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DEFINED ASSET FUNDSSM
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CORPORATE INCOME FUND
INTERMEDIATE TERM SERIES--51
(A UNIT INVESTMENT TRUST)
O PORTFOLIO OF INTERMEDIATE TERM CORPORATE BONDS
O DESIGNED FOR HIGH CURRENT INCOME
O MONTHLY INCOME DISTRIBUTIONS
O U.S. TAX EXEMPT FOR MANY FOREIGN HOLDERS
SPONSORS:
Merrill Lynch,
Pierce, Fenner & Smith -------------------------------------------------
Incorporated The Securities and Exchange Commission has not
Salomon Smith Barney Inc. approved or disapproved these Securities or
Prudential Securities passed upon the adequacy of this prospectus. Any
Incorporated representation to the contrary is a criminal
PaineWebber Incorporated offense.
Dean Witter Reynolds Inc. Prospectus dated February 26, 1999.
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Def ined Asset FundsSM
Defined Asset FundsSM is America's oldest and largest family of unit investment
trusts, with over $115 billion sponsored over the last 25 years. Defined Asset
Funds has been a leader in unit investment trust research and product
innovation. Our family of Funds helps investors work toward their financial
goals with a full range of quality investments, including municipal, corporate
and government bond portfolios, as well as domestic and international equity
portfolios.
Defined Asset Funds offer a number of advantages:
o A disciplined strategy of buying and holding with a long-term view is the
cornerstone of Defined Asset Funds.
o Fixed portfolio: Defined Funds follow a buy and hold investment strategy;
funds are not managed and portfolio changes are limited.
o Defined Portfolios: We choose the stocks and bonds in advance, so you know
what you're investing in.
o Professional research: Our dedicated research team seeks out stocks or bonds
appropriate for a particular fund's objectives.
o Ongoing supervision: We monitor each portfolio on an ongoing basis.
No matter what your investment goals, tolerance for risk or time horizon,
there's probably a Defined Asset Fund that suits your investment style. Your
financial professional can help you select a Defined Asset Fund that works best
for your investment portfolio.
THE FINANCIAL INFORMATION IN THIS PROSPECTUS IS AS OF THE EVALUATION DATE.
NOVEMBER 30, 1998.
CONTENTS
PAGE
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Risk/Return Summary..................................... 3
What You Can Expect From Your Investment................ 6
Monthly Income....................................... 6
Return Figures....................................... 6
Records and Reports.................................. 6
The Risks You Face...................................... 7
Interest Rate Risk................................... 7
Call Risk............................................ 7
Reduced Diversification Risk......................... 7
Liquidity Risk....................................... 7
Concentration Risk................................... 7
Bond Quality Risk.................................... 7
Litigation Risk...................................... 7
Selling or Exchanging Units............................. 8
Sponsors' Secondary Market........................... 8
Selling Units to the Trustee......................... 8
Exchange Option...................................... 8
How The Fund Works...................................... 9
Pricing.............................................. 9
Evaluations.......................................... 9
Income............................................... 9
Expenses............................................. 9
Portfolio Changes.................................... 10
Fund Termination..................................... 10
Certificates......................................... 10
Trust Indenture...................................... 10
Legal Opinion........................................ 11
Auditors............................................. 11
Sponsors............................................. 11
Trustee.............................................. 12
Underwriters' and Sponsors' Profits.................. 12
Public Distribution.................................. 12
Code of Ethics....................................... 12
Year 2000 Issues..................................... 12
Taxes................................................... 12
Supplemental Information................................ 13
Financial Statements.................................... D-1
2
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RISK/RETURN SUMMARY
1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks high current interest income by investing in
a fixed portfolio consisting primarily of corporate bonds
with an estimated average life of approximately 10 years.
2. WHAT ARE CORPORATE BONDS?
Corporate bonds are bonds issued by companies, governments
or other institutions to raise money to use in their
business or to fund their activities. In return, they pay a
fixed rate of interest and principal at maturity.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
O The Fund plans to hold to maturity 10 intermediate-term
corporate bonds with a current aggregate face amount of
$17,825,000.
o The Fund is a unit investment trust which means that,
unlike a mutual fund, the Fund's portfolio is not managed.
o When the bonds were initially deposited they were rated A
or better by Standard & Poor's, Moody's or Fitch. The
credit quality of the bonds may currently be lower.
o Many of the bonds can be called at a premium declining over
time to par value. Some bonds may be called earlier at par
for extraordinary reasons.
The Portfolio consists of corporate bonds of the following
types of issuers:
APPROXIMATE
PORTFOLIO
PERCENTAGE
o Financial Institutions 79%
o Manugacturing 3%
o Natural Resources 8%
o Retailing 10%
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE FUND. THIS CAN
HAPPEN FOR VARIOUS REASONS, INCLUDING:
o Rising interest rates, an issuer's worsening financial
condition or a drop in bond ratings can reduce the price of
your units.
o Because the Fund is concentrated in financial institution
bonds, adverse developments in these industries may affect
the value of your units.
o Assuming no changes in interest rates, when you sell your
units, they will generally be worth less than your cost
because your cost included a sales fee.
o The Fund will receive early returns of principal if bonds
are called or sold before they mature. If this happens your
income will decline and you may not be able to reinvest the
money you receive at as high a yield or as long a maturity.
