AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 12, 2000
REGISTRATION NO. 33-62037
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------------------
POST-EFFECTIVE AMENDMENT NO. 5
TO
FORM S-6
-------------------------------------
FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
-------------------------------------
A. EXACT NAME OF TRUST:
MUNICIPAL INVESTMENT TRUST FUND
MULTISTATE SERIES--97
DEFINED ASSET FUNDS
B. NAMES OF DEPOSITORS:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
SALOMON SMITH BARNEY INC.
PRUDENTIAL SECURITIES INCORPORATED
PAINEWEBBER INCORPORATED
DEAN WITTER REYNOLDS INC.
C. COMPLETE ADDRESSES OF DEPOSITORS' PRINCIPAL EXECUTIVE OFFICES:
<TABLE>
<S> <C> <C>
MERRILL LYNCH, PIERCE,
FENNER & SMITH
INCORPORATED
DEFINED ASSET FUNDS
POST OFFICE BOX 9051
PRINCETON, NJ 08543-9051 SALOMON SMITH BARNEY INC.
388 GREENWICH
STREET--23RD FLOOR
NEW YORK, NY 10013
</TABLE>
<TABLE>
<S> <C> <C>
PRUDENTIAL SECURITIES PAINEWEBBER INCORPORATED DEAN WITTER REYNOLDS INC.
INCORPORATED 1285 AVENUE OF THE TWO WORLD TRADE
ONE NEW YORK PLAZA AMERICAS CENTER--59TH FLOOR
NEW YORK, NY 10292 NEW YORK, NY 10019 NEW YORK, NY 10048
</TABLE>
D. NAMES AND COMPLETE ADDRESSES OF AGENTS FOR SERVICE:
<TABLE>
<S> <C> <C>
TERESA KONCICK, ESQ. ROBERT E. HOLLEY MICHAEL KOCHMANN
P.O. BOX 9051 1200 HARBOR BLVD. 388 GREENWICH ST.
PRINCETON, NJ 08543-9051 WEEHAWKEN, NJ 07087 NEW YORK, NY 10013
LEE B. SPENCER, JR. COPIES TO: DOUGLAS LOWE, ESQ.
ONE NEW YORK PLAZA PIERRE DE SAINT PHALLE, DEAN WITTER REYNOLDS INC.
NEW YORK, NY 10292 ESQ. TWO WORLD TRADE
450 LEXINGTON AVENUE CENTER--59TH FLOOR
NEW YORK, NY 10017 NEW YORK, NY 10048
</TABLE>
The issuer has registered an indefinite number of Units under the Securities Act
of 1933 pursuant to Rule 24f-2 and filed the Rule 24f-2 Notice for the most
recent fiscal year on March 16, 2000.
Check box if it is proposed that this filing will become effective on January
21, 2000 pursuant to paragraph (b) of Rule 485. /X/
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
DEFINED ASSET FUNDS-SM-
------------------------------
----------------------
MUNICIPAL INVESTMENT TRUST FUND
MULTISTATE SERIES--97
(A UNIT INVESTMENT TRUST)
- CALIFORNIA, NEW JERSEY, NEW YORK AND PENNSYLVANIA
PORTFOLIOS
- PORTFOLIOS OF INSURED LONG-TERM MUNICIPAL BONDS
- DESIGNED FOR TO BE FREE OF REGULAR FEDERAL INCOME
TAX
- EXEMPT FROM SOME STATE TAXES
- MONTHLY DISTRIBUTIONS
SPONSORS:
MERRILL LYNCH,
PIERCE, FENNER & SMITH
INCORPORATED -----------------------------------------------------
SALOMON SMITH BARNEY INC. The Securities and Exchange Commission has not
PRUDENTIAL SECURITIES approved or disapproved these Securities or passed
INC. upon the adequacy of this prospectus. Any
PAINEWEBBER INCORPORATED representation to the contrary is a criminal offense.
DEAN WITTER REYNOLDS INC. Prospectus dated January 21, 2000.
<PAGE>
- --------------------------------------------------------------------------------
Defined Asset Funds-SM-
Defined Asset FundsSM is America's oldest and largest family of unit investment
trusts, with over $160 billion sponsored over the last 28 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:
- A Disciplined strategy of buying and holding with a long-term view is the
cornerstone of Defined Asset Funds.
- Fixed portfolio: Defined Funds follow a buy and hold investment strategy;
funds are not managed and portfolio changes are limited.
- Defined Portfolios: We choose the stocks and bonds in advance, so you know
what you're investing in.
- Professional research: Our dedicated research team seeks out stocks or bonds
appropriate for a particular fund's objectives.
- 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 OCTOBER 22, 1999, THE
EVALUATION DATE.
<TABLE>
<S> <C>
CONTENTS
PAGE
---
California Insured Portfolio--
Risk/Return Summary................ 3
New Jersey Insured
Portfolio--Risk/Return Summary..... 6
New York Insured
Portfolio--Risk/Return Summary..... 9
Pennsylvania Insured Portfolio--
Risk/Return Summary................ 12
What You Can Expect From Your
Investment......................... 16
Monthly Income..................... 16
Return Figures..................... 16
Records and Reports................ 16
The Risks You Face................... 17
Interest Rate Risk................. 17
Call Risk.......................... 17
Reduced Diversification Risk....... 17
Liquidity Risk..................... 17
Concentration Risk................. 17
State Concentration Risk........... 18
Bond Quality Risk.................. 21
Insurance Related Risk............. 21
Litigation and Legislation Risks... 21
Selling or Exchanging Units.......... 21
Sponsors' Secondary Market......... 22
Selling Units to the Trustee....... 22
Exchange Option.................... 22
How The Fund Works................... 23
Pricing............................ 23
Evaluations........................ 23
Income............................. 23
Expenses........................... 23
Portfolio Changes.................. 24
Fund Termination................... 24
Certificates....................... 25
Trust Indenture.................... 25
Legal Opinion...................... 26
Auditors........................... 26
Sponsors........................... 26
Trustee............................ 26
Underwriters' and Sponsors'
Profits.......................... 26
Public Distribution................ 27
Code of Ethics..................... 27
Year 2000 Issues................... 27
Taxes................................ 27
Supplemental Information............. 29
Financial Statements................. D-1
</TABLE>
2
<PAGE>
- --------------------------------------------------------------------------------
CALIFORNIA INSURED PORTFOLIO--RISK/RETURN SUMMARY
<TABLE>
<C> <S>
1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is
exempt from regular federal income taxes
and some state and local taxes by
investing in a fixed portfolio
consisting primarily of insured, long
term municipal revenue bonds.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued
by states, municipalities and public
authorities to finance the cost of
buying, building or improving various
projects intended to generate revenue,
such as airports, health care
facilities, housing and municipal
electric, water and sewer utilities.
Generally, payments on these bonds
depend solely on the revenues generated
by the projects, excise taxes or state
appropriations, and are not backed by
the government's taxing power.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
- The Fund plans to hold to maturity 7
long-term tax-exempt municipal bonds
with an aggregate face amount of
$4,765,000.
- The Fund is a unit investment trust
which means that, unlike a mutual fund,
the Portfolio is not managed.
- The bonds are rated AAA or Aaa by
Standard & Poor's, Moody's or Fitch.
- 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.
- 100% of the bonds are insured by
insurance companies that guarantee
timely payments of principal and
interest on the bonds (but not Fund
units or the market value of the bonds
before they mature).
The Portfolio consists of municipal
bonds of the following types:
</TABLE>
<TABLE>
/ / Corporate Utility 14%
<S> <C>
/ / Hospitals/Health Care 31%
/ / Municipal Water/Sewer
Utilities 15%
/ / Special Tax Issues 24%
/ / Municipal Electric Utilities 16%
</TABLE>
<TABLE>
<C> <S>
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE
FUND. THIS CAN HAPPEN FOR VARIOUS
REASONS, INCLUDING:
- Rising interest rates, an issuer's
worsening financial condition or a drop
in bond ratings can reduce the price of
your units.
- Because the Fund is concentrated in
hospital/health care bonds, adverse
developments in this sector may affect
the value of your units.
- 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.
- 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.
ALSO, THE PORTFOLIO IS CONCENTRATED IN
BONDS OF CALIFORNIA SO IT IS LESS
DIVERSIFIED THAN A NATIONAL FUND AND IS
SUBJECT TO RISKS PARTICULAR TO CALIFORNIA
WHICH ARE BRIEFLY DESCRIBED UNDER STATE
CONCENTRATION RISKS LATER IN THIS
PROSPECTUS.
</TABLE>
3
<PAGE>
<TABLE>
<C> <S>
5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want federally tax-free
income. You will benefit from a
professionally selected and supervised
portfolio whose risk is reduced by
investing in insured 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, if you do not want a
tax-advantaged investment or if you
cannot tolerate any risk.
</TABLE>
<TABLE>
<C> <S>
DEFINING YOUR INCOME
</TABLE>
<TABLE>
<C> <S> <C>
WHAT YOU MAY EXPECT (Payable on the 25th day
of the month to holders of record on the
10th day of the month):
Regular Monthly Income per unit $ 4.40
Annual Income per unit: $52.80
THESE FIGURES ARE ESTIMATES DETERMINED ON THE
EVALUATION DAY; ACTUAL PAYMENTS MAY VARY.
</TABLE>
<TABLE>
<C> <S>
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) 2.90%
Employees of some of the Sponsors and their affiliates
may pay 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:
</TABLE>
<TABLE>
<CAPTION>
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
-------------- ------------
<C> <S> <C>
Less than $100,000 2.90%
$100,000 to $249,999 2.65%
$250,000 to $499,999 2.40%
$500,000 to $999,999 2.15%
$1,000,000 and over 1.90%
Maximum Exchange Fee 1.90%
</TABLE>
<TABLE>
<C> <S>
ESTIMATED ANNUAL FUND OPERATING EXPENSES
</TABLE>
<TABLE>
<CAPTION>
AMOUNT
PER UNIT
--------
<C> <S> <C>
$0.69
Trustee's Fee
$0.55
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses)
$0.28
Evaluator's Fee
$0.20
Organization Costs
$0.31
Other Operating Expenses
-----
$2.03
TOTAL
</TABLE>
<TABLE>
<C> <S>
The Sponsors historically paid organization
costs and updating expenses.
7. HOW HAVE SIMILAR FUNDS PERFORMED IN THE PAST?
IN THE FOLLOWING CHART WE SHOW PAST PERFORMANCE
OF PRIOR CALIFORNIA PORTFOLIOS, WHICH HAD
INVESTMENT OBJECTIVES, STRATEGIES AND TYPES OF
BONDS SUBSTANTIALLY SIMILAR TO THIS FUND. THESE
PRIOR SERIES DIFFERED IN THAT THEY CHARGED A
HIGHER SALES FEE. These prior California Series
were offered between June 22, 1988 and
September 27, 1996 and were outstanding on
September 30, 1999. 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
9/30/99.
