAN AND CUTLER
EXHIBIT 3.2
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
May 22, 1997
Ranson & Associates, Inc.
250 North Rock Road, Suite 150
Wichita, Kansas 67206
The Bank of New York
101 Barclay Street
New York, New York 10286
Re: Ranson Unit Investment Trusts, Series 58
(Insured Corporate, Series 11)
Gentlemen:
We have acted as counsel for Ranson Unit Investment Trusts, a
service of Ranson & Associates, Inc., as Sponsor and Depositor of Ranson
Unit Investment Trusts Series 58 (the "Fund") including Insured
Corporate, Series 11 (the "Trust"), in connection with the issuance of
Units of fractional undivided interest in the Trust, under a Trust
Agreement dated May 22, 1997 (the "Indenture") between Ranson &
Associates, Inc., as Depositor and Evaluator, and The Bank of New York,
as Trustee.
In this connection, we have examined the Registration Statement, the
Prospectus, the Indenture, and such other instruments and documents as we
have deemed pertinent. The assets of the Trust will consist of
portfolios of intermediate and long-term corporate debt obligations
issued by utility companies (the "Corporate Bonds") and "Zero coupon"
U.S. Treasury bonds (the "Treasury Bonds") (collectively, the
"Obligations") as set forth in the Prospectus. All Obligations have been
issued after July 18, 1984. For purposes of the opinions set forth
below, we have assumed that interest on each of the Obligations is
includable in gross income for federal income tax purposes.
Based upon the foregoing and upon an investigation of such matters
of law as we consider to be applicable, we are of the opinion that, under
existing Federal income tax law:
(i) The Trusts are not associations taxable as
corporations for Federal income tax purposes but will be
governed by the provisions of subpart E, subchapter J (relating
to trusts) of chapter 1, Internal Revenue Code of 1986 (the
"Code").
<PAGE>
-2-
(ii) Each Unitholder will be considered as owning
a pro rata share of each asset of the Trusts for Federal income
tax purposes. Under subpart E, subchapter J of chapter 1 of
the Code, income of the Trusts will be treated as income of
each Unitholder. Each Unitholder will be considered to have
received his pro rata share of income derived from each Trust
asset when such income is considered to be received by the
Trust. Each Unitholder will also be required to include in
taxable income for Federal income tax purposes, original issue
discount with respect to his interest in any Obligation held by
the Trust at the same time and in the same manner as though the
Unitholder were the direct owner of such interest. Original
issue discount will be treated as zero with respect to
Corporate Bonds if it is "de minimis" within the meaning of
Section 1273 of the Code and, based upon a Treasury Regulation
(the "Regulation") which was issued on December 28, 1992
regarding the stripped bond rules of the Code, original issue
discount with respect to a Treasury Bond will be treated as
zero if it is "de minimis" as determined thereunder. If a
Corporate Bond is a "high-yield discount obligation" within the
meaning of Section 163(e)(5) of the Code, certain special rules
may apply. A Unitholder may elect to include in taxable income
for Federal income tax purposes, market discount as it accrues
with respect to his interest in any Corporate Bond held by a
Trust which he is considered as having acquired with market
discount at the same time and in the same manner as though the
Unitholder were the direct owner of such interest.