5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want current monthly income. You will benefit
from a professionally selected and supervised portfolio
whose risk is reduced by investing in bonds of several
different issuers.
The Fund is not appropriate for you if you want a
speculative investment that changes to take advantage of
market movements or if you cannot tolerate any risk.
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DEFINING YOUR INCOME
WHAT YOU MAY EXPECT (Payable on the 25th day each month):
Regular Monthly Income per unit: $ 6.34
Annual Income per unit: $ 76.10
RECORD DAY: 10th day of each month
These figures are estimates on the evaluation date; actual
payments may vary.
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay,
directly or indirectly, when you invest in the Fund.
INVESTOR FEES
Maximum Sales Fee (Load) on new
purchases (as a percentage of
$1,000 invested) 3.00%
Employees of some of the Sponsors and their affiliates may
be charged a reduced sales fee of no less than $5.00 per
unit.
The maximum sales fee is reduced if you invest at least
$100,000, as follows:
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
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Less than $100,000 3.00%
$100,000 to $249,999 2.75%
$250,000 to $499,999 2.50%
$500,000 to $999,999 2.25%
$1,000,000 and over 2.00%
Maximum Exchange Fee 2.00%
ESTIMATED ANNUAL FUND OPERATING EXPENSES
AMOUNT
PER UNIT
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$ 0.58
Trustee's Fee
$ 0.44
Portfolio Supervision,
Bookkeeping and
Administrative Fees (including updating
expenses)
$ 0.21
Evaluator's Fee
$ 0.20
Other Operating Expenses
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$ 1.43
TOTAL
The Sponsors historically paid updating expenses.
7. HOW HAVE SIMILAR FUNDS PERFORMED IN THE PAST?
In the following chart we show past performance of prior
Intermediate Term Series of Corporate Income Fund, which
had the same investment objectives, strategies and types
of bonds as this Fund. These prior Series differed in that
they charged a higher sales fee. These prior Intermediate
Term Series were offered between June 27, 1990 and April
9, 1996 and were outstanding on December 31, 1998. OF
COURSE, PAST PERFORMANCE OF PRIOR SERIES IS NO GUARANTEE
OF FUTURE RESULTS OF THIS FUND.
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
FOR PRIOR SERIES
Reflecting all expenses. For periods ended 12/31/98.
WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 1 YEAR 5 YEARS
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High 5.89% 6.63% 11.09% 7.49%
Average 3.81 6.04 8.89 7.05
Low 0.43 5.66 5.30 6.67
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Average
Sales fee 4.98% 4.95%
- -
Note: All returns represent changes in unit price with distributions reinvested
into the Corporate Fund Investment Accumulation Program.
8. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed and bonds are
not sold because of market changes. Rather, experienced
Defined Asset Funds financial analysts regularly review the
bonds in the Fund. The Fund may sell a bond if certain
adverse credit or other conditions exist.
9. HOW DO I BUY UNITS?
The minimum investment is one unit.
You can buy units from any of the Sponsors and other
broker-dealers. The Sponsors are listed later in this
prospectus. Some banks may offer units for sale through
special arrangements with the Sponsors, although certain
legal restrictions may apply.
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UNIT PRICE PER UNIT $1,122.49
(as of November 30, 1998)
Unit price is based on the net asset value of the Fund plus
the up-front sales fee. An amount equal to any principal
cash, as well as net accrued but undistributed interest on
the unit, is added to the unit price. An independent
evaluator prices the bonds at 3:30 p.m. Eastern time every
business day. Unit price changes every day with changes in
the prices of the bonds in the Fund.
10. HOW DO I SELL UNITS?
You may sell your units at any time to any Sponsor or the
Trustee for the net asset value determined at the close of
business on the date of sale. You will not pay any other fee
when you sell your units.
11. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income monthly. Interest on the bonds in this
Fund is subject to federal income taxes for U.S. investors,
but if you are a non-U.S. investor, your interest may be
exempt from U.S. federal income taxes, including withholding
taxes.
You will also receive principal payments if bonds are sold
or called or mature, when the cash available is more than
$5.00 per unit. You will be subject to tax on any gain
realized by the Fund on the disposition of bonds.
12. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT
You will receive your monthly income in cash unless you
choose to compound your income by reinvesting at no sales
fee in the Corporate Fund Investment Accumulation Program,
Inc. This Program is an open-end mutual fund with a
comparable investment objective. Income from this Program
will be subject to U.S. federal income taxes for both U.S.
and foreign investors. For more complete information about
the Program, including charges and fees, ask the Trustee for
the Program's prospectus. Read it carefully before you
invest. The Trustee must receive your written election to
reinvest at least 10 days before the record day of an income
payment.
EXCHANGE PRIVILEGES
You may exchange units of this Fund for units of certain
other Defined Asset Funds. You may also exchange into this
Fund from certain other funds. We charge a reduced sales fee
on exchanges.
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WHAT YOU CAN EXPECT FROM YOUR INVESTMENT
MONTHLY INCOME
The Fund will pay you regular monthly income. Your monthly income may vary
because of:
o elimination of one or more bonds from the Fund's portfolio because of
calls, redemptions or sales;
o a change in the Fund's expenses; or
o the failure by a bond's issuer to pay interest.
Changes in interest rates generally will not affect your monthly income because
the portfolio is fixed.
Along with your monthly income, you will receive your share of any available
bond principal.