</TABLE>
-------------------------------------------------------------------
<TABLE>
High 3.86% 6.69% 5.97% 4.25% 7.89% 6.57%
<S> <C> <C> <C> <C> <C> <C>
Average -2.14 5.00 5.82 -0.25 6.05 6.41
Low -5.88 2.82 5.61 -3.20 3.65 6.20
</TABLE>
-----------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Average
Sales fee 1.97% 5.15% 5.82%
</TABLE>
-----------------------------------------------------------
NOTE: ALL RETURNS REPRESENT CHANGES IN UNIT PRICE WITH DISTRIBUTIONS REINVESTED
INTO THE MUNICIPAL FUND INVESTMENT ACCUMULATION PROGRAM.
<TABLE>
<C> <S>
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.
</TABLE>
4
<PAGE>
<TABLE>
<C> <S>
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.
UNIT PRICE PER UNIT $968.08
(as of October 29, 1999)
Unit price is based on the net asset
value of the Fund plus the 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.
</TABLE>
<TABLE>
<C> <S>
11. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income monthly.
In the opinion of bond counsel when each
bond was issued, interest on the bonds
in this Fund is generally 100% exempt
from regular federal income tax. Your
income may also be exempt from some
California state and local personal
income taxes if you live in California.
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 income in cash
unless you choose to compound your
income by reinvesting at no sales fee in
the Municipal Fund Investment
Accumulation Program, Inc. This program
is an open-end mutual fund with a
comparable investment objective, but the
bonds will generally not be insured.
Income from this program will generally
be subject to state and local income
taxes. 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.
</TABLE>
5
<PAGE>
- --------------------------------------------------------------------------------
NEW JERSEY INSURED PORTFOLIO--RISK/RETURN SUMMARY
<TABLE>
<C> <S>
1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is
exempt from regular federal income taxes
and some state and local taxes by
investing in a fixed portfolio
consisting primarily of insured, long
term municipal revenue bonds.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued
by states, municipalities and public
authorities to finance the cost of
buying, building or improving various
projects intended to generate revenue,
such as airports, health care
facilities, housing and municipal
electric, water and sewer utilities.
Generally, payments on these bonds
depend solely on the revenues generated
by the projects, excise taxes or state
appropriations, and are not backed by
the government's taxing power.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
- The Fund plans to hold to maturity 7
long-term tax-exempt municipal bonds
with an aggregate face amount of
$2,735,000.
- The Fund is a unit investment trust
which means that, unlike a mutual fund,
the Portfolio is not managed.
- The bonds are rated AAA or Aaa by
Standard & Poor's, Moody's or Fitch.
- 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.
- 100% of the bonds are insured by
insurance companies that guarantee
timely payments of principal and
interest on the bonds (but not Fund
units or the market value of the bonds
before they mature).
The Portfolio consists of municipal
bonds of the following types:
</TABLE>
<TABLE>
/ / General Obligation 25%
<S> <C>
/ / Housing 18%
/ / Industrial Development
Revenue 15%
/ / Municipal Water/Sewer
Utilities 18%
/ / Refunded Bonds 7%
/ / Universities/Colleges 17%
</TABLE>
<TABLE>
<C> <S>
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE
FUND. THIS CAN HAPPEN FOR VARIOUS
REASONS, INCLUDING:
- Rising interest rates, an issuer's
worsening financial condition or a drop
in bond ratings can reduce the price of
your units.
- Because the Fund is concentrated in
general obligation bonds, adverse
developments in this sector may affect
the value of your units.
- 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.
- 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.
ALSO, THE PORTFOLIO IS CONCENTRATED IN
BONDS OF NEW JERSEY SO IT IS LESS
DIVERSIFIED THAN A NATIONAL FUND AND IS
SUBJECT TO RISKS PARTICULAR TO NEW
JERSEY WHICH ARE BRIEFLY DESCRIBED UNDER
STATE CONCENTRATION RISKS LATER IN THIS
PROSPECTUS.
</TABLE>
6
<PAGE>
<TABLE>
<C> <S>
5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want federally tax-free
income. You will benefit from a
professionally selected and supervised
portfolio whose risk is reduced by
investing in insured 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, if you do not want a
tax-advantaged investment or if you
cannot tolerate any risk.
</TABLE>
<TABLE>
<C> <S>
DEFINING YOUR INCOME
</TABLE>
<TABLE>
<C> <S> <C>
WHAT YOU MAY EXPECT (Payable on the 25th day
of the month to holders of record on the
10th day of the month):
Regular Monthly Income per unit $ 4.32
Annual Income per unit: $51.87
THESE FIGURES ARE ESTIMATES DETERMINED ON THE
EVALUATION DAY; ACTUAL PAYMENTS MAY VARY.
</TABLE>
<TABLE>
<C> <S>
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) 2.90%
Employees of some of the Sponsors and their affiliates
may pay 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:
</TABLE>
<TABLE>
<CAPTION>
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
-------------- ------------
<C> <S> <C>
Less than $100,000 2.90%
$100,000 to $249,999 2.65%
$250,000 to $499,999 2.40%
$500,000 to $999,999 2.15%
$1,000,000 and over 1.90%
Maximum Exchange Fee 1.90%
</TABLE>
<TABLE>
<C> <S>
ESTIMATED ANNUAL FUND OPERATING EXPENSES
</TABLE>
<TABLE>
<CAPTION>
AMOUNT
PER UNIT
--------
<C> <S> <C>
$0.69
Trustee's Fee
$0.55
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses)
$0.50
Evaluator's Fee
$0.20
Organization Costs
$0.58
Other Operating Expenses
-----
$2.52
TOTAL
</TABLE>
<TABLE>
<C> <S>
The Sponsors historically paid organization
costs and updating expenses.
7. HOW HAVE SIMILAR FUNDS PERFORMED IN THE PAST?
IN THE FOLLOWING CHART WE SHOW PAST PERFORMANCE
OF PRIOR NEW JERSEY PORTFOLIOS, WHICH HAD
INVESTMENT OBJECTIVES, STRATEGIES AND TYPES OF
BONDS SUBSTANTIALLY SIMILAR TO THIS FUND. THESE
PRIOR SERIES DIFFERED IN THAT THEY CHARGED A
HIGHER SALES FEE. These prior New Jersey Series
were offered between June 22, 1988 and
September 19, 1996 and were outstanding on
September 30, 1999. 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
9/30/99.
</TABLE>
-------------------------------------------------------------------
<TABLE>
High 1.38% 6.59% 6.12% 2.67% 7.78% 6.61%
<S> <C> <C> <C> <C> <C> <C>
Average -1.82 4.81 5.72 -0.04 5.86 6.29
Low -6.50 3.02 5.52 -3.75 3.75 6.10
</TABLE>
-----------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Average
Sales fee 1.85% 5.18% 5.66%
</TABLE>
-----------------------------------------------------------
NOTE: ALL RETURNS REPRESENT CHANGES IN UNIT PRICE WITH DISTRIBUTIONS REINVESTED
INTO THE MUNICIPAL FUND INVESTMENT ACCUMULATION PROGRAM.
<TABLE>
<C> <S>
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.
</TABLE>
7
<PAGE>
<TABLE>
<C> <S>
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.
UNIT PRICE PER UNIT $969.19
(as of October 29, 1999)
Unit price is based on the net asset
value of the Fund plus the 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.
</TABLE>
<TABLE>
<C> <S>
11. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income monthly.
In the opinion of bond counsel when each
bond was issued, interest on the bonds in
this Fund is generally 100% exempt from
regular federal income tax. Your income
may also be exempt from some New Jersey
state and local personal income taxes if
you live in New Jersey.
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 income in cash
unless you choose to compound your income
by reinvesting at no sales fee in the
Municipal Fund Investment Accumulation
Program, Inc. This program is an open-end
mutual fund with a comparable investment
objective, but the bonds generally will
not be insured. Income from this program
will generally be subject to state and
local income taxes. 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.
</TABLE>
8
<PAGE>
- --------------------------------------------------------------------------------
NEW YORK INSURED PORTFOLIO--RISK/RETURN SUMMARY
<TABLE>
<C> <S>
1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is
exempt from regular federal income taxes
and some state and local taxes by
investing in a fixed portfolio
consisting primarily of insured, long
term municipal revenue bonds.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued
by states, municipalities and public
authorities to finance the cost of
buying, building or improving various
projects intended to generate revenue,
such as airports, health care
facilities, housing and municipal
electric, water and sewer utilities.
Generally, payments on these bonds
depend solely on the revenues generated
by the projects, excise taxes or state
appropriations, and are not backed by
the government's taxing power.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
- The Fund plans to hold to maturity 7
long-term tax-exempt municipal bonds
with an aggregate face amount of
$3,070,000.
- The Fund is a unit investment trust
which means that, unlike a mutual fund,
the Portfolio is not managed.
- The bonds are rated AAA or Aaa by
Standard & Poor's, Moody's or Fitch.
- 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.
- 100% of the bonds are insured by
insurance companies that guarantee
timely payments of principal and
interest on the bonds (but not Fund
units or the market value of the bonds
before they mature).
The Portfolio consists of municipal
bonds of the following types:
</TABLE>
<TABLE>
/ / Hospitals/Health Care 20%
<S> <C>
/ / Lease Rental Appropriation 33%
/ / Municipal Water/Sewer
Utilities 8%
/ / Universities/Colleges 39%
</TABLE>
<TABLE>
<C> <S>
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE
FUND. THIS CAN HAPPEN FOR VARIOUS
REASONS, INCLUDING:
- Rising interest rates, an issuer's
worsening financial condition or a drop
in bond ratings can reduce the price of
your units.
- Because the Fund is concentrated in
lease rental appropriation and
university/college bonds, adverse
developments in these sectors may affect
the value of your units.
- 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.
- 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.
ALSO, THE PORTFOLIO IS CONCENTRATED IN
BONDS OF NEW YORK SO IT IS LESS
DIVERSIFIED THAN A NATIONAL FUND AND IS
SUBJECT TO RISKS PARTICULAR TO NEW YORK
WHICH ARE BRIEFLY DESCRIBED UNDER STATE
CONCENTRATION RISKS LATER IN THIS
PROSPECTUS.
</TABLE>
9
<PAGE>
<TABLE>
<C> <S>
5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want federally tax-free
income. You will benefit from a
professionally selected and supervised
portfolio whose risk is reduced by
investing in insured 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, if you do not want a
tax-advantaged investment or if you
cannot tolerate any risk.
</TABLE>
<TABLE>
<C> <S>
DEFINING YOUR INCOME
</TABLE>
<TABLE>
<C> <S> <C>
WHAT YOU MAY EXPECT (Payable on the 25th day
of the month to holders of record on the
10th day of the month):
Regular Monthly Income per unit $ 4.29
Annual Income per unit: $51.50
THESE FIGURES ARE ESTIMATES DETERMINED ON THE
EVALUATION DAY; ACTUAL PAYMENTS MAY VARY.