(iii) The price a Unitholder pays for his Units,
generally including sales charges, is allocated among his pro
rata portion of each Obligation held by a Trust (in proportion
to the fair market values thereof on the valuation date closest
to the date the Unitholder purchases his Units), in order to
determine his tax basis for his pro rata portion of each
Obligation held by such Trust. The Treasury Bonds are treated
as bonds that were originally issued at an original issue
discount. Because the Treasury Bonds represent interests in
"stripped" U.S. Treasury bonds, a Unitholder's initial cost for
his pro rata portion of each Treasury Bond held by a Trust
(determined at the time he acquires his Units, in the manner
described above) shall be treated as its "purchase price" by
the Unitholder. Under the special rules relating to stripped
bonds, original issue discount applicable to the Treasury Bonds
is effectively treated as interest for Federal income tax
purposes and the amount of original issue discount in this case
is generally the difference between the Bond's purchase price
and its stated redemption price at maturity. A Unitholder will
be required to include in gross income for each taxable year
the sum of his daily portions of original issue discount
attributable to the Treasury Bonds held by a Trust as such
original issue discount accrues and will in general be subject
to Federal income tax with respect to the total amount of such
original issue discount that accrues for such year even though
the income is not distributed to the Unitholders during such
year to the extent it is greater than or equal to the "de
minimis" amount described below. To the extent the amount of
<PAGE>
-3-
such discount is less than the respective "de minimis" amount,
such discount shall be treated as zero. In general, original
issue discount accrues daily under a constant interest rate
method which takes into account the semi-annual compounding of
accrued interest. In the case of Treasury Bonds this method
will generally result in an increasing amount of income to the
Unitholders each year.
(iv) Each Unitholder will have a taxable event
when the Trustee disposes of a Trust asset (whether by sale,
exchange, liquidation, redemption, payment on maturity or
otherwise) or when the Unitholder redeems or sells his Units.
A Unitholder's tax basis in his Unit will equal his tax basis
in his pro rata portion of all the assets of the Trust. Such
basis is determined (before the adjustments described below) by
apportioning the tax basis for his Units among each of the
Trust assets according to their values as of the valuation date
nearest the date on which he purchased such Units. Unitholders
must reduce the tax basis of their Units for their share of
accrued interest received, if any, on Obligations delivered
after the date the Unitholders pay for their Units to the
extent that such interest accrued on such Obligations before
the date the Trust acquired ownership of the Obligations (and
the amount of this reduction may exceed the amount of accrued
interest paid to the sellers) and, consequently, such
Unitholders may have an increase in taxable gain or reduction
in capital loss upon the disposition of such Units. Gain or
loss upon the sale or redemption of Units is measured by
comparing the proceeds of such redemption or sale with the
adjusted basis of the Units. If the Trustee disposes of
Obligations (whether by sale, exchange, payment on maturity,
redemption or otherwise), gain or loss is recognized to the
Unitholder (subject to various nonrecognition provisions of the
Code). The amount of any such gain or loss is measured by
comparing the Unitholder's pro rata share of the total proceeds
from such disposition with his basis for his fractional
interest in the asset disposed of. The basis of each Unit and
of each Obligation which was issued with original issue
discount (including the Treasury Bonds) (or which had market
discount) must be increased by the amount of accrued original
issue discount (and market discount if the Unitholder elects to
include market discount in income as it accrues) and the basis
of each Unit and of each Obligation which was purchased by a
Trust at a premium must be reduced by the annual amortization
of bond premium which the Unitholder has properly elected to
amortize under Section 171 of the Code. The tax basis
reduction requirements of the Code relating to amortization of
bond premium may, under some circumstances, result in the
Unitholder realizing a taxable gain when his Units are sold or
redeemed for an amount equal to or less than his original cost.
Each Unitholder's pro rata share of each expense paid by a Trust is
deductible by the Unitholder to the same extent as though the expense had
been paid directly by him. It should be noted that as a result of the
Tax Reform Act of 1986, certain miscellaneous itemized deductions, such
as investment expenses, tax return preparation fees and employee business
<PAGE>
-4-
expenses will be deductible by an individual only to the extent they
exceed 2% of such individual's adjusted gross income (similar
limitations also apply to estates and trusts). Unitholders may be
required to treat some or all of the expenses of the Trust as
miscellaneous itemized deductions subject to this limitation.