RETURN FIGURES
We cannot predict your actual return, which will vary with unit price, how long
you hold your investment and changes in the portfolio, interest income and
expenses.
Estimated Current Return equals the estimated annual cash to be received from
the bonds in the Fund less estimated annual Fund expenses, divided by the Unit
Price (including the maximum sales fee):
Estimated Annual Estimated
Interest Income - Annual Expenses
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Unit Price
Estimated Long Term Return is a measure of the estimated return over the
estimated life of the Fund. Unlike Estimated Current Return, Estimated Long Term
Return reflects maturities, discounts and premiums of the bonds in the Fund. It
is an average of the yields to maturity (or in certain cases, to an earlier call
date) of the individual bonds in the portfolio, adjusted to reflect the Fund's
maximum sales fee and estimated expenses. We calculate the average yield for the
portfolio by weighting each bond's yield by its market value and the time
remaining to the call or maturity date.
Yields on individual bonds depend on many factors including general conditions
of the bond markets, the size of a particular offering and the maturity and
quality rating of the particular issues. Yields can vary among bonds with
similar maturities, coupons and ratings.
These return quotations are designed to be comparative rather than predictive.
RECORDS AND REPORTS
You will receive:
o a monthly statement of income payments and any principal payments;
o a notice from the Trustee when new bonds are deposited in exchange or
substitution for bonds originally deposited;
o an annual report on Fund activity; and
o annual tax information. This will also be sent to the IRS. You must report the
amount of interest received during the year.
You may request:
o copies of bond evaluations to enable you to comply with federal and state tax
reporting requirements; and
o audited financial statements of the Fund.
You may inspect records of Fund transactions at the Trustee's office during
regular business hours.
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THE RISKS YOU FACE
INTEREST RATE RISK
Investing involves risks, including the risk that your investment will decline
in value if interest rates rise. Generally, bonds with longer maturities will
change in value more than bonds with shorter maturities. Bonds in the Fund are
more likely to be called when interest rates decline. This would result in early
returns of principal to you and may result in early termination of the Fund. Of
course, we cannot predict how interest rates may change.
CALL RISK
Many bonds can be prepaid or 'called' by the issuer before their stated
maturity. For example, some bonds may be required to be called pursuant to
mandatory sinking fund provisions.
Also, an issuer might call its bonds during periods of falling interest rates,
if the issuer's bonds have a coupon higher than current market rates.
If the bonds are called, your income will decline and you may not be able to
reinvest the money you receive at as high a yield or as long a maturity. An
early call at par of a premium bond will reduce your return.
REDUCED DIVERSIFICATION RISK
If many investors sell their units, the Fund will have to sell bonds. This could
reduce the diversification of your investment and increase your share of Fund
expenses.
LIQUIDITY RISK
The bonds will generally trade in the over-the-counter market. We cannot assure
you that a liquid trading market will exist, especially since current law may
restrict the Fund from selling bonds to any Sponsor. The value of the bonds, and
of your investment, may be reduced if trading in bonds is limited or absent.
CONCENTRATION RISK
When a certain type of bond makes up 25% or more of the portfolio, the Fund is
said to be 'concentrated' in that bond type, which makes the Fund less
diversified.
Here is what you should know about the Fund's concentration in bonds issued by
financial institutions:
o the profitability of a financial institution is largely dependent upon the
credit quality of its loan portfolio; credit quality of its loan portfolio
is affected by the institution's underwriting criteria, concentrations
within the portfolio and industry and general economic conditions; and
o operating performance of a financial institution is also impacted by
changes in interest rates, the availability and cost of funds, intensity of
competition and degree of government regulation.
Changes to the portfolio from bond redemptions, maturities and sales may affect
the Fund's concentration over time.
BOND QUALITY RISK
A reduction in a bond's rating may decrease its value and, indirectly, the value
of your investment in the Fund.
LITIGATION RISK
We do not know of any pending litigation that might have a material adverse
effect upon the Fund.
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SELLING OR EXCHANGING UNITS
You can sell your units at any time for a price based on net asset value. Your
net asset value is calculated each business day by:
o adding the value of the bonds, net accrued interest, cash and any other
Fund assets;
o subtracting accrued but unpaid Fund expenses, unreimbursed Trustee
advances, cash held to buy back units or for distribution to investors and
any other Fund liabilities; and
o dividing the result by the number of outstanding units.
Your net asset value when you sell may be more or less than your cost because of
sales fees, market movements and changes in the portfolio.
SPONSORS' SECONDARY MARKET
While we are not obligated to do so, we will buy back units at net asset value
without any other fee or charge other than any remaining deferred sales charge.
We may resell the units to other buyers or to the Trustee. You should consult
your financial professional for current market prices to determine if other
broker-dealers or banks are offering higher prices.
We have maintained a secondary market continuously for over 25 years, but we
could discontinue it without prior notice for any business reason.
SELLING UNITS TO THE TRUSTEE
Regardless of whether we maintain a secondary market, you can sell your units to
the Trustee at any time by sending the Trustee a letter (with any outstanding
certificates if you hold unit certificates). You must properly endorse your
certificates (or execute a written transfer instrument with signatures
guaranteed by an eligible institution). Sometimes, additional documents are
needed such as a trust document, certificate of corporate authority, certificate
of death or appointment as executor, administrator or guardian.