</TABLE>
<TABLE>
<C> <S>
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) 2.90%
Employees of some of the Sponsors and their affiliates
may pay 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:
</TABLE>
<TABLE>
<CAPTION>
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
-------------- ------------
<C> <S> <C>
Less than $100,000 2.90%
$100,000 to $249,999 2.65%
$250,000 to $499,999 2.40%
$500,000 to $999,999 2.15%
$1,000,000 and over 1.90%
Maximum Exchange Fee 1.90%
</TABLE>
<TABLE>
<C> <S>
ESTIMATED ANNUAL FUND OPERATING EXPENSES
</TABLE>
<TABLE>
<CAPTION>
AMOUNT
PER UNIT
--------
<C> <S> <C>
$0.70
Trustee's Fee
$0.55
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses)
$0.45
Evaluator's Fee
$0.20
Organization Costs
$0.58
Other Operating Expenses
-----
$2.48
TOTAL
</TABLE>
<TABLE>
<C> <S>
The Sponsors historically paid organization
costs and updating expenses.
7. HOW HAVE SIMILAR FUNDS PERFORMED IN THE PAST?
IN THE FOLLOWING CHART WE SHOW PAST PERFORMANCE
OF PRIOR NEW YORK PORTFOLIOS, WHICH HAD
INVESTMENT OBJECTIVES, STRATEGIES AND TYPES OF
BONDS SUBSTANTIALLY SIMILAR TO THIS FUND. THESE
PRIOR SERIES DIFFERED IN THAT THEY CHARGED A
HIGHER SALES FEE. These prior New York Series
were offered between January 14, 1988 and
October 16, 1996 and were outstanding on
September 30, 1999. 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
9/30/99.
</TABLE>
-------------------------------------------------------------------
<TABLE>
High 2.66% 6.84% 6.28% 3.90% 8.04% 6.88%
<S> <C> <C> <C> <C> <C> <C>
Average -1.64 4.63 5.93 0.17 5.63 6.52
Low -7.50 2.83 5.67 -4.91 3.76 6.26
</TABLE>
-----------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Average
Sales fee 1.88% 4.94% 5.78%
</TABLE>
-----------------------------------------------------------
NOTE: ALL RETURNS REPRESENT CHANGES IN UNIT PRICE WITH DISTRIBUTIONS REINVESTED
INTO THE MUNICIPAL FUND INVESTMENT ACCUMULATION PROGRAM.
<TABLE>
<C> <S>
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.
</TABLE>
10
<PAGE>
<TABLE>
<C> <S>
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.
UNIT PRICE PER UNIT $958.99
(as of October 29, 1999)
Unit price is based on the net asset
value of the Fund plus the 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.
</TABLE>
<TABLE>
<C> <S>
11. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income monthly.
In the opinion of bond counsel when each
bond was issued, interest on the bonds in
this Fund is generally 100% exempt from
regular federal income tax. Your income
may also be exempt from some New York
state and local personal income taxes if
you live in New York.
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 income in cash
unless you choose to compound your income
by reinvesting at no sales fee in the
Municipal Fund Investment Accumulation
Program, Inc. This program is an open-end
mutual fund with a comparable investment
objective, but the bonds generally will
not be insured. Income from this program
will generally be subject to state and
local income taxes. 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.
</TABLE>
11
<PAGE>
- --------------------------------------------------------------------------------
PENNSYLVANIA INSURED PORTFOLIO--RISK/RETURN SUMMARY
<TABLE>
<C> <S>
1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is
exempt from regular federal income taxes
and some state and local taxes by
investing in a fixed portfolio
consisting primarily of insured, long
term municipal revenue bonds.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued
by states, municipalities and public
authorities to finance the cost of
buying, building or improving various
projects intended to generate revenue,
such as airports, health care
facilities, housing and municipal
electric, water and sewer utilities.
Generally, payments on these bonds
depend solely on the revenues generated
by the projects, excise taxes or state
appropriations, and are not backed by
the government's taxing power.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
- The Fund plans to hold to maturity 7
long-term tax-exempt municipal bonds
with an aggregate face amount of
$2,650,000.
- The Fund is a unit investment trust
which means that, unlike a mutual fund,
the Portfolio is not managed.
- The bonds are rated AAA or Aaa by
Standard & Poor's, Moody's or Fitch.
- 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.
- 100% of the bonds are insured by
insurance companies that guarantee
timely payments of principal and
interest on the bonds (but not Fund
units or the market value of the bonds
before they mature).
The Portfolio consists of municipal
bonds of the following types:
</TABLE>
<TABLE>
/ / General Obligation 22%
<S> <C>
/ / Housing 19%
/ / Municipal Water/Sewer
Utilities 6%
/ / Refunded Bonds 17%
/ / Parking, Stadiums/Recreation
Facilities 17%
/ / Universities/Colleges 19%
</TABLE>
<TABLE>
<C> <S>
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE
FUND. THIS CAN HAPPEN FOR VARIOUS
REASONS, INCLUDING:
- Rising interest rates, an issuer's
worsening financial condition or a drop
in bond ratings can reduce the price of
your units.
- 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.
- 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.
ALSO, THE PORTFOLIO IS CONCENTRATED IN
BONDS OF PENNSYLVANIA SO IT IS LESS
DIVERSIFIED THAN A NATIONAL FUND AND IS
SUBJECT TO RISKS PARTICULAR TO
PENNSYLVANIA WHICH ARE BRIEFLY DESCRIBED
UNDER STATE CONCENTRATION RISKS LATER IN
THIS PROSPECTUS.
</TABLE>
12
<PAGE>
<TABLE>
<C> <S>
5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want federally tax-free
income. You will benefit from a
professionally selected and supervised
portfolio whose risk is reduced by
investing in insured 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, if you do not want a
tax-advantaged investment or if you
cannot tolerate any risk.
</TABLE>
<TABLE>
<C> <S>
DEFINING YOUR INCOME
</TABLE>
<TABLE>
<C> <S> <C>
WHAT YOU MAY EXPECT (Payable on the 25th day
of the month to holders of record on the
10th day of the month):
Regular Monthly Income per unit $ 4.38
Annual Income per unit: $52.57
THESE FIGURES ARE ESTIMATES DETERMINED ON THE
EVALUATION DAY; ACTUAL PAYMENTS MAY VARY.
</TABLE>
<TABLE>
<C> <S>
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) 2.90%
Employees of some of the Sponsors and their affiliates
may pay 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:
</TABLE>
<TABLE>
<CAPTION>
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
-------------- ------------
<C> <S> <C>
Less than $100,000 2.90%
$100,000 to $249,999 2.65%
$250,000 to $499,999 2.40%
$500,000 to $999,999 2.15%
$1,000,000 and over 1.90%
Maximum Exchange Fee 1.90%
</TABLE>
<TABLE>
<C> <S>
ESTIMATED ANNUAL FUND OPERATING EXPENSES
</TABLE>
<TABLE>
<CAPTION>
AMOUNT
PER UNIT
--------
<C> <S> <C>
$0.69
Trustee's Fee
$0.54
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses)
$0.51
Evaluator's Fee
$0.20
Organization Costs
$0.57
Other Operating Expenses
-----
$2.51
TOTAL
</TABLE>
<TABLE>
<C> <S>
The Sponsors historically paid organization
costs and updating expenses.
7. HOW HAVE SIMILAR FUNDS PERFORMED IN THE PAST?
IN THE FOLLOWING CHART WE SHOW PAST PERFORMANCE
OF PRIOR PENNSYLVANIA PORTFOLIOS, WHICH HAD
INVESTMENT OBJECTIVES, STRATEGIES AND TYPES OF
BONDS SUBSTANTIALLY SIMILAR TO THIS FUND. THESE
PRIOR SERIES DIFFERED IN THAT THEY CHARGED A
HIGHER SALES FEE. These prior Pennsylvania
Series were offered between May 19, 1988 and
September 13, 1996 and were outstanding on
September 30, 1999. 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
9/30/99.
</TABLE>
-------------------------------------------------------------------
<TABLE>
High 1.25% 6.52% 6.06% 2.44% 7.71% 6.55%
<S> <C> <C> <C> <C> <C> <C>
Average -2.01 4.96 5.78 -0.14 6.01 6.35
Low -6.76 3.04 5.65 -4.12 3.99 6.23
</TABLE>
-----------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Average
Sales fee 1.94% 5.20% 5.63%
</TABLE>
-----------------------------------------------------------
NOTE: ALL RETURNS REPRESENT CHANGES IN UNIT PRICE WITH DISTRIBUTIONS REINVESTED
INTO THE MUNICIPAL FUND INVESTMENT ACCUMULATION PROGRAM.
<TABLE>
<C> <S>
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.
</TABLE>
13
<PAGE>
<TABLE>
<C> <S>
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.
UNIT PRICE PER UNIT $973.64
(as of October 29, 1999)
Unit price is based on the net asset
value of the Fund plus the 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.
In the opinion of bond counsel when each
bond was issued, interest on the bonds
in this Fund is generally 100% exempt
from regular federal income tax. Your
income may also be exempt from some
Pennsylvania state and local personal
income taxes if you live in
Pennsylvania.
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 income in cash
unless you choose to compound your
income by reinvesting at no sales fee in
the Municipal Fund Investment
Accumulation Program, Inc. This program
is an open-end mutual fund with a
comparable investment objective, but the
bonds will generally not be insured.
Income from this program will generally
be subject to state and local income
taxes. 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.