The Code provides a complex set of rules governing the accrual of
original issue discount, including special rules relating to "stripped"
debt instruments such as the Treasury Bonds. These rules provide that
original issue discount generally accrues on the basis of a constant
compound interest rate over the term of the Obligations. Special rules
apply if the purchase price of an Obligation exceeds its original issue
price plus the amount of original issue discount which would have
previously accrued, based upon its issue price (its "adjusted issue
price"). Similarly, these special rules would apply to a Unitholder if
the tax basis of his pro rata portion of an Obligation issued with
original issue discount exceeds his pro rata portion of its adjusted
issue price. In addition, as discussed above, the Regulation provides
that the amount of original issue discount on a stripped bond is
considered zero if the actual amount of original issue discount on such
stripped bond as determined under Section 1286 of the Code is less than a
"de minimis" amount, which, the Regulation provides, is the product of
(i) 0.25 percent of the stated redemption price at maturity and (ii) the
number of full years from the date the stripped bond is purchased
(determined separately for each new purchaser thereof) to the final
maturity date of the bond.
It is possible that a Corporate Bond that has been issued at an
original issue discount may be characterized as a "high-yield discount
obligation" within the meaning of Section 163(e)(5) of the Code. To the
extent that such an obligation is issued at a yield in excess of six
percentage points over the applicable Federal rate, a portion of the
original issue discount on such obligation will be characterized as a
distribution on stock (e.g., dividends) for purposes of the dividends
received deduction which is available to certain corporations with
respect to certain dividends received by such corporations.
If a Unitholder's tax basis in his pro rata portion of any Corporate
Bond held by a Trust is less than his allocable portion of such Corporate
Bond's stated redemption price at maturity (or, if issued with original
issue discount, his allocable portion of its revised issue price), such
difference will constitute market discount unless the amount of market
discount is "de minimis" as specified in the Code. To the extent the
amount of such discount is less than the respective "de minimis" amount,
such discount shall be treated as zero. Market discount accrues daily
computed on a straight line basis, unless the Unitholder elects to
calculate accrued market discount under a constant yield method. The
market discount rules do not apply to Treasury Bonds because they are
stripped debt instruments subject to special original issue discount
rules as discussed in paragraph (iii).
Accrued market discount is generally includible in taxable income of
the Unitholders as ordinary income for Federal tax purposes upon the
receipt of serial principal payments on Corporate Bonds held by a Trust,
on the sale, maturity or disposition of such Corporate Bonds by the Trust
and on the sale of a Unitholder's Units unless a Unitholder elects to
<PAGE>
-5-
include the accrued market discount in taxable income as such discount
accrues. If a Unitholder does not elect to annually include accrued
market discount in taxable income as it accrues, deductions of any
interest expense incurred by the Unitholder to purchase or carry his
Units will be reduced by such accrued market discount. In general, the
portion of any interest which is not currently deductible would
ultimately be deductible when the accrued market discount is included in
income.
The tax basis of a Unitholder with respect to his interest in an
Obligation is increased by the amount of original issue discount (and
market discount, if the Unitholder elects to include market discount, if
any, on the Obligations held by the Trust in income as it accrues)
thereon properly included in the Unitholder's gross income as determined
for Federal income tax purposes and reduced by the amount of any
amortized premium which the Unitholder has properly elected to amortize
under Section 171 of the Code. A Unitholder's tax basis in his Units
will equal his tax basis in his pro rata portion of all of the assets of
the Trust.
A Unitholder will recognize taxable gain (or loss) when all or part
of the pro rata interest in an Obligation is disposed of for an amount
greater (or less) than his tax basis therefor in a taxable transaction
subject to various non-recognition provisions of the Code.
As previously discussed, gain attributable to any Corporate Bond
deemed to have been acquired by the Unitholder with market discount will
be treated as ordinary income to the extent the gain does not exceed the
amount of accrued market discount not previously taken into income. The
tax basis reduction requirements of the Code relating to amortization of
bond premium may, under certain circumstances, result in the Unitholder
realizing a taxable gain when his Units are sold or redeemed for an
amount equal to or less than his original cost.