Within seven days after your request and the necessary documents are received,
the Trustee will mail a check to you. Contact the Trustee for additional
information.
As long as we are maintaining a secondary market, the Trustee will sell your
units to us at a price based on net asset value. If there is no secondary
market, the Trustee may sell your units in the over-the-counter market for a
higher price, but it is not obligated to do so. In that case, you will receive
the net proceeds of the sale.
If the Fund does not have cash available to pay you for units you are selling,
the agent for the Sponsors will select bonds to be sold. Bonds will be selected
based on market and credit factors. These sales could be made at times when the
bonds would not otherwise be sold and may result in your receiving less than the
unit par value and also reduce the size and diversity of the Fund.
There could be a delay in paying you for your units:
o if the New York Stock Exchange is closed (other than customary weekend and
holiday closings);
o if the SEC determines that trading on the New York Stock Exchange is
restricted or that an emergency exists making sale or evaluation of the
bonds not reasonably practicable; and
o for any other period permitted by SEC order.
EXCHANGE OPTION
You may exchange units of certain Defined Asset Funds for units of this Fund at
a
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maximum exchange fee of 2.00%. You may exchange units of this Fund for units of
certain other funds at a reduced sales fee if your investment goals change. To
exchange units, you should talk to your financial professional about what funds
are exchangeable, suitable and currently available.
Normally, an exchange is taxable and you must recognize any gain or loss on the
exchange. However, the IRS may try to disallow a loss if the portfolios of the
two funds are not materially different; you should consult your own tax adviser.
We may amend or terminate this exchange option at any time without notice.
HOW THE FUND WORKS
PRICING
The price of a unit includes interest accrued on the bonds, less expenses, from
the most recent Record Day up to, but not including, the settlement date, which
is usually three business days after the purchase date of the unit.
A portion of the price of a unit consists of cash so that the Trustee can
provide you with regular monthly income. When you sell your units you will
receive your share of this cash.
EVALUATIONS
An independent Evaluator values the bonds on each business day (excluding
Saturdays, Sundays and the following holidays as observed by the New York Stock
Exchange: New Year's Day, Presidents' Day, Martin Luther King, Jr. Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas).
Bond values are based on current bid or offer prices for the bonds or comparable
bonds. In the past, the difference between bid and offer prices of publicly
offered bonds has ranged from 0.25% of face amount on actively traded issues to
1.5% on inactively traded issues; the difference has averaged between 0.5% and
1%.
INCOME
The Trustee credits interest to an Income Account and other receipts to a
Capital Account. The Trustee may establish a Reserve Account by withdrawing from
these accounts amounts it considers appropriate to pay any material liability.
These accounts do not bear interest.
EXPENSES
The Trustee is paid monthly. It also benefits when it holds cash for the Fund in
non-interest bearing accounts. The Trustee may also receive additional amounts:
o to reimburse the Trustee for the Fund's operating expenses;
o for extraordinary services and costs of indemnifying the Trustee and the
Sponsors;
o costs of actions taken to protect the Fund and other legal fees and
expenses;
o expenses for keeping the Fund's registration statement current; and
o Fund termination expenses and any governmental charges.
The Sponsors are currently reimbursed up to 45 cents per $1,000 face amount
annually for providing portfolio supervisory, bookkeeping and administrative
services and for any other expenses properly chargeable to the Fund. Legal,
typesetting, electronic filing and regulatory filing fees and expenses
associated with updating the Portfolio's registration statement yearly are also
now chargeable to the Portfolio. While this fee may exceed the amount of these
costs and expenses attributable to this Fund, the total of these fees
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for all Series of Defined Asset Funds will not exceed the aggregate amount
attributable to all of these Series for any calendar year. The Fund also pays
the Evaluator's fees.
The Trustee's, Sponsors' and Evaluator's fees may be adjusted for inflation
without investors' approval.
The Sponsors will pay advertising and selling expenses at no charge to the Fund.
If Fund expenses exceed initial estimates, the Fund will owe the excess. The
Trustee has a lien on Fund assets to secure reimbursement of Fund expenses and
may sell bonds if cash is not available.
PORTFOLIO CHANGES
The Sponsors and Trustee are not liable for any default or defect in a bond.
Unlike a mutual fund, the portfolio is designed to remain intact and we may keep
bonds in the portfolio even if their credit quality declines or other adverse
financial circumstances occur. However, we may sell a bond in certain cases if
we believe that certain adverse credit or certain other conditions exist.
If we maintain a secondary market in units but are unable to sell the units that
we buy in the secondary market, we will redeem units, which will affect the size
and composition of the portfolio. Units offered in the secondary market may not
represent the same face amount of bonds that they did originally.
We decide whether or not to offer units for sale that we acquire in the
secondary market after reviewing:
o diversity of the portfolio;
o size of the Fund relative to its original size;
o ratio of Fund expenses to income;
o current and long-term returns;
o degree to which units may be selling at a premium over par; and
o cost of maintaining a current prospectus.
FUND TERMINATION
The Fund will terminate following the stated maturity or sale of the last bond
in the portfolio. The Fund may also terminate earlier with the consent of
investors holding 51% of the units or if total assets of the Fund have fallen
below 40% of the face amount of bonds deposited. We will decide whether to
terminate the Fund early based on the same factors used in deciding whether or
not to offer units in the secondary market.