</TABLE>
14
<PAGE>
- --------------------------------------------------------------------------------
TAX-FREE VS. TAXABLE INCOME: A COMPARISON OF TAXABLE AND TAX-FREE YIELDS
FOR CALIFORNIA RESIDENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 1999* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 4% 4.5% 5% 5.5% 6% 6.5%
<S> <C> <C> <C> <C> <C> <C> <C> <C>
IS EQUIVALENT TO A TAXABLE YIELD OF
<CAPTION>
TAXABLE INCOME 1999* TAX-FREE YIELD OF
SINGLE RETURN 7% 7.5% 8%
<S> <C> <C> <C>
IS EQUIVALENT TO A
TAXABLE YIELD OF
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 25,750 $ 0- 43,050 20.10 5.01 5.63 6.26 6.88 7.51 8.14 8.76
$ 25,751- 62,450 $ 43,051-104,050 34.70 6.13 6.89 7.66 8.42 9.19 9.95 10.72
$ 62,451-130,250 $104,051-158,550 37.42 6.39 7.19 7.99 8.79 9.59 10.39 11.19
$130,251-283,150 $158,551-283,150 41.95 6.89 7.75 8.61 9.47 10.34 11.20 12.06
OVER $283,151 OVER $283,151 45.22 7.30 8.21 9.13 10.04 10.95 11.87 12.78
<S> <C> <C>
$ 0- 25,750 9.39 10.01
$ 25,751- 62,450 11.48 12.25
$ 62,451-130,250 11.98 12.78
$130,251-283,150 12.92 13.78
OVER $283,151 13.69 14.60
</TABLE>
FOR NEW JERSEY RESIDENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 1999* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 4% 4.5% 5% 5.5% 6% 6.5%
<S> <C> <C> <C> <C> <C> <C> <C> <C>
IS EQUIVALENT TO A TAXABLE YIELD OF
<CAPTION>
TAXABLE INCOME 1999* TAX-FREE YIELD OF
SINGLE RETURN 7% 7.5% 8%
<S> <C> <C> <C>
IS EQUIVALENT TO A
TAXABLE YIELD OF
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 25,750 $ 0- 43,050 16.49 4.79 5.39 5.99 6.59 7.18 7.78 8.38
$ 25,751- 62,450 $ 43,051-104,050 31.98 5.88 6.62 7.35 8.09 8.82 9.56 10.29
$ 62,451-130,250 $104,051-158,550 35.40 6.19 6.97 7.74 8.51 9.29 10.06 10.84
$130,251-283,150 $158,551-283,150 40.08 6.68 7.51 8.34 9.18 10.01 10.85 11.68
OVER $283,151 OVER $283,151 43.45 7.07 7.96 8.84 9.73 10.61 11.49 12.38
<S> <C> <C>
$ 0- 25,750 8.98 9.58
$ 25,751- 62,450 11.03 11.76
$ 62,451-130,250 11.61 12.38
$130,251-283,150 12.52 13.35
OVER $283,151 13.26 14.15
</TABLE>
FOR NEW YORK CITY RESIDENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 1999* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 4% 4.5% 5% 5.5% 6% 6.5%
<S> <C> <C> <C> <C> <C> <C> <C> <C>
IS EQUIVALENT TO A TAXABLE YIELD OF
<CAPTION>
TAXABLE INCOME 1999* TAX-FREE YIELD OF
SINGLE RETURN 7% 7.5% 8%
<S> <C> <C> <C>
IS EQUIVALENT TO A
TAXABLE YIELD OF
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 43,060 23.59 5.24 5.89 6.54 7.20 7.85 8.51 9.16
$ 0-25,750- 23.63 5.24 5.89 6.55 7.20 7.86 8.51 9.17
$ 25,751- 62,450 $ 43,051-104,050 35.35 6.19 6.96 7.73 8.51 9.28 10.05 10.83
$ 62,451-130,250 $104,051-158,550 38.04 6.46 7.26 8.07 8.88 9.68 10.49 11.30
$130,251-283,150 $158,551-283,150 42.53 6.96 7.83 8.70 9.57 10.44 11.31 12.18
OVER $283,151 OVER $283,151 45.77 7.38 8.30 9.22 10.14 11.06 11.98 12.91
<S> <C> <C>
9.82 10.47
$ 0-25,750- 9.82 10.48
$ 25,751- 62,450 11.60 12.37
$ 62,451-130,250 12.11 12.91
$130,251-283,150 13.05 13.92
OVER $283,151 13.83 14.75
</TABLE>
FOR NEW YORK STATE RESIDENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 1999* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 4% 4.5% 5% 5.5% 6% 6.5%
<S> <C> <C> <C> <C> <C> <C> <C> <C>
IS EQUIVALENT TO A TAXABLE YIELD OF
<CAPTION>
TAXABLE INCOME 1999* TAX-FREE YIELD OF
SINGLE RETURN 7% 7.5% 8%
<S> <C> <C> <C>
IS EQUIVALENT TO A
TAXABLE YIELD OF
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 25,750 $ 0- 43,050 20.82 5.05 5.68 6.31 6.95 7.58 8.21 8.84
$ 25,751- 62,450 $ 43,051-104,050 32.93 5.96 6.71 7.46 8.20 8.95 9.69 10.44
$ 62,451-130,250 $104,051-158,550 35.73 6.22 7.00 7.78 8.56 9.34 10.11 10.69
$130,251-283,150 $158,551-283,150 40.38 6.71 7.55 8.39 9.23 10.06 10.90 11.74
OVER $283,151 OVER $283,151 43.74 7.11 8.00 8.89 9.78 10.66 11.55 12.44
<S> <C> <C>
$ 0- 25,750 9.47 10.10
$ 25,751- 62,450 11.18 11.93
$ 62,451-130,250 11.67 12.45
$130,251-283,150 12.58 13.42
OVER $283,151 13.33 14.22
</TABLE>
FOR PENNSYLVANIA RESIDENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 1999* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 3% 3.5% 4% 4.5% 5% 5.5%
<S> <C> <C> <C> <C> <C> <C> <C> <C>
IS EQUIVALENT TO A TAXABLE YIELD OF
<CAPTION>
TAXABLE INCOME 1999* TAX-FREE YIELD OF
SINGLE RETURN 6% 6.5% 7%
<S> <C> <C> <C>
IS EQUIVALENT TO A
TAXABLE YIELD OF
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 25,750 $ 0- 43,050 17.38 3.63 4.24 4.84 5.45 6.05 6.66 7.26
$ 27,751- 62,450 $ 43,051-104,050 30.02 4.29 5.00 5.72 6.43 7.14 7.86 8.57
$ 62,451-130,250 $104,051-158,550 32.93 4.47 5.22 5.96 6.71 7.46 8.20 8.95
$130,251-283,150 $158,551-283,150 37.79 4.82 5.63 6.43 7.23 8.04 8.84 9.65
OVER $283,151 OVER $283,151 41.29 5.11 5.96 6.81 7.66 8.52 9.37 10.22
<S> <C> <C>
$ 0- 25,750 7.87 8.47
$ 27,751- 62,450 9.29 10.00
$ 62,451-130,250 9.69 10.44
$130,251-283,150 10.45 11.25
OVER $283,151 11.07 11.92
</TABLE>
To compare the yield of a taxable security with the yield of a tax-free
security, find your taxable income and read across. The table incorporates 1999
federal and applicable State (and City) income tax rates and assumes that all
income would otherwise be taxed at the investor's highest tax rate. Yield
figures are for example only.
*Based upon net amount subject to federal income tax after deductions and
exemptions. This table does not reflect the possible effect of other tax
factors, such as alternative minimum tax, personal exemptions, the phase out of
exemptions, itemized deductions or the possible partial disallowance of
deductions. Consequently, investors are urged to consult their own tax advisers
in this regard.
15
<PAGE>
WHAT YOU CAN EXPECT FROM YOUR INVESTMENT
MONTHLY INCOME
The Fund will pay you regular monthly income. Your monthly income may vary
because of:
- elimination of one or more bonds from the Fund's portfolio because of calls,
redemptions or sales;
- a change in the Fund's expenses; or
- the failure by a bond's issuer to pay interest.
Changes in interest rates generally will not affect your income because the
portfolio is fixed.
Along with your 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):
<TABLE>
<S> <C> <C>
Estimated Annual Estimated
Interest Income - Annual Expenses
- -------------------------------------
Unit Price
</TABLE>
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:
- - a monthly statement of income payments and any principal payments;
- - a notice from the Trustee when new bonds are deposited in exchange or
substitution for bonds originally deposited;
- - an annual report on Fund activity; and
- - annual tax information. THIS WILL ALSO BE SENT TO THE IRS. YOU MUST REPORT THE
AMOUNT OF TAX-EXEMPT INTEREST RECEIVED DURING THE YEAR.
You may request:
- - copies of bond evaluations to enable you to comply with federal and state tax
reporting requirements; and
- - audited financial statements of the Fund.
You may inspect records of Fund transactions at the Trustee's office during
regular business hours.
16
<PAGE>
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.
An issuer might call its bonds in extraordinary cases, including if:
- it no longer needs the money for the original purpose;
- the project is condemned or sold;
- the project is destroyed and insurance proceeds are used to redeem the
bonds;
- any related credit support expires and is not replaced; or
- interest on the bonds become taxable.
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
You can always sell back your units, but we cannot assure you that a liquid
trading market will always exist for the bonds in the portfolio, especially
since current law may restrict the Fund from selling bonds to any Sponsor. The
bonds will generally trade in the over-the-counter market. 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, it is said to
be "concentrated" in that bond type, which makes the Portfolio less diversified.
Here is what you should know about the California Portfolio's concentration in
hospital and health care bonds.
- payment for these bonds depends on revenues from private third-party payors
and government programs, including Medicare and Medicaid, which have
generally undertaken cost containment measures to limit payments to health
care providers;
- hospitals face increasing competition resulting from hospital mergers and
affiliations;
- hospitals need to reduce costs as HMOs increase market penetration and
hospital supply and drug companies raise prices;
- hospitals and health care providers are subject to various legal claims by
patients
17
<PAGE>
and others and are adversely affected by increasing costs of insurance; and
- many hospitals are aggressively buying physician practices and assuming risk
contracts to gain market share. If revenues do not increase accordingly,
this practice could reduce profits;
- Medicare is changing its reimbursement system for nursing homes. Many
nursing home providers are not sure how they will be treated. In many cases,
the providers may receive lower reimbursements and these would have to cut
expenses to maintain profitability; and
- most retirement/nursing home providers rely on entrance fees for operating
revenues. If people live longer than expected and turnover is lower than
budgeted, operating revenues would be adversely affected by less than
expected entrance fees.
Here is what you should know about the New Jersey Portfolio's concentration in
general obligation bonds.
- general obligation bonds are backed by the issuer's pledge of its full
faith, credit and taxing power;
- but the taxing power of any government issuer may be limited by provisions
of the state constitution or laws as well as political considerations; and
- an issuer's credit can be negatively affected by various factors, including
population decline that erodes the tax base, natural disasters, decline in
industry, limited access to capital markets or heavy reliance on state or
federal aid.
Here is what you should know about the New York Portfolio's concentration in
university/college bonds. Payment for these bonds depends on:
- level or amount and diversity of sources of revenue;
- availability of endowments and other funds;
- enrollment;
- financial management;
- reputation; and
- for public institutions, the financial condition of the government and its
educational policies.
Here is what you should know about the New York Portfolio's concentration in
lease rental bonds. Lease rental bonds are generally issued by governmental
financing authorities that cannot assess a tax to cover the cost of equipment or
construction of buildings that will be used by a state or local government. The
risks associated with these bonds include:
- the failure of the government to appropriate funds for the leasing rental
payments to service the bonds; and
- rental obligations, and therefore payments, may terminate in the event of
damages to or destruction or condemnation of the of the equipment or
building.
Changes to the portfolio from bond redemptions, maturities and sales may affect
the Fund's concentrations over time.
STATE CONCENTRATION RISK
CALIFORNIA RISKS
GENERALLY
From the late 1980s through the early 1990s, an economic recession eroded
California's revenue base. At the same time rapid population growth caused State
expenditures to exceed budget appropriations.
- As a result California experienced a period of sustained budget imbalance.
- Since that time the California economy has improved markedly and the extreme
18
<PAGE>
budgetary pressures have begun to lessen. However, the Asian economic crisis
is expected to continue to have some negative effectt on the State's
economy.
STATE GOVERNMENT
The 1997-98 Budget Act allocated a State budget of approximately $66.9 Billion
and contains no tax increases or reductions. Despite this somewhat improved
state, California's budget is still subject to certain unforeseeable events. For
example:
- In December, 1994, Orange County and its investment pool filed for
bankruptcy. While a settlement has been reached, the full impact on the
State and Orange County is still unknown.
- California faces constant fluctuations in other expenses (including health
and welfare caseloads, property tax receipts, federal funding and natural
disaster relief) that will undoubtedly create new budgetary pressure and
reduce issuers' ability to pay their debts.
- California's general obligation bonds are currently rated A1 by Moody's and
A+ by Standard & Poor's.
OTHER RISKS
Issuers' ability to make payments on bonds (and the remedies available to
bondholders) could also be adversely affected by the following constraints:
- Certain provisions of California's Constitution, laws and regulatory system
contain tax, spending and appropriations limits and prohibit certain new
taxes.