If a Unitholder disposes of a Unit, he is deemed thereby to have
disposed of his entire pro rata interest in all Trust assets including
his pro rata portion of all of the Corporate Bonds represented by the
Unit. This may result in a portion of the gain, if any, on such sale
being taxable as ordinary income under the market discount rules
(assuming no election was made by the Unitholder to include market
discount in income as it accrues) as previously discussed.
"The Revenue Reconciliation Act of 1993" (the "Tax Act") raised tax
rates on ordinary income while capital gains remain subject to a 28
percent maximum stated rate for taxpayers other than corporations.
Because some or all capital gains are taxed at a comparatively lower rate
under the Tax Act, the Tax Act includes a provision that recharacterizes
capital gains as ordinary income in the case of certain financial
transactions that are "conversion transaction" effective for transactions
entered into after April 30, 1993.
A Unitholder who is a foreign investor (i.e., an investor other than
a U.S. citizen or resident or U.S. corporation, partnership, estate or
trust) will not be subject to United States Federal income taxes,
<PAGE>
-6-
including withholding taxes on interest income (including any original
issue discount) on, or any gain from the sale or other disposition of his
pro rata interest in any Obligation held by a Trust or the sale of his
Units provided that all of the following conditions are met:
(i) the interest income or gain is not effectively
connected with the conduct by the foreign investor of a trade or
business within the United States;
(ii) if the interest is United States source income (which is
the case for most securities issued by United States issuers), the
Obligation is issued after July 18, 1984, the foreign investor does
not own, directly or indirectly, 10% or more of the total combined
voting power of all classes of voting stock of the issuer of the
Obligation and the foreign investor is not a controlled foreign
corporation related (within the meaning of Section 864(d)(4) of the
Code) to the issuer of the Obligation, or
(iii) with respect to any gain, the foreign investor (if an
individual) is not present in the United States for 183 days or more
during his or her taxable year; and
(iv) the foreign investor provides all certification which
may be required of his status.
It should be noted that the "Revenue Reconciliation Act of 1993,"
includes a provision which eliminates the exemption from United States
taxation, including withholding taxes, for certain "contingent interest."
This provision applies to interest received after December 31, 1993. No
opinion is expressed herein regarding the potential applicability of this
provision and whether United States taxation or withholding taxes could
be imposed with respect to income derived from the Units as a result
thereof.
The scope of this opinion is expressly limited to the matters set
forth herein, and, except as expressly set forth above, we express no
opinion with respect to any other taxes, including foreign, state or
local taxes or collateral tax consequences with respect to the purchase,
ownership and disposition of Units.
Very truly yours
CHAPMAN AND CUTLER
MJK/slm
EXHIBIT 3.2
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
May 22, 1997
Ranson & Associates, Inc.
250 North Rock Road, Suite 150
Wichita, Kansas 67206
The Bank of New York
101 Barclay Street
New York, New York 10286
Re: Ranson Unit Investment Trusts Series 58
U.S. Treasury Portfolio, Series 19
Gentlemen:
We have acted as counsel for Ranson Unit Investment Trusts, a
service of Ranson & Associates, Inc., Depositor of Ranson Unit Investment
Trusts Series 58 (the "Fund") including U.S. Treasury Portfolio, Series
19 (the "Trust Fund"), in connection with the issuance of Units of
fractional undivided interest in the Trust Fund, under a Trust Agreement,
dated May 22, 1997 (the "Indenture"), between Ranson & Associates, Inc.,
as Depositor, and The Bank of New York, as Trustee.
In this connection, we have examined the Registration Statement, the
form of Prospectus proposed to be filed with the Securities and Exchange
Commission, the Indenture and such other instruments and documents as we
have deemed pertinent. The opinions expressed herein assume that each
Trust will be administered, and investments by a Trust from proceeds of
subsequent deposits, if any, will be made, in accordance with the terms
of the Indenture. Each Trust holds Treasury Obligations and may include
"stripped U.S. treasury bonds" (the "Stripped Treasury Securities").