When the Fund is about to terminate you will receive a notice, and you will be
unable to sell your units after that time. On or shortly before termination, we
will sell any remaining bonds, and you will receive your final distribution. Any
bond that cannot be sold at a reasonable price may continue to be held by the
Trustee in a liquidating trust pending its final sale.
You will pay your share of the expenses associated with termination, including
brokerage costs in selling bonds. This may reduce the amount you receive as your
final distribution.
CERTIFICATES
Certificates for units are issued on request. You may transfer certificates by
complying with the requirements for redeeming certificates, described above. You
can replace lost or mutilated certificates by delivering satisfactory indemnity
and paying the associated costs.
TRUST INDENTURE
The Fund is a 'unit investment trust' governed by a Trust Indenture, a contract
among the Sponsors, the Trustee and the
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Evaluator, which sets forth their duties and obligations and your rights. A copy
of the Indenture is available to you on request to the Trustee. The following
summarizes certain provisions of the Indenture.
The Sponsors and the Trustee may amend the Indenture without your consent:
o to cure ambiguities;
o to correct or supplement any defective or inconsistent provision;
o to make any amendment required by any governmental agency; or
o to make other changes determined not to be materially adverse to your best
interest (as determined by the Sponsors).
Investors holding 51% of the units may amend the Indenture. Every investor must
consent to any amendment that changes the 51% requirement. No amendment may
reduce your interest in the Fund without your written consent.
The Trustee may resign by notifying the Sponsors. The Sponsors may remove the
Trustee without your consent if:
o it fails to perform its duties and the Sponsors determine that its
replacement is in your best interest; or
o it becomes incapable of acting or bankrupt or its affairs are taken over by
public authorities.
Investors holding 51% of the units may remove the Trustee. The Evaluator may
resign or be removed by the Sponsors and the Trustee without the consent of
investors. The resignation or removal of either becomes effective when a
successor accepts appointment. The Sponsors will try to appoint a successor
promptly; however, if no successor has accepted within 30 days after notice of
resignation, the resigning Trustee or Evaluator may petition a court to appoint
a successor.
Any Sponsor may resign as long as one Sponsor with a net worth of $2 million
remains and agrees to the resignation. The remaining Sponsors and the Trustee
may appoint a replacement. If there is only one Sponsor and it fails to perform
its duties or becomes bankrupt the Trustee may:
o remove it and appoint a replacement Sponsor;
o liquidate the Fund; or
o continue to act as Trustee without a Sponsor.
Merrill Lynch, Pierce, Fenner & Smith Incorporated acts as agent for the
Sponsors.
The Trust Indenture contains customary provisions limiting the liability of the
Trustee, the Sponsors and the Evaluator.
LEGAL OPINION
Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017, as
special counsel for the Sponsors, has given an opinion that the units are
validly issued.
AUDITORS
Deloitte & Touche LLP, 2 World Financial Center, New York, New York 10281,
independent accountants, audited the Statement of Condition included in this
prospectus.
SPONSORS
The Sponsors are:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (a wholly-owned subsidiary of
Merrill Lynch & Co., Inc.)
P.O. Box 9051,
Princeton, NJ 08543-9051
SALOMON SMITH BARNEY INC. (an indirectly wholly-owned subsidiary of Citigroup
Inc.)
388 Greenwich Street--23rd Floor,
New York, NY 10013
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DEAN WITTER REYNOLDS INC. (a principal operating subsidiary of Morgan Stanley
Dean Witter & Co.)
Two World Trade Center--59th Floor,
New York, NY 10048
PRUDENTIAL SECURITIES INCORPORATED (an
indirect wholly-owned subsidiary of the
Prudential Insurance Company of America)
One New York Plaza
New York, NY 10292
PAINEWEBBER INCORPORATED (a wholly-owned subsidiary of PaineWebber Group Inc.)
1285 Avenue of the Americas,
New York, NY 10019
Each Sponsor is a Delaware corporation and it, or its predecessor, has acted as
sponsor to many unit investment trusts. As a registered broker-dealer each
Sponsor buys and sells securities (including investment company shares) for
others (including investment companies) and participates as an underwriter in
various selling groups.
TRUSTEE
The Chase Manhattan Bank, Unit Investment Trust Department, 4 New York
Plaza--6th Floor, New York, New York 10004, is the Trustee.
It is supervised by the Federal Deposit Insurance Corporation, the Board of
Governors of the Federal Reserve System and New York State banking authorities.
UNDERWRITERS' AND SPONSORS' PROFITS
Underwriters receive sales charges when they sell units. The Sponsors also
realized a profit or loss on the initial deposit of the bonds. Any cash made
available by you to the Sponsors before the settlement date for those units may
be used in the Sponsors' businesses to the extent permitted by federal law and
may benefit the Sponsors.
A Sponsor or Underwriter may realize profits or sustain losses on bonds in the
Fund which were acquired from underwriting syndicates of which it was a member.
In maintaining a secondary market, the Sponsors will also realize profits or
sustain losses in the amount of any difference between the prices at which they
buy units and the prices at which they resell or redeem them.
PUBLIC DISTRIBUTION
The Sponsors do not intend to qualify units for sale in any foreign countries.
This prospectus does not constitute an offer to sell units in any country where
units cannot lawfully be sold.