- Certain other California laws subject the users of bond proceeds to strict
rules and limits regarding revenue repayment.
- Bonds of healthcare institutions which are subject to the strict rules and
limits regarding reimbursement payments of California's Medi-Cal program for
health care services to welfare recipients and bonds secured by liens on
real property are two of the types of bonds affected by these provisions.
NEW JERSEY RISKS
STATE AND LOCAL GOVERNMENT
Certain features of New Jersey law could affect the repayment of debt:
- the State of New Jersey and its agencies and public authorities issue
general obligation bonds, which are secured by the full faith and credit of
the state, backed by its taxing authority, without recourse to specific
sources of revenue, therefore, any liability to increase taxes could impair
the state's ability to repay debt; and
- the state is required by law to maintain a balanced budget, and state
spending for any given municipality or county cannot increase by more than
5% per year. This limit could make it harder for any particular county or
municipality to repay its debts.
In recent years the state budget's main expenditures have been
- elementary and secondary education, and
- state agencies and programs, including police and corrections facilities,
higher education, and environmental protection.
19
<PAGE>
The state's general obligations are rated Aa1 by Moody's and AA+ by Standard &
Poor's.
NEW YORK RISKS
GENERALLY
For decades, New York's economy has trailed the rest of the nation. Both the
state and New York City have experienced long-term structural imbalances between
revenues and expenses, and have repeatedly relied substantially on non-recurring
measures to achieve budget balance. The pressures that contribute to budgetary
problems at both the state and local level include:
- the high combined state and local tax burden;
- a decline in manufacturing jobs, leading to above-average unemployment;
- sensitivity to the financial services industry; and
- dependence on federal aid.
STATE GOVERNMENT
The State government frequently has difficulty approving budgets on time. Budget
gaps of $1 billion and $4 billion are projected for the next two years. The
State's general obligation bonds are rated A by Standard & Poor's and A2 by
Moody's. There is $37 billion of state-related debt outstanding.
NEW YORK CITY GOVERNMENT
Even though the City had budget surpluses each year from 1981, budget gaps of $2
billion are projected for each of the next three years. New York City faces
fiscal pressures from:
- aging public facilities that need repair or replacement;
- welfare and medical costs;
- expiring labor contracts; and
- a high and increasing debt burden.
The City requires substantial state aid, and its fiscal strength depends heavily
on the securities industry. Its general obligation bonds are rated A- by
Standard & Poor's and A3 by Moody's.
PENNSYLVANIA RISKS
GENERALLY
Pennsylvania and many of its municipalities (including Philadelphia) have
undergone an economic decline:
- coal, steel, railroads and other heavy industry historically associated with
the Commonwealth has given way to increased competition from foreign
producers.
- agriculture and related industries are still an important part of the
Commonwealth's economy.
- Recently, however, service sector industries (trade, medical and health
services, education and financial services) have provided new sources of
growth.
STATE AND LOCAL GOVERNMENTS
Historically, both the Commonwealth and the City of Philadelphia have
experienced serious revenue shortfalls. At the same time, rising demands for
state and local programs and services (particularly medical assistance and cash
assistance programs) have lead to increased spending.
- In recent years, both the Commonwealth and the City of Philadelphia have
tried to balance their budgets with a mix of tax increases and spending
cuts.
20
<PAGE>
- Philadelphia has considered significant service cuts and privatization of
certain services which it has provided to date.
- In 1991, the Commonwealth created the Pennsylvania Inter-Governmental
Cooperation Authority ("PICA") which it authorized to issue debt to cover
Philadelphia's budget shortfalls, eliminate the City's projected deficits
and fund its capital spending. PICA issued approximately $1.76 billion of
Special Revenue Bonds on Philadelphia's behalf. Its power to issue bonds on
Philadelphia's behalf expired at the end of 1996; as of June 30, 1997,
approximately $1.1 billion in PICA Special Revenue Bonds were outstanding.
- Pennsylvania's general obligation bonds are currently rated A1 by Moody's
and AA- by Standard & Poor's. Philadelphia's general obligation bonds are
rated Baa by Moody's and BBB by Standard & Poor's. There can be no assurance
that these ratings will not be lowered.
BOND QUALITY RISK
A reduction in a bond's rating may decrease its value and, indirectly, the value
of your investment in the Fund.
INSURANCE RELATED RISK
The bonds are backed by insurance companies (as shown under Portfolios).
Insurance policies generally make payments only according to a bond's original
payment schedule and do not make early payments when a bond defaults or becomes
taxable. Although the federal government does not regulate the insurance
business, various state laws and federal initiatives and tax law changes could
significantly affect the insurance business. The claims-paying ability of the
insurance companies is generally rated A or better by Standard & Poor's or
another nationally recognized rating organization. The insurance company ratings
are subject to change at any time at the discretion of the rating agencies.
LITIGATION AND LEGISLATION RISKS
We do not know of any pending litigation that might have a material adverse
effect upon the Fund.
Future tax legislation could affect the value of the portfolio by:
- limiting real property taxes,
- reducing tax rates,
- imposing a flat or other form of tax, or
- exempting investment income from tax.
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:
- ADDING the value of the bonds, net accrued interest, cash and any other Fund
assets;
- 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
- 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.
21
<PAGE>
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. 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 the 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:
- if the New York Stock Exchange is closed (other than customary weekend and
holiday closings);
- 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
- 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 maximum exchange fee of 1.90%. You may exchange units of this Fund for units
of certain other Defined Asset 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
22
<PAGE>
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 initial 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.
In addition, as with mutual funds, the Fund (and therefore the investors) pay
all or some of the costs of organizing the Fund including:
- cost of initial preparation of legal documents;
- federal and state registration fees;
- initial fees and expenses of the Trustee;
- initial audit; and
- legal expenses and other out-of-pocket expenses.
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 tax-exempt bonds has ranged from 0.5% of face amount on actively traded
issues to 3.5% on inactively traded issues; the difference has averaged between
1 and 2%.
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:
- to reimburse the Trustee for the Fund's operating expenses;
- for extraordinary services and costs of indemnifying the Trustee and the
Sponsors;
- costs of actions taken to protect the Fund and other legal fees and
expenses;
- expenses for keeping the Fund's registration statement current; and
- Fund termination expenses and any governmental charges.
The Sponsors are currently reimbursed up to 55 CENTS per $1,000 face amount
annually for providing portfolio supervisory, bookkeeping and administrative
services and for any other expenses properly chargeable to the
23
<PAGE>
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
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; if
a contract to buy any 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 conditions exist or if a bond becomes
taxable.
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 may affect the
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:
- diversity of the portfolio;
- size of the Fund relative to its original size;
- ratio of Fund expenses to income;
- current and long-term returns;
- degree to which units may be selling at a premium over par; and
- 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.
24
<PAGE>
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 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:
- to cure ambiguities;
- to correct or supplement any defective or inconsistent provision;
- to make any amendment required by any governmental agency; or
- 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:
- it fails to perform its duties and the Sponsors determine that its
replacement is in your best interest; or
- 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:
- remove it and appoint a replacement Sponsor;
- liquidate the Fund; or
- continue to act as Trustee without a Sponsor.
Merrill Lynch, Pierce, Fenner & Smith Incorporated acts as agent for the
Sponsors.
25
<PAGE>
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
counsel for the Sponsors, has given an opinion that the units are validly
issued. Special counsel located in the relevant states have given state and
local tax opinions.
AUDITORS
Deloitte & Touche LLP, 2 World Financial Center, New York, New York 10281,
independent accountants, audited the Statements 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
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 Bank of New York, 101 Barclay Street, 17 W, New York, New York 10268, 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 date of 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
26
<PAGE>
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 bonds
contained in a Portfolio, but we cannot predict whether any impact will be
material to the Fund as a whole.
TAXES
The following summary describes some of the important income tax consequences of
holding units. It assumes that you are not a dealer, financial institution,
insurance company or other investor with special circumstances or subject to
special rules. You should consult your own tax adviser about your particular
circumstances.
At the date of issue of each bond, counsel for the issuer delivered an opinion
to the effect that interest on the bond is exempt from regular federal income
tax. However, interest may be subject to state and local taxes and may be taken
into account in determining your preference items for alternative minimum tax
purposes. Neither we nor our counsel have reviewed the issuance of the bonds,
related proceedings or the basis for the opinions of counsel for the issuers. We
cannot assure you that the issuer (or other users) have complied or will comply
with any requirements necessary for a bond to be tax-exempt. If any of the bonds
were determined not to be tax-exempt, you could be required to pay income tax
for current and prior years, and if the Fund were to sell the bond, it might
have to sell it at a substantial discount.
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.
GAIN 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
27
<PAGE>
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 otherwise. If
you are an individual and sell your units after holding them for more than one
year, you may be entitled to a 20% maximum federal tax rate on any resulting
gains. Consult your tax adviser in this regard. Because the deductibility of
capital losses is subject to limitations, you may not be able to deduct all of
your capital losses.
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 not a corporate investor, you will not be entitled to a deduction for
your share of fees and expenses of the Fund. Also, if you borrowed money in
order to purchase or carry your units, you will not be able to deduct the
interest on this borrowing for federal income tax purposes. The IRS may treat
your purchase of units as made with borrowed money even if the money is not
directly traceable to the purchase of units.
STATE AND LOCAL TAXES
Under the income tax laws of the State and City of New York, the Fund will not
be taxed as a corporation. If you are a New York taxpayer, your income from the
Fund will not be tax-exempt in New York except to the extent that the income is
earned on bonds that are tax-exempt for New York purposes. Depending on where
you live, your income from the Fund may be subject to state and local taxation.
You should consult your tax adviser in this regard.
CALIFORNIA TAXES
In the opinion of O'Melveny & Myers LLP, Los Angeles, California, special
counsel on California tax matters:
Under the income tax laws of the State of California, the Trust will not be
taxed as a corporation and you will be considered to own directly your share of
each bond of the Trust. If you are a California taxpayer, your share of the
income from the bonds of the Trust will not be tax-exempt in California except
for California personal income tax purposes and only to the extent that the
income is earned on bonds that are exempt
28
<PAGE>
for such purposes. If you are a California taxpayer and all or part of your
share of a bond is disposed of (for example, when a bond is sold, exchanged or
redeemed at maturity or you sell or exchange your units), you will recognize
gain or loss for California tax purposes. Depending on where you live, your
income from the Trust may be subject to state and local taxation. You should
consult your tax advisor in this regard.
NEW JERSEY TAXES
In the opinion of Drinker Biddle & Reath LLP, Philadelphia, Pennsylvania,
special counsel on New Jersey tax matters:
The Fund will not be taxed as a corporation under the current income tax laws of
the State of New Jersey. Your income from the Fund may be subject to taxation
depending on where you live. If you are a New Jersey taxpayer your income from
the Fund (including gains on sales of bonds by the Fund) and gains on sales of
units by you will be tax-exempt to the extent that income and gains are earned
on bonds that are tax-exempt for New Jersey purposes. You should consult your
tax adviser as to the consequences to you with respect to any investment you
make in the Fund.