Based upon the foregoing and upon an investigation of such matters
of law as we consider to be applicable we are of the opinion that, under
existing Federal income tax law:
(i) The Trust is not an association taxable as a corporation
but will be governed by the provisions of Subchapter J (relating to
trusts) of Chapter 1, Internal Revenue Code of 1986 (the "Code").
(ii) Each Unitholder will be considered the owner of a pro rata
portion of each U.S. Treasury Obligation in the Trust and will be
considered to have received the interest on his pro rata portion of
<PAGE>
-2-
each U.S. Treasury Obligation when interest on such U.S. Treasury
Obligation is received by the Trust. Each Unitholder will also be
required to include in taxable income for federal income tax
purposes, original issue discount with respect to his interest in
any U.S. Treasury Obligation held by the Trust which was issued with
original issue discount at the same time and in the same manner as
though the Unitholder were the direct owner of such interest.
Original issue discount will be treated as zero with respect to the
U.S. Treasury Obligations if it is "de minimis" within the meaning
of Section 1273 of the Code and, based upon a Treasury Regulation
(the "Regulation") which was issued on December 28, 1992 regarding
the stripped bond rules of the Code, original issue discount with
respect to a Stripped Treasury Security will be treated as zero if
it is "de minimis" as determined thereunder.
(iii) Each Unitholder will be considered the owner of a pro
rata portion of each asset in the Trust. The total cost to a
Unitholder of his Units, including sales charges, is allocated among
his pro rata portion of each asset held by the Trust Fund (in
proportion to the fair market values thereof on the valuation date
closest to the date the Unitholder purchases Units) in order to
determine his initial tax basis for his pro rata portion of each
asset held by the Trust. The Stripped Treasury Securities are
treated as bonds that were originally issued at an original issue
discount. Because the Stripped Treasury Securities represent
interests in "stripped" U.S. Treasury bonds, a Unitholder's initial
basis for his pro rata portion of each Stripped Treasury Security
held by the Trust (determined at the time he acquires his units, in
the manner described above) shall be treated as its "purchase price"
by the Unitholder. Under the special rules relating to stripped
bonds, original issue discount applicable to the Stripped Treasury
Securities is effectively treated as interest for Federal income tax
purposes and the amount of original issue discount in this case is
generally the difference between the bond's purchase price and its
stated redemption price at maturity. A Unitholder will be required
to include in gross income for each taxable year the sum of his
daily portions of original issue discount attributable to the
Stripped Treasury Securities held by the Trust as such original
issue discount accrues and will in general be subject to Federal
income tax with respect to the total amount of such original issue
discount that accrues for such year even though the income is not
distributed to the Unitholders during such year to the extent it is
greater than or equal to the "de minimis" amount described above.
To the extent the amount of such discount is less than the
respective "de minimis" amount, such discount shall be treated as
zero. In general, original issue discount accrues daily under a
constant interest rate method which takes into account the semi-
annual compounding of accrued interest. In the case of Stripped
Treasury Securities this method will generally result in an
increasing amount of income to the Unitholders each year. A
Unitholder's tax basis for his pro rata portion of each asset held
by the Trust may be subject to adjustment as discussed in paragraph
(v) hereof.
<PAGE>
-3-
(iv) The Unitholder's aliquot share of the total proceeds
received on the disposition of, or principal paid with respect to, a
U.S. Treasury Obligation held by the Trust will constitute ordinary
income (which will be treated as interest income for most purposes)
to the extent it does not exceed the accrued market discount on such
U.S. Treasury Obligation that has not previously been included in
taxable income by such Unitholder. A Unitholder may generally elect
to include market discount in income as such discount accrues. In
general, market discount is the excess, if any, of the Unitholder's
pro rata portion of the outstanding principal balance of a U.S.
Treasury Obligation over the Unitholder's initial tax basis for such
pro rata portion, determined at the time such Unitholder acquires
his Units. However, market discount with respect to any U.S.