CODE OF ETHICS
Merrill Lynch, as agent for the Sponsors, has adopted a code of ethics requiring
preclearance and reporting of personal securities transactions by its employees
with access to information on portfolio transactions. The goal of the code is to
prevent fraud, deception or misconduct against the Fund and to provide
reasonable standards of conduct.
YEAR 2000 ISSUES
Many computer systems were designed in such a way that they may be unable to
distinguish between the year 2000 and the year 1900 (commonly known as the 'Year
2000 Problem'). We do not expect that the computer system changes necessary to
prepare for the Year 2000 will cause any major operational difficulties for the
Fund. The Year 2000 Problem may adversely affect the issuers of the securities
contained in the Portfolio, but we cannot predict whether any impact will be
material to the Portfolio as a whole.
TAXES
The following summary describes some of the important income tax consequences of
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holding units. It assumes that you are not a dealer, financial institution,
insurance company or other investor with special circumstances. You should
consult your own tax adviser about your particular circumstances.
In the opinion of our counsel, under existing law:
GENERAL TREATMENT OF THE FUND AND YOUR INVESTMENT
The Fund will not be taxed as a corporation for federal income tax purposes, and
you
will be considered to own directly your share of each bond in the Fund.
INCOME OR LOSS UPON DISPOSITION
When all or part of your share of a bond is disposed of (for example, when the
Fund sells, exchanges or redeems a bond or when you sell or exchange your
units), you will generally recognize capital gain or loss. Your gain, however,
will generally be ordinary income to the extent of any accrued 'market
discount'. Generally you will have market discount to the extent that your basis
in a bond when you purchase a unit is less than its stated redemption price at
maturity (or, if it is an original issue discount bond, the issue price
increased by original issue discount that has accrued on the bond before your
purchase). You should consult your tax adviser in this regard.
If your net long-term capital gains exceed your net short-term capital losses,
the excess may be subject to tax at a lower rate than ordinary income. Any
capital gain from the Fund will be long-term if you are considered to have held
your investment on each bond for more than one year and short-term if you held
it for one year or less. Because the deductibility of capital losses is subject
to limitations, you may not be able to deduct all of your capital losses. You
should consult your tax advisor in this regard.
YOUR BASIS IN THE BONDS
Your aggregate basis in the bonds will be equal to the cost of your units,
including any sales charges and the organizational expenses you pay, adjusted to
reflect any accruals of 'original issue discount,' 'acquisition premium' and
'bond premium'. You should consult your tax adviser in this regard.
EXPENSES
If you are an individual who itemizes deductions, you may deduct your share of
Fund expenses, but only to the extent that such amount, together with your other
miscellaneous deductions, exceeds 2% of your adjusted gross income. Your ability
to deduct Fund expenses will be limited further if your adjusted gross income
exceeds a specified amount (currently, $124,500 or $62,250 for a married person
filing separately).
FOREIGN INVESTORS
If you are a foreign investor and you are not engaged in a U.S. trade or
business, you generally will not be subject to U.S. federal income tax,
including withholding tax, on the interest or gain on a bond issued after July
18, 1984 if you meet certain requirements, including the certification of
foreign status and other matters. You should consult your tax adviser about the
possible application of federal, state and local, and foreign taxes.
SUPPLEMENTAL INFORMATION
You can receive at no cost supplemental information about the Fund by calling
the Trustee. The supplemental information includes more detailed risk disclosure
about the types of bonds that may be in the Fund's portfolio, general risk
disclosure concerning any insurance securing certain bonds, and general
information about the structure and operation of the Fund. The supplemental
information is also available from the SEC.
13
<PAGE>
CORPORATE INCOME FUND,
INTERMEDIATE TERM SERIES - 51, DEFINED ASSET FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsors, Trustee and Holders
of Corporate Income Fund,
Intermediate Term Series - 51, Defined Asset Funds:
We have audited the accompanying statement of condition of
Corporate Income Fund, Intermediate Term Series - 51,
Defined Asset Funds, including the portfolio, as of
November 30, 1998 and the related statements of operations
and of changes in net assets for the years ended November
30, 1998, 1997 and 1996. These financial statements are the
responsibility of the Trustee. Our responsibility is to
express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures
in the financial statements. Securities owned at November
30, 1998, as shown in such portfolio, were confirmed to us
by The Chase Manhattan Bank, the Trustee. An audit also
includes assessing the accounting principles used and
significant estimates made by the Trustee, as well as
evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements referred to
above present fairly, in all material respects, the
financial position of Corporate Income Fund, Intermediate
Term Series - 51, Defined Asset Funds at November 30, 1998
and the results of its operations and changes in its net
assets for the above-stated years in conformity with
generally accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, N.Y.
January 22, 1999
D - 1.
<PAGE>
CORPORATE INCOME FUND,
INTERMEDIATE TERM SERIES - 51, DEFINED ASSET FUNDS
STATEMENT OF CONDITION
As of November 30, 1998
<TABLE>
<S> <C> <C>
TRUST PROPERTY:
Investment in marketable securities -
at value (cost $ 17,059,250 )(Note 1)........ $19,936,212
Accrued interest ............................... 503,990
Cash - principal ............................... 6,322
-----------
Total trust property ......................... 20,446,524
LESS LIABILITIES:
Income advance from Trustee.....................$ 140,838
Accrued Sponsors' fees ......................... 8,406
Redemptions payable ............................ 77,641 226,885
----------- -----------
NET ASSETS, REPRESENTED BY:
18,240 units of fractional undivided
interest outstanding (Note 3)................ 19,866,293
Undistributed net investment income ............ 353,346 $20,219,639
----------- ===========
UNIT VALUE ($ 20,219,639 / 18,240 units )......... $ 1,108.53
===========
</TABLE>
See Notes to Financial Statements.