PENNSYLVANIA TAXES
In the opinion of Drinker Biddle & Reath LLP, Philadelphia, Pennsylvania,
special counsel on Pennsylvania tax matters:
The Pennsylvania Trust will not be taxed as a corporation under the current
income tax laws of Pennsylvania. Your income from the Trust may be subject to
taxation depending on where you live. If you are a Pennsylvania taxpayer your
interest income from the Trust will be tax exempt to the extent that income is
earned on bonds that are tax exempt for Pennsylvania purposes. However, gains on
the sale of bonds by the Trust or on the sale of your Units will be subject to
Pennsylvania income tax. If you are a Philadelphia resident you may be subject
to the Philadelphia school district tax on any gains realized from the sale of
bonds by the Trust or the sale of Units by you to the extent either the bonds or
Units have been held for six months or less. You should consult your tax adviser
as to the consequences to you with respect to any investment you make in the
Trust.
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 portfolios, 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.
29
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 97 (CALIFORNIA, NEW JERSEY, NEW YORK AND
PENNSYLVANIA TRUSTS)
DEFINED ASSET FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsors, Trustee and Holders
of Municipal Investment Trust Fund,
Multistate Series - 97 (California, New Jersey, New York and
Pennsylvania Trusts)
Defined Asset Funds:
We have audited the accompanying statements of condition of Municipal
Investment Trust Fund, Multistate Series - 97 (California, New Jersey,
New York and Pennsylvania Trusts) Defined Asset Funds, including the
portfolios, as of October 31, 1999 and the related statements of
operations and of changes in net assets for the years ended October
31, 1999, 1998 and 1997. 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 October 31, 1999, as shown
in such portfolios, were confirmed to us by The Bank of New York, 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 Municipal
Investment Trust Fund, Multistate Series - 97 (California, New Jersey,
New York and Pennsylvania Trusts) Defined Asset Funds at October 31,
1999 and the results of their operations and changes in their net
assets for the above-stated years in conformity with generally
accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, N.Y.
January 4, 2000
D - 1
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 97 (CALIFORNIA TRUST),
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
AS OF OCTOBER 31, 1999
TRUST PROPERTY:
Investment in marketable securities - at value
(cost $4,639,441)(Note 1)...................... $4,530,803
Accrued interest receivable...................... 80,951
Deferred organization costs (Note 5)............. 1,011
_____________
Total trust property................. 4,612,765
LESS LIABILITIES:
Advance from Trustee............................. $ 12,336
Accrued expenses................................. 3,625 15,961
_____________ _____________
NET ASSETS, REPRESENTED BY:
4,820 units of fractional undivided
interest outstanding (Note 3).................. 4,580,555
Undistributed net investment income.............. 16,249
_____________
$4,596,804
=============
UNIT VALUE ($4,596,804/4,820 units)................ $953.69
=============
See Notes to Financial Statements.
D - 2
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 97 (CALIFORNIA TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
.......Years Ended October 31,..........
1999 1998 1997
_________________________________________
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income........................... $ 269,770 $275,257 $277,750
Trustee's fees and expenses............... (6,094) (5,973) (7,387)
Sponsors' fees............................ (2,609) (2,246) (2,676)
Organizational expenses................... (1,009) (1,009) (1,009)
_________________________________________
Net investment income..................... 260,058 266,029 266,678
_________________________________________
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain on securities
sold or redeemed........................ 2,409 4,294
Unrealized appreciation (depreciation)
of investments.......................... (486,777) 214,821 187,028
_________________________________________
Net realized and unrealized gain (loss)
on investments.......................... (484,368) 219,115 187,028
_________________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS................. $(224,310) $485,144 $453,706
=========================================
</TABLE>
See Notes to Financial Statements.
D - 3
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 97 (CALIFORNIA TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
.......Years Ended October 31,..........
1999 1998 1997
_________________________________________
<S> <C> <C> <C>
OPERATIONS:
Net investment income....................... $ 260,058 $ 266,029 $ 266,678
Realized gain on securities
sold or redeemed.......................... 2,409 4,294
Unrealized appreciation (depreciation)
of investments............................ (486,777) 214,821 187,028
_________________________________________
Net increase (decrease) in net assets
resulting from operations................. (224,310) 485,144 453,706
_________________________________________
DISTRIBUTIONS TO HOLDERS (Note 2):
Income...................................... (260,500) (265,408) (267,087)
Principal................................... (7,025)
_________________________________________
Total distributions......................... (267,525) (265,408) (267,087)
_________________________________________
CAPITAL SHARE TRANSACTIONS - Redemptions of
127 and 100 units, respectively............. (126,968) (103,113)
_________________________________________
NET INCREASE (DECREASE) IN NET ASSETS......... (618,803) 116,623 186,619
NET ASSETS AT BEGINNING OF YEAR............... 5,215,607 5,098,984 4,912,365
_________________________________________
NET ASSETS AT END OF YEAR..................... $4,596,804 $5,215,607 $5,098,984
=========================================
PER UNIT:
Income distributions during year............ $53.01 $52.99 $52.92
=========================================
Principal distributions during year......... $1.42
=========================================
Net asset value at end of year.............. $953.69 $1,054.30 $1,010.30
=========================================
TRUST UNITS OUTSTANDING AT END OF YEAR........ 4,820 4,947 5,047
=========================================
</TABLE>
See Notes to Financial Statements.
D - 4
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 97 (CALIFORNIA TRUST),
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.
(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 also distributed
periodically.
3. NET CAPITAL
Cost of 4,820 units at Date of Deposit.............. $4,917,088
Less sales charge................................... 219,262
______________
Net amount applicable to Holders.................... 4,697,826
Redemptions of units - net cost of 227 units
redeemed less redemption amounts.................. (8,311)
Realized gain on securities sold or redeemed........ 6,703
Principal distributions............................. (7,025)
Unrealized depreciation of investments.............. (108,638)
______________
Net capital applicable to Holders................... $4,580,555
==============
4. INCOME TAXES
As of October 31, 1999, unrealized depreciation of investments, based
on cost for Federal income tax purposes, aggregated $108,638, all of
which related to depreciated securities. The cost of investment
securities for Federal income tax purposes was $4,639,441 at
October 31, 1999.
5. DEFERRED ORGANIZATIONAL COSTS
Organizational costs have been deferred and are being amortized over
five years.
D - 5
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 97
DEFINED ASSET FUNDS
PORTFOLIO OF THE CALIFORNIA TRUST (INSURED)
AS OF OCTOBER 31, 1999
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities(4) Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
_____________ _________ ______ ______ _____________ _____________ ____ ________
<S> <C> <C> <C> <C> <C> <C> <C>
1 California Statewide Comm. Dev. AAA $ 750,000 5.500% 2023 08/15/03 $ 729,127 $ 705,443
Auth., (Sutter Hlth. Oblig. Grp.) @ 102.000
(MBIA Ins.)
2 Southern California Public Power AAA 750,000 5.000 2020 01/01/03 686,100 664,470
Authority, San Juan Power Project @ 100.000
Revenue Bonds, Ser. 1993 A (MBIA
Ins.)
3 City of Fresno, California, Water AAA 705,000 5.300 2020 06/01/03 672,387 652,703
System Revenue Refunding Bonds, @ 101.000
1993 Ser. A (Financial Guaranty
Ins.)
4 County of Madera, CA, Cert. of AAA 715,000 5.750 2028 03/15/05 709,745 693,557
Part. (Valley Children's Hosp. @ 102.000
Proj.), Ser. 1995 (MBIA Ins.)
5 Poway Redevelopment Agency, AAA 715,000 5.750 2026 12/15/03 707,035 693,936
California, Parguay Redevelopment @ 102.000
Project, Subordinated Tax
Allocation Refunding Revenue Bonds,
Ser. 1993 (Financial Guaranty Ins.)
6 The City of San Diego, CA, Indl. AAA 700,000 5.900 2018 06/01/03 705,047 701,603
Dev. Rev. Rfdg. Bonds (San Diego @ 102.000
Gas & Elec. Co.), Ser. 1993 A
(AMBAC Ins.)
</TABLE>
D - 6
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 97
DEFINED ASSET FUNDS
PORTFOLIO OF THE CALIFORNIA TRUST (INSURED)
AS OF OCTOBER 31, 1999
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities(4) Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
_____________ _________ ______ ______ _____________ _____________ ____ ________
<S> <C> <C> <C> <C> <C> <C> <C>
7 Brea Redevelopment Agency, Orange AAA $ 430,000 5.750% 2023 08/01/03 $ 430,000 $ 419,091
County, California, 1993 Tax @ 102.000
Allocation Refunding Bonds (MBIA
Ins.)
______________ ______________ _____________
TOTAL $4,765,000 $4,639,441 $4,530,803
============== ============== =============
</TABLE>
See Notes to Portfolios on Page D - 24.
D - 7
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 97 (NEW JERSEY TRUST),
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
AS OF OCTOBER 31, 1999
TRUST PROPERTY:
Investment in marketable securities - at value
(cost $2,678,084)(Note 1)...................... $2,611,282
Accrued interest receivable...................... 53,927
Deferred organization costs...................... 657
_____________
Total trust property................. 2,665,866
LESS LIABILITIES:
Advance from Trustee............................. $ 16,755
Accrued expenses................................. 2,759 19,514
_____________ _____________
NET ASSETS, REPRESENTED BY:
2,772 units of fractional undivided
interest outstanding (Note 3).................. 2,637,493
Undistributed net investment income.............. 8,859
_____________
$2,646,352
=============
UNIT VALUE ($2,646,352/2,772 units)................ $954.67
=============
See Notes to Financial Statements.
D - 8
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 97 (NEW JERSEY TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
.......Years Ended October 31,..........
1999 1998 1997
_________________________________________
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income........................... $158,125 $176,297 $179,556
Trustee's fees and expenses............... (4,694) (4,812) (6,180)
Sponsors' fees............................ (1,606) (1,451) (1,739)
Organizational expenses................... (656) (656) (656)
_________________________________________
Net investment income..................... 151,169 169,378 170,981
_________________________________________
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain on securities
sold or redeemed........................ 21,794 8,908
Unrealized appreciation (depreciation)
of investments.......................... (252,392) 121,341 104,300
_________________________________________
Net realized and unrealized gain (loss)
on investments.......................... (230,598) 130,249 104,300
_________________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS................. $(79,429) $299,627 $275,281
=========================================
</TABLE>
See Notes to Financial Statements.
D - 9
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 97 (NEW JERSEY TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
.......Years Ended October 31,..........