Treasury Obligation will generally be considered zero if it amounts
to less than .25% of the Obligation's stated redemption price at
maturity times the number of years to maturity. The market discount
rules do not apply to Stripped Treasury Securities because they are
stripped debt instruments subject to special original issue discount
rules as discussed above. If a Unitholder sells his Units, gain, if
any, will constitute ordinary income to the extent of the aggregate
of the accrued market discount on the Unitholder's pro rata portion
of each U.S. Treasury Obligation that is held by the Trust that has
not previously been included in taxable income by such Unitholder.
In general, market discount accrues on a ratable basis unless the
Unitholder elects to accrue such discount on a constant interest
rate basis. However, no opinion is expressed herein regarding the
precise manner in which market discount accrues. The deduction by a
Unitholder for any interest expense incurred to purchase or carry
Units will be reduced by the amount of any accrued market discount
that has not yet been included in taxable income by such Unitholder.
In general, the portion of any interest expense which is not
currently deducible would be ultimately deductible when the accrued
market discount is included in income.
(v) As discussed in paragraph (iv) hereof, if a Unitholder
sells his Units, gain, if any, will constitute ordinary income to
the extent of the aggregate of the accrued market discount (which
has not previously been included in such Unitholder's taxable
income) with respect to the Unitholder's pro rata portion of each
U.S. Treasury Obligation held by the Trust. Any other gains (or
losses) will be capital gains (or losses) except in the case of a
dealer or a financial institution, and will be long-term if the
Unitholder has held his Units for more than one year. A Unitholder
will recognize taxable gains (or losses) (a) upon redemption or sale
of his Units, (b) if the Trustee disposes of an asset or (c) upon
receipt by the Trustee of payments of principal on the U.S. Treasury
Obligations. The amount of any such gain (or loss) is measured by
comparing the Unitholder's pro rata share of the total proceeds from
the transaction with his adjusted tax basis in his Units or his pro
rata interest in the asset as the case may be, and then reducing
such gain, if any, to the extent characterized as ordinary income
resulting from accrued market discount as discussed above. A
Unitholder's tax basis in his Units and his pro rata portion of each
of the underlying assets of the Trust may be adjusted to reflect the
accrual of market discount (if the Unitholder has elected to include
such discount in income as it accrues), original issue discount and
<PAGE>
-4-
amortized bond premium, if any. The tax basis reduction
requirements of said Code relating to amortization of bond premium
may, under some circumstances, result in the Unitholder realizing a
taxable gain when his Units are sold or redeemed for an amount equal
to his original cost. In addition, Unitholders must reduce the tax
basis of their Units and their pro rata portion of the underlying
assets of the Trust for their share of accrued interest received by
the Trust, if any, on U.S. Treasury Obligations delivered after the
Unitholders pay for their Units to the extent that such interest
accrued on such U.S. Treasury Obligations before the date the Trust
acquired ownership of the U.S. Treasury Obligations (and the amount
of this reduction may exceed the amount of accrued interest paid to
the seller) and, consequently, such Unitholders may have an increase
in taxable gain or reduction in capital loss upon the disposition of
such Units or such U.S. Treasury Obligations.
(vi) The Code provides that "miscellaneous itemized deductions"
are allowable only to the extent that they exceed two percent of an
individual taxpayer's adjusted gross income. Miscellaneous itemized
deductions subject to this limitation under present law include a
Unitholder's pro rata share of expenses paid by the Trust, including
fees of the Trustee and the Evaluator but does not include
amortizable bond premium on U.S. Treasury Obligations held by the
Trust.