D - 2.
<PAGE>
CORPORATE INCOME FUND,
INTERMEDIATE TERM SERIES - 51, DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE><CAPTION>
Years Ended November 30,
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income ........................$ 1,526,586 $ 1,827,905 $ 2,139,914
Trustee's fees and expenses ............ (18,470) (19,987) (22,971)
Sponsors' fees ......................... (9,289) (10,727) (13,458)
------------------------------------------------
Net investment income .................. 1,498,827 1,797,191 2,103,485
------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain on
securities sold or redeemed .......... 386,267 382,004 759,991
Unrealized appreciation (depreciation)
of investments ....................... 221,009 (445,105) (1,526,005)
------------------------------------------------
Net realized and unrealized
gain (loss) on investments ........... 607,276 (63,101) (766,014)
------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ..............$ 2,106,103 $ 1,734,090 $ 1,337,471
================================================
</TABLE>
See Notes to Financial Statements.
D - 3.
<PAGE>
CORPORATE INCOME FUND,
INTERMEDIATE TERM SERIES - 51, DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE><CAPTION>
Years Ended November 30,
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
OPERATIONS:
Net investment income ..................$ 1,498,827 $ 1,797,191 $ 2,103,485
Realized gain on
securities sold or redeemed .......... 386,267 382,004 759,991
Unrealized appreciation (depreciation)
of investments ....................... 221,009 (445,105) (1,526,005)
------------------------------------------------
Net increase in net assets
resulting from operations ............ 2,106,103 1,734,090 1,337,471
------------------------------------------------
DISTRIBUTIONS TO HOLDERS (Note 2):
Income ................................ (1,501,704) (1,802,573) (2,110,163)
Principal .............................. (101,028) (184,935) (80,335)
------------------------------------------------
Total distributions .................... (1,602,732) (1,987,508) (2,190,498)
------------------------------------------------
SHARE TRANSACTIONS:
Redemption amounts - income ............ (56,099) (66,731) (99,200)
Redemption amounts - principal ......... (3,211,230) (3,822,070) (5,773,405)
------------------------------------------------
Total share transactions ............... (3,267,329) (3,888,801) (5,872,605)
------------------------------------------------
NET DECREASE IN NET ASSETS ............... (2,763,958) (4,142,219) (6,725,632)
NET ASSETS AT BEGINNING OF YEAR .......... 22,983,597 27,125,816 33,851,448
------------------------------------------------
NET ASSETS AT END OF YEAR ................$20,219,639 $22,983,597 $27,125,816
================================================
PER UNIT:
Income distributions during
year .................................$ 76.60 $ 77.46 $ 77.60
================================================
Principal distributions during
year .................................$ 5.43 $ 8.14 $ 2.65
================================================
Net asset value at end of
year .................................$ 1,108.53 $ 1,083.11 $ 1,090.22
================================================
TRUST UNITS:
Redeemed during year ................... 2,980 3,661 5,434
Outstanding at end of year ............. 18,240 21,220 24,881
================================================
</TABLE>
See Notes to Financial Statements.
D - 4.
<PAGE>
CORPORATE INCOME FUND,
INTERMEDIATE TERM SERIES - 51, DEFINED ASSET FUNDS
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as a Unit
Investment Trust. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its
financial statements. The policies are in conformity with generally
accepted accounting principles.
(A) Securities are stated at value as determined by the
Evaluator based on bid side evaluations for the securities
See "How to Sell Units - Trustee's Redemption of Units"
in this Prospectus, Part B.
(B) The Fund is not subject to income taxes. Accordingly, no
provision for such taxes is required.
(C) Interest income is recorded as earned.
2. DISTRIBUTIONS
A distribution of net investment income is made to Holders each month.
Receipts other than interest, after deductions for redemptions and
applicable expenses, are distributed as explained in "Income,Distributions
and Reinvestment - Distributions" in this Prospectus, Part B.
3. NET CAPITAL
<TABLE>
<S> <C>
Cost of 18,240 units at Date of Deposit ....................$17,975,181
Less sales charge .......................................... 719,063
-----------
Net amount applicable to Holders ........................... 17,256,118
Redemptions of units - net cost of 17,760 units redeemed
less redemption amounts (principal)....................... (2,073,552)
Realized gain on securities sold or redeemed ............... 2,173,063
Principal distributions .................................... (366,298)
Unrealized appreciation of investments ..................... 2,876,962
-----------
Net capital applicable to Holders ..........................$19,866,293
===========
</TABLE>
4. INCOME TAXES
As of November 30, 1998, unrealized appreciation of investment, based on
cost for Federal income tax purposes, aggregated $2,876,962, all of which
related to appreciated securities. The cost of investment securities for
Federal income tax purposes was $17,059,250 at November 30, 1998.
D - 5.