1999 1998 1997
_________________________________________
<S> <C> <C> <C>
OPERATIONS:
Net investment income....................... $ 151,169 $ 169,378 $ 170,981
Realized gain on securities
sold or redeemed.......................... 21,794 8,908
Unrealized appreciation (depreciation)
of investments............................ (252,392) 121,341 104,300
_________________________________________
Net increase (decrease) in net assets
resulting from operations................. (79,429) 299,627 275,281
_________________________________________
DISTRIBUTIONS TO HOLDERS (Note 2):
Income...................................... (151,992) (169,062) (171,695)
Principal................................... (24,822)
_________________________________________
Total distributions......................... (176,814) (169,062) (171,695)
_________________________________________
CAPITAL SHARE TRANSACTIONS - Redemptions of
333 and 176 units, respectively............. (343,036) (183,037)
_________________________________________
NET INCREASE (DECREASE) IN NET ASSETS......... (599,279) (52,472) 103,586
NET ASSETS AT BEGINNING OF YEAR............... 3,245,631 3,298,103 3,194,517
_________________________________________
NET ASSETS AT END OF YEAR..................... $2,646,352 $3,245,631 $3,298,103
=========================================
PER UNIT:
Income distributions during year............ $52.13 $52.35 $52.33
=========================================
Principal distributions during year......... $8.54
=========================================
Net asset value at end of year.............. $954.67 $1,045.29 $1,005.21
=========================================
TRUST UNITS OUTSTANDING AT END OF YEAR........ 2,772 3,105 3,281
=========================================
</TABLE>
See Notes to Financial Statements.
D - 10
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 97 (NEW JERSEY TRUST),
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.
(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 also distributed
periodically.
3. NET CAPITAL
Cost of 2,772 units at Date of Deposit.............. $2,850,721
Less sales charge................................... 127,096
______________
Net amount applicable to Holders.................... 2,723,625
Redemptions of units - net cost of 509 units
redeemed less redemption amounts.................. (25,210)
Realized gain on securities sold or redeemed........ 30,702
Principal distributions............................. (24,822)
Net unrealized depreciation of investments.......... (66,802)
______________
Net capital applicable to Holders................... $2,637,493
==============
4. INCOME TAXES
As of October 31, 1999, net unrealized depreciation of investments,
based on cost for Federal income tax purposes, aggregated $66,802, of
which $7,995 related to appreciated securities and $74,797 related to
depreciated securities. The cost of investment securities for Federal
income tax purposes was $2,678,084 at October 31, 1999.
5. DEFERRED ORGANIZATIONAL COSTS
Organizational costs have been deferred and are being amortized over
five years.
D - 11
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 97
DEFINED ASSET FUNDS
PORTFOLIO OF THE NEW JERSEY TRUST (INSURED)
AS OF OCTOBER 31, 1999
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities(4) Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
_____________ _________ ______ ______ _____________ _____________ ____ ________
<S> <C> <C> <C> <C> <C> <C> <C>
1 New Jersey Educl. Fac. Auth., AAA $ 470,000 5.750% 2023 07/01/03 $ 475,165 $ 463,975
Rev. Bonds, Rowan College of New @ 102.000
Jersey Iss., Ser. 1993 A
(AMBAC Ins.)
2 New Jersey Hsg. and Mtge. Fin. AAA 500,000 6.100 2030 05/01/05 507,500 500,595
Agy., Multi-Family Hsg. Rev. Bonds, @ 102.000
1995 Ser. A (AMBAC Ins.)
3 County of Essex, New Jersey, AAA 180,000 5.500 2015 09/01/05 180,000 175,896
General Obligation Refunding Bonds @ 102.000
1995, Ser. A (AMBAC Ins.)
4 The Pollution Ctl. Fin. Auth. of AAA 410,000 5.550 2033 11/01/03 400,484 388,126
Salem Cnty., NJ, Poll. Ctl. Rev. @ 102.000
Rfdg. Bonds, (Public Svc. Elec. &
Gas Co. Proj.), 1993 Ser. C
(MBIA Ins.)
5 The Jersey City Swr. Auth., Hudson AAA 500,000 4.500 2019 01/01/03 434,920 413,215
County, New Jersey, Sewer Revenue @ 100.000
Refunding Bonds, 1993 Ser. B
(Financial Guaranty Ins.)
6 School Bonds of the Board of AAA 500,000 5.650 2025 02/01/07 504,090 485,555
Education of the Township of @ 100.000
Branchburg in the County of
Somerset, New Jersey (Financial
Guaranty Ins.)
</TABLE>
D - 12
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 97
DEFINED ASSET FUNDS
PORTFOLIO OF THE NEW JERSEY TRUST (INSURED)
AS OF OCTOBER 31, 1999
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities(4) Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
_____________ _________ ______ ______ _____________ _____________ ____ ________
<S> <C> <C> <C> <C> <C> <C> <C>
7 The Board of Education of the AAA $ 175,000 5.625% 2020(5) 02/15/03 $ 175,925 $ 183,920
Township of Lumberton in the County @ 102.000
of Burlington, New Jersey, School
Bonds (MBIA Ins.)
______________ ______________ _____________
TOTAL $2,735,000 $2,678,084 $2,611,282
============== ============== =============
</TABLE>
See Notes to Portfolios on Page D - 24.
D - 13
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 97 (NEW YORK TRUST),
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
AS OF OCTOBER 31, 1999
TRUST PROPERTY:
Investment in marketable securities - at value
(cost $2,981,765)(Note 1)...................... $2,868,940
Accrued interest receivable...................... 52,811
Deferred organization costs (Note 5)............. 806
_____________
Total trust property................. 2,922,557
LESS LIABILITIES:
Advance from Trustee............................. $ 20,942
Accrued expenses................................. 2,959 23,901
_____________ _____________
NET ASSETS, REPRESENTED BY:
3,080 units of fractional undivided
interest outstanding (Note 3).................. 2,888,976
Undistributed net investment income.............. 9,680
_____________
$2,898,656
=============
UNIT VALUE ($2,898,656/3,080 units)................ $941.12
=============
See Notes to Financial Statements.
D - 14
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 97 (NEW YORK TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
.......Years Ended October 31,..........
1999 1998 1997
_________________________________________
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income........................... $ 189,327 $203,043 $219,754
Trustee's fees and expenses............... (5,130) (5,193) (6,755)
Sponsors' fees............................ (1,862) (1,731) (2,137)
Organizational expenses................... (808) (808) (808)
_________________________________________
Net investment income..................... 181,527 195,311 210,054
_________________________________________
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain on securities sold
or redeemed............................. 8,907 9,746 548
Unrealized appreciation (depreciation)
of investments.......................... (356,388) 131,739 141,048
_________________________________________
Net realized and unrealized gain (loss)
on investments.......................... (347,481) 141,485 141,596
_________________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS................. $(165,954) $336,796 $351,650
=========================================
</TABLE>
See Notes to Financial Statements.
D - 15
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 97 (NEW YORK TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
.......Years Ended October 31,..........
1999 1998 1997
_________________________________________
<S> <C> <C> <C>
OPERATIONS:
Net investment income....................... $ 181,527 $ 195,311 $ 210,054
Realized gain on securities sold
or redeemed............................... 8,907 9,746 548
Unrealized appreciation (depreciation)
of investments............................ (356,388) 131,739 141,048
_________________________________________
Net increase (decrease) in net assets
resulting from operations................. (165,954) 336,796 351,650
_________________________________________
DISTRIBUTIONS TO HOLDERS (Note 2):
Income...................................... (183,302) (194,853) (210,784)
Principal................................... (6,104) (5,407)
_________________________________________
Total distributions......................... (189,406) (200,260) (210,784)
_________________________________________
CAPITAL SHARE TRANSACTIONS - Redemptions of
597, 324 and 37 units, respectively......... (592,884) (333,050) (37,480)
_________________________________________
NET INCREASE (DECREASE) IN NET ASSETS......... (948,244) (196,514) 103,386
NET ASSETS AT BEGINNING OF YEAR............... 3,846,900 4,043,414 3,940,028
_________________________________________
NET ASSETS AT END OF YEAR..................... $2,898,656 $3,846,900 $4,043,414
=========================================
PER UNIT:
Income distributions during year............ $51.92 $52.03 $52.32
=========================================
Principal distributions during year......... $1.66 $1.39
=========================================
Net asset value at end of year.............. $941.12 $1,046.21 $1,010.60
=========================================
TRUST UNITS OUTSTANDING AT END OF YEAR........ 3,080 3,677 4,001
=========================================
</TABLE>
See Notes to Financial Statements.
D - 16
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 97 (NEW YORK TRUST),
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.
(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 also distributed
periodically.
3. NET CAPITAL
Cost of 3,080 units at Date of Deposit.............. $3,158,389
Less sales charge................................... 140,817
______________
Net amount applicable to Holders.................... 3,017,572
Redemptions of units - net cost of 958 units
redeemed less redemption amounts.................. (23,461)
Realized gain on securities sold or redeemed........ 19,201
Principal distributions............................. (11,511)
Unrealized depreciation of investments.............. (112,825)
______________
Net capital applicable to Holders................... $2,888,976
==============
4. INCOME TAXES
As of October 31, 1999, unrealized depreciation of investments, based
on cost for Federal income tax purposes, aggregated $112,825, all of
which related to depreciated securities. The cost of investment
securities for Federal income tax purposes was $2,981,765 at
October 31, 1999.
5. DEFERRED ORGANIZATIONAL COSTS
Organizational costs have been deferred and are being amortized over
five years.
D - 17
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 97
DEFINED ASSET FUNDS
PORTFOLIO OF THE NEW YORK TRUST (INSURED)
AS OF OCTOBER 31, 1999
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities(4) Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
_____________ _________ ______ ______ _____________ _____________ ____ ________
<S> <C> <C> <C> <C> <C> <C> <C>
1 Dormitory Auth. of the State of AAA $ 600,000 5.500% 2023 07/01/04 $ 591,558 $ 562,284
New York, Fordham Univ., Ins. @ 102.000
Rev. Bonds, Ser. 1994 (Financial
Guaranty Ins.)
2 Dormitory Auth. of the State of AAA 600,000 5.000 2021 07/01/04 551,244 518,586
New York, Mt. Sinai Sch. of @ 102.000
Medicine, Ins. Rev. Bonds, Ser.
1994 A (MBIA Ins.)
3 Dormitory Auth. of the State of AAA 135,000 5.750 2014 07/01/04 136,058 133,670
New York. Univ. of Rochester Strong @ 102.000
Mem. Hos., Rev. Bonds Ser. 1994
(MBIA Ins.)
4 New York State Med. Care Fac. Fin. AAA 495,000 5.375 2014 02/15/04 479,556 470,547
Agy., Mental Hlth. Svc. Fac. Imp. @ 102.000
Rev. Bonds. 1993 Ser. F Rfdg.
(FSAM Ins.)
5 New York State Urban Dev. Corp., AAA 600,000 5.250 2018 01/01/03 574,284 546,852
Correctional Fac. Rev. Bonds, 1993 @ 102.000
Rfdg. Ser. (AMBAC Ins.)
6 New York City, NY, Mun. Wtr. Fin. AAA 240,000 6.000 2017 06/15/02 244,013 241,037
Auth., Wtr. and Swr. Sys. Rev. @ 101.500
Bonds, Fiscal 1993 Ser. A (FSAM
Ins.)
7 Puerto Rico Pub. Bldgs. Auth., AAA 400,000 5.750 2022 07/01/05 405,052 395,964
Govt. Fac. Rev. Bonds, Ser. A @ 101.500
(AMBAC Ins.)
______________ ______________ _____________
TOTAL $3,070,000 $2,981,765 $2,868,940
============== ============== ============
</TABLE>
See Notes to Portfolios on Page D - 24.