The Code provides a complex set of rules governing the accrual of
original issue discount, including special rules relating to "stripped"
debt instruments such as the Stripped Treasury Securities. These rules
provide that original issue discount generally accrues on the basis of a
constant compound interest rate over the term of the Stripped Treasury
Security. Special rules apply if the purchase price of a U.S. Treasury
Obligation exceeds its original issue price plus the amount of original
issue discount which would have previously accrued, based upon its issue
price (its "adjusted issue price"). Similarly, these special rules would
apply to a Unitholder if the tax basis of his pro rata portion of a U.S.
Treasury Obligation issued with original issue discount exceeds his pro
rata portion of its adjusted issue price. In addition, as discussed
above, the Regulation provides that the amount of original issue discount
on a stripped bond is considered zero if the actual amount of original
issue discount on such stripped bond as determined under Section 1286 of
the Code is less than a "de minims" amount, which the Regulation
provides, is the product of (i) 0.25 percent of the stated redemption
price at maturity and (ii) the number of full years from the date the
stripped bond is purchased (determined separately for each new purchaser
thereof) to the final maturity date of the bond.
For taxable years beginning after December 31, 1986 and before
January 1, 1996, certain corporations may be subject to the environmental
tax (the "Superfund Tax") imposed by Section 59A of the Code. Interest
received from, and gains recognized from the disposition of, a security
by the Trust or the sale of Units by a Unitholder will be included by
such corporations in the computation of the Superfund Tax. Under current
Code provisions, the Superfund Tax does not apply to tax years beginning
on or after January 1, 1996. However, the Superfund Tax could be
extended retroactively.
<PAGE>
-5-
A Unitholder who is a foreign investor (i.e., an investor other than
a U.S. citizen or resident or a U.S. corporation, partnership, estate or
trust) will not be subject to United States Federal income taxes,
including withholding taxes on interest income (including any original
issue discount) on, or any gain from the sale or other disposition of his
pro rata interest in any U.S. Treasury Obligation held by the Trust or
the sale of his Units provided that all of the following conditions are
met:
(i) the interest income or gain is not effectively connected
with the conduct by the foreign investor of a trade or business
within the United States;
(ii) with respect to any gain, the foreign investor (if an
individual) is not present in the United States for 183 days or more
during his or her taxable year;
(iii) the U.S. Treasury Obligation was issued after July 18,
1984; and
(iv) the foreign investor provides all certification which may
be required of his status and of the matters contained in clauses
(i) and (ii) above.
The "Revenue Reconciliation Act of 1993" (the "Tax Act") raised tax
rates on ordinary income while capital gains remain subject to 28 percent
maximum stated rate for taxpayers other than corporations. Because some
of all capital gains are taxed at a comparatively lower rate under the
Tax Act, the Tax Act includes a provision that recharacterizes capital
gains as ordinary income in the case of certain financial transactions
that are "conversion transactions" effective for transactions entered
into after April 30, 1993.
The scope of this opinion is expressly limited to the matters set
forth herein, and, except as expressly set forth above, we express no
opinion with respect to any other taxes, including foreign, state or
local taxes or collateral tax consequences with respect to the purchase,
ownership and disposition of Units.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement (File No. 333-26809) relating to the Units
referred to above and to the use of our name and to the reference to our
firm in said Registration Statement and in the related Prospectus.
Very truly yours,
CHAPMAN AND CUTLER
EXHIBIT 4.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm as experts under the caption
"General Information-Independent Auditors" and to the use of our report
dated May 22, 1997 in Amendment No. 1 to the Registration Statement (Form
S-6 File No. 333-26809) and related Prospectus of Ranson Unit Investment
Trusts, Series 58.
ALLEN, GIBBS & HOULIK, L.C.
Wichita, Kansas
May 22, 1997
EXHIBIT 4.2
CANTOR FITZGERALD
ONE WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(212) 938-5000
May 22, 1997
Ranson & Associates, Inc.