<PAGE>
CORPORATE INCOME FUND,
INTERMEDIATE TERM SERIES - 51, DEFINED ASSET FUNDS
PORTFOLIO
As of November 30, 1998
<TABLE><CAPTION>
Rating of Issues(1)
--------------------
Standard
Moody's & Poor's Optional
Portfolio No. and Title of Investors Corpora- Face Redemption
Securities Service tion Amount Coupon % Maturities(3) Provisions(3) Cost Value(2)
---------- --------- --------- ----------- ----------- ------------ ------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 Aegon, NV, Subordinated Notes A1 AA- $ 3,270,000 8.000 % 2006 None $ 3,139,488 $ 3,703,517
2 BankAmerica Corporation, A1 A 2,250,000 7.625 2004 None 2,105,314 2,463,874
Subordinated Notes
3 Banque Paribas, Subordinated A3 A- 1,640,000 8.350 2007 None 1,577,090 1,833,999
Notes
4 Ford Motor Company, A1 NR 590,000 8.875 2006 None 603,275 699,582
Debentures
5 International Paper Company, A3 BBB+ 1,480,000 7.875 2006 None 1,427,984 1,614,385
Notes
6 Nationsbank Corporation, AA3 A 1,870,000 7.750 2004 None 1,765,073 2,062,859
Subordinated Notes
7 Chase Manhattan Corp., New A1 A- 275,000 6.500 2009 None 222,750 287,929
Subordinated Notes
8 Citicorp, Subordinated Notes A1 A+ 2,430,000 7.750 2006 None 2,273,464 2,703,139
9 Svenska Handelsbanken, A1 A 2,250,000 8.350 2004 None 2,208,127 2,506,669
Subordinated Notes
10 Wal-Mart Stores, Notes AA2 AA 1,770,000 8.000 2006 None 1,736,685 2,060,259
----------- ---------- ----------
TOTAL $17,825,000 $17,059,020 $19,936,212
=========== ========== ==========
See Notes to Portfolio.
</TABLE>
D - 6.
<PAGE>
CORPORATE INCOME FUND,
INTERMEDIATE TERM SERIES - 51, DEFINED ASSET FUNDS
NOTES TO PORTFOLIO
As of November 30, 1998
(1) A description of the rating symbols and their meanings appears under
"Description of Ratings" in this Prospectus, Part B. The ratings have been
provided by the Evaluator. "NR", if applicable, indicates that this
security is not currently rated by the indicated rating service.
(2) See Notes to Financial Statements.
(3) Optional redemption provisions, which may be exercised in whole or in part,
are initially at prices of par plus a premium, then subsequently at prices
declining to par. Certain securities may provide for redemption at par
prior or in addition to any optional or mandatory redemption dates or
maturity, for example, through the operation of a maintenance and
replacement fund, if proceeds are not able to be used as contemplated, the
project is condemned or sold or the project is destroyed and insurance
proceeds are used to redeem the securities. Many of the securities are also
subject to mandatory sinking fund redemption commencing on dates which may
be prior to the date on which securities may be optionally redeemed.
Sinking fund redemptions are at par and redeem only part of the issue. Some
of the securities have mandatory sinking funds which contain optional
provisions permitting the issuer to increase the principal amount of
securities called on a mandatory redemption date. The sinking fund
redemptions with optional provisions may, and optional refunding
redemptions generally will, occur at times when the redeemed securities
have an offering side evaluation which represents a premium over par. To
the extent that the securities were acquired at a price higher than the
redemption price, this will represent a loss of capital when compared with
the Public Offering Price of the Units when acquired. Distributions will
generally be reduced by the amount of the income which would otherwise have
been paid with respect to redeemed securities and there will be distributed
to Holders any principal amount and premium received on such redemption
after satisfying any redemption requests for Units received by the Fund.
The estimated current return may be affected by redemptions. The tax effect
on Holders of redemptions and related distributions is described under
"Taxes" in this Prospectus, Part B.
Insured by the indicated municipal bond insurance company.
See "Risk Factors - Insured Obligations " in this Prospectus, Part B.
D - 7.
<PAGE>
Defined
Asset FundsSM
HAVE QUESTIONS ? CORPORATE INCOME FUND
Request the most recent free INTERMEDIATE TERM SERIES--51
Information Supplement (A Unit Investment Trust)
that gives more details about ---------------------------------------
the Fund, by calling: This Prospectus does not contain
The Chase Manhattan Bank complete information about the
1-800-323-1508 investment company filed with the
Securities and Exchange Commission in
Washington, D.C. under the:
o Securities Act of 1933 (file no.
33-55101) and
o Investment Company Act of 1940 (file
no. 811-2295).
TO OBTAIN COPIES AT PRESCRIBED RATES--
WRITE: Public Reference Section of the
Commission
450 Fifth Street, N.W., Washington,
D.C. 20549-6009
CALL: 1-800-SEC-0330.
VISIT: http://www.sec.gov.
---------------------------------------
No person is authorized to give any
information or representations about
this Fund not contained in this
Prospectus or the Information
Supplement, and you should not rely on
any other information.
---------------------------------------
When units of this Fund are no longer
available, this Prospectus may be used
as a preliminary prospectus for a
future series, but some of the
information in this Prospectus will be
changed for that series.
Units of any future series may not be
sold nor may offers to buy be accepted
until that series has become effective
with the Securities and Exchange
Commission. No units can be sold in any
State where a sale would be illegal.
15029--2/99