250 North Rock Road, Suite 150
Wichita, Kansas 67206
Re: Ranson Unit Investment Trusts, Series 58
Gentlemen:
We have examined the listing of securities within Registration
Statement File No. 333-26809 for the above captioned trust. We hereby
acknowledge that Cantor Fitzgerald & Co. ("Cantor") will act as the
evaluator for the trust pursuant to the terms and conditions of the
Information Evaluation Service Agreement between Cantor and Ranson &
Associates, Inc. ("Ranson") dated as of October 13, 1995 (the "IES
Agreement"). We hereby consent to the use in the Registration Statement
of the reference to Cantor Fitzgerald & Co. as evaluator.
You acknowledge that this letter shall not confer upon you any
rights or impose on Cantor any obligations, other than those expressly
set forth in the IES Agreement.
You are hereby authorized to file a copy of this letter with the
Securities and Exchange Commission.
Very truly yours,
CANTOR FITZGERALD & CO.
By: ARTHUR J. GILLIN
-------------------------
Arthur J. Gillin
Managing Director
Acknowledged and Agreed:
RANSON & ASSOCIATES, INC.
By: ROBIN K. PINKERTON
---------------------------
Robin K. Pinkerton
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from
Amendment number 1 to form S-6 and is qualified in its entirety by
reference to such Amendment number 1 to form S-6.
</LEGEND>
<SERIES>
<NUMBER> 11
<NAME> INSURED CORPORATE SERIES 11
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> MAY-22-1997
<PERIOD-START> MAY-22-1997
<PERIOD-END> MAY-22-1997
<INVESTMENTS-AT-COST> 762,201
<INVESTMENTS-AT-VALUE> 762,201
<RECEIVABLES> 22,029
<ASSETS-OTHER> 784,230
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> (22,029)
<TOTAL-LIABILITIES> (22,029)
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 762,201
<SHARES-COMMON-STOCK> 80,000
<SHARES-COMMON-PRIOR> 80,000
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 762,201
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from
Amendment number 1 to form S-6 and is qualified in its entirety by
reference to such Amendment number 1 to form S-6.
</LEGEND>
<SERIES>
<NUMBER> 08
<NAME> GNMA SERIES 8
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> MAY-22-1997
<PERIOD-START> MAY-22-1997
<PERIOD-END> MAY-22-1997
<INVESTMENTS-AT-COST> 194,881
<INVESTMENTS-AT-VALUE> 194,881
<RECEIVABLES> 763
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 195,644
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> (763)
<TOTAL-LIABILITIES> (763)
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 194,881
<SHARES-COMMON-STOCK> 20,000
<SHARES-COMMON-PRIOR> 20,000
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 194,881
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
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<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
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<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
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<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from
Amendment number 1 to form S-6 and is qualified in its entirety by
reference to such Amendment number 1 to form S-6.
</LEGEND>
<SERIES>
<NUMBER> 09
<NAME> GNMA SERIES 9
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> MAY-22-1997
<PERIOD-START> MAY-22-1997
<PERIOD-END> MAY-22-1997
<INVESTMENTS-AT-COST> 196,197
<INVESTMENTS-AT-VALUE> 196,197
<RECEIVABLES> 846
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 197,043
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> (846)
<TOTAL-LIABILITIES> (846)
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 196,197
<SHARES-COMMON-STOCK> 20,000
<SHARES-COMMON-PRIOR> 20,000
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 196,197
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from
Amendment number 1 to form S-6 and is qualified in its entirety by
reference to such Amendment number 1 to form S-6.
</LEGEND>
<SERIES>
<NUMBER> 19
<NAME> U.S. TREASURY SERIES 19
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> MAY-22-1997
<PERIOD-START> MAY-22-1997
<PERIOD-END> MAY-22-1997
<INVESTMENTS-AT-COST> 493,863
<INVESTMENTS-AT-VALUE> 493,863
<RECEIVABLES> 8,819
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 502,682
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> (8,819)
<TOTAL-LIABILITIES> (8,819)
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 493,863
<SHARES-COMMON-STOCK> 50,000
<SHARES-COMMON-PRIOR> 50,000
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 493,863
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