D - 18
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 97 (PENNSYLVANIA TRUST),
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
AS OF OCTOBER 31, 1999
TRUST PROPERTY:
Investment in marketable securities - at value
(cost $2,605,897)(Note 1)...................... $2,552,031
Accrued interest receivable...................... 39,915
Deferred organization costs...................... 657
_____________
Total trust property................. 2,592,603
LESS LIABILITIES:
Advance from Trustee............................. $ 2,579
Accrued expenses................................. 2,639 5,218
_____________ _____________
NET ASSETS, REPRESENTED BY:
2,692 units of fractional undivided
interest outstanding (Note 3).................. 2,578,571
Undistributed net investment income.............. 8,814
_____________
$2,587,385
=============
UNIT VALUE ($2,587,385/2,692 units)................ $961.14
=============
See Notes to Financial Statements.
D - 19
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 97 (PENNSYLVANIA TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
.......Years Ended October 31,..........
1999 1998 1997
_________________________________________
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income........................... $150,903 $171,151 $179,313
Trustee's fees and expenses............... (4,554) (4,727) (6,204)
Sponsors' fees............................ (1,468) (1,405) (1,727)
Organizational expenses................... (656) (656) (656)
_________________________________________
Net investment income..................... 144,225 164,363 170,726
_________________________________________
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain on securities sold
or redeemed............................. 14,372 2,611 441
Unrealized appreciation (depreciation)
of investments.......................... (243,907) 99,217 107,870
_________________________________________
Net realized and unrealized gain (loss)
on investments.......................... (229,535) 101,828 108,311
_________________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS................. $(85,310) $266,191 $279,037
=========================================
</TABLE>
See Notes to Financial Statements.
D - 20
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 97 (PENNSYLVANIA TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
.......Years Ended October 31,..........
1999 1998 1997
_________________________________________
<S> <C> <C> <C>
OPERATIONS:
Net investment income....................... $ 144,225 $ 164,363 $ 170,726
Realized gain on securities sold
or redeemed............................... 14,372 2,611 441
Unrealized appreciation (depreciation)
of investments............................ (243,907) 99,217 107,870
_________________________________________
Net increase (decrease) in net assets
resulting from operations................. (85,310) 266,191 279,037
_________________________________________
DISTRIBUTIONS TO HOLDERS (Note 2):
Income...................................... (144,834) (163,829) (171,509)
Principal................................... (8,424) (6,184)
_________________________________________
Total distributions......................... (153,258) (170,013) (171,509)
_________________________________________
CAPITAL SHARE TRANSACTIONS - Redemptions of
335, 112 and 142 units, respectively........ (348,188) (115,530) (141,732)
_________________________________________
NET DECREASE IN NET ASSETS.................... (586,756) (19,352) (34,204)
NET ASSETS AT BEGINNING OF YEAR............... 3,174,141 3,193,493 3,227,697
_________________________________________
NET ASSETS AT END OF YEAR..................... $2,587,385 $3,174,141 $3,193,493
=========================================
PER UNIT:
Income distributions during year............ $52.76 $52.98 $53.03
=========================================
Principal distributions during year......... $3.08 $1.97
=========================================
Net asset value at end of year.............. $961.14 $1,048.61 $1,017.36
=========================================
TRUST UNITS OUTSTANDING AT END OF YEAR........ 2,692 3,027 3,139
=========================================
</TABLE>
See Notes to Financial Statements.
D - 21
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 97 (PENNSYLVANIA TRUST),
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.
(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 also distributed
periodically.
3. NET CAPITAL
Cost of 2,692 units at Date of Deposit.............. $2,777,054
Less sales charge................................... 123,804
______________
Net amount applicable to Holders.................... 2,653,250
Redemptions of units - net cost of 589 units
redeemed less redemption amounts.................. (23,629)
Realized gain on securities sold or redeemed........ 17,424
Principal distributions............................. (14,608)
Net unrealized depreciation of investments.......... (53,866)
______________
Net capital applicable to Holders................... $2,578,571
==============
4. INCOME TAXES
As of October 31, 1999, net unrealized depreciation of investments,
based on cost for Federal income tax purposes, aggregated $53,866, of
which $21,543 related to appreciated securities and $75,409 related to
depreciated securities. The cost of investment securities for Federal
income tax purposes was $2,605,897 at October 31, 1999.
5. DEFERRED ORGANIZATIONAL COSTS
Organizational costs have been deferred and are being amortized over
five years.
D - 22
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 97
DEFINED ASSET FUNDS
PORTFOLIO OF THE PENNSYLVANIA TRUST (INSURED)
AS OF OCTOBER 31, 1999
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities(4) Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
_____________ _________ ______ ______ _____________ _____________ ____ ________
<S> <C> <C> <C> <C> <C> <C> <C>
1 Pennsylvania Intergovernmental AAA $ 460,000 5.600% 2015(5) 06/15/03 $ 454,571 $ 476,114
Cooperation Authority, Special Tax @ 100.000
Revenue Bonds (City of Philadelphia
Funding Program) Ser. 1993 (MBIA
Ins.)
2 Pennsylvania State Higher Educl. AAA 500,000 5.875 2025 07/15/05 503,100 481,675
Facs. Auth., Coll. and Univ. Rev. @ 102.000
Bonds (St. Joseph's Univ. Issue)
(Connie Lee Ins.)
3 Philadelphia Authority For AAA 455,000 5.250 2017 07/01/03 429,670 416,703
Industrial Development, PA, Project @ 102.000
Revenue Refunding Bonds (PGH/CHDC
Parking Facs.), Ser. 1993 (MBIA
Ins.)
4 School Dist. of Philadelphia, PA, AAA 415,000 5.500 2025 09/01/05 406,036 387,373
G.O. Rfdg. Bonds, Ser. 1995 B @ 101.000
(AMBAC Ins.)
5 City Philadelphia, PA, Wtr. and AAA 160,000 5.750 2013 06/15/03 161,164 160,674
Wastewater Rev. Bonds, Ser. 1993 @ 102.000
(MBIA Ins.)
6 Urban Redev. Auth. of Pittsburgh, AAA 490,000 5.650 2024 10/01/03 483,100 467,332
PA, Mtge. Rev. Bonds, 1993 Ser. A @ 102.000
(AMBAC Ins.)
7 Washington County Authority, PA, AAA 170,000 5.625 2022 06/01/03 168,256 162,160
Lease Revenue Refunding Bonds, Ser. @ 100.000
1993 A (Financial Guaranty Ins.)
______________ ______________ _____________
TOTAL $2,650,000 $2,605,897 $2,552,031
============== ============== =============
</TABLE>
See Notes to Portfolios on Page D - 24.
D - 23
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 97 (CALIFORNIA, NEW JERSEY,
NEW YORK AND PENNSYLVANIA TRUSTS)
DEFINED ASSET FUNDS
NOTES TO PORTFOLIOS
AS OF OCTOBER 31, 1999
(1) The ratings of the bonds are by Standard & Poor's Ratings
Group, or by Moody's Investors Service, Inc. if followed by
"(m)", or by Fitch Investors Service, Inc. if followed by
"(f)"; "NR" indicates that this bond is not currently rated by
any of the above-mentioned rating services. These ratings have
been furnished by the Evaluator but not confirmed with
the rating agencies.
(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.
(4) All Securities are insured either on an individual basis or by
portfolio insurance, by a municipal bond insurance company
which has been assigned "AAA" claims paying ability by
Standard & Poor's. Accordingly, Standard & Poor's has assigned
"AAA" ratings to the Securities. Securities covered by
portfolio insurance are rated "AAA" only as long as they
remain in this Trust.
(5) Bonds with aggregate face amounts of $175,000 and $460,000 for New
Jersey and Pennsylvania Trusts, respectively, have been pre-refunded
and are expected to be called for redemption on the optional
redemption provision dates shown.
D - 24
<PAGE>
DEFINED ASSET FUNDS-SM-
<TABLE>
<S> <C>
HAVE QUESTIONS ? MUNICIPAL INVESTMENT TRUST FUND
Request the most MULTISTATE SERIES--97
recent free Information (A Unit Investment Trust)
Supplement that gives more ---------------------------------------
details about the Fund, This Prospectus does not contain
by calling: complete information about the
The Bank of New York investment company filed with the
1-800-221-7771 Securities and Exchange Commission in
Washington, D.C. under the:
- Securities Act of 1933 (file no.
33-62037) and
- Investment Company Act of 1940 (file
no. 811-1777).
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.
15156--1/00
</TABLE>
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND
MULTISTATE SERIES
DEFINED ASSET FUNDS
CONTENTS OF REGISTRATION STATEMENT
This Post-Effective Amendment to the Registration Statement on Form S-6
comprises the following papers and documents:
The facing sheet of Form S-6.
The cross-reference sheet (incorporated by reference to the Cross-Reference
Sheet to the Registration Statement of Defined Asset Funds Municipal Insured
Series, 1933 Act File No. 33-54565).
The Prospectus.
The Signatures.
The following exhibits:
1.1.1-- Form of Standard Terms and Conditions of Trust Effective as of
October 21, 1993 (incorporated by reference to Exhibit 1.1.1 to the
Registration Statement of Municipal Investment Trust Fund, Multistate
Series--48, 1933 Act File No. 33-50247).
4.1 --Consent of the Evaluator.
5.1 --Consent of independent accountants.
9.1 -- Information Supplement (incorporated by reference to Post-Effective
Amendment No. 1 to Exhibit 9.1 to the Registration Statement of
Municipal Investment Trust Fund, Multistate Series--409, 1933 Act File
No. 333-81777).
R-1
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND
MULTISTATE SERIES--97
DEFINED ASSET FUNDS
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT,
MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES--97, DEFINED ASSET FUNDS,
CERTIFIES THAT IT MEETS ALL OF THE REQUIREMENTS FOR EFFECTIVENESS OF THIS
REGISTRATION STATEMENT PURSUANT TO RULE 485(B) UNDER THE SECURITIES ACT OF 1933
AND HAS DULY CAUSED THIS REGISTRATION STATEMENT OR AMENDMENT TO THE REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY
AUTHORIZED IN THE CITY OF NEW YORK AND STATE OF NEW YORK ON THE 12TH DAY OF
JANUARY, 2000.
SIGNATURES APPEAR ON PAGES R-3, R-4, R-5, R-6 AND R-7.
A majority of the members of the Board of Directors of Merrill Lynch,
Pierce, Fenner & Smith Incorporated has signed this Registration Statement or
Amendment to the Registration Statement pursuant to Powers of Attorney
authorizing the person signing this Registration Statement or Amendment to the
Registration Statement to do so on behalf of such members.
A majority of the members of the Board of Directors of Salomon Smith Barney
Inc. has signed this Registration Statement or Amendment to the Registration
Statement pursuant to Powers of Attorney authorizing the person signing this
Registration Statement or Amendment to the Registration Statement to do so on
behalf of such members.
A majority of the members of the Board of Directors of Prudential Securities
Incorporated has signed this Registration Statement or Amendment to the
Registration Statement pursuant to Powers of Attorney authorizing the person
signing this Registration Statement or Amendment to the Registration Statement
to do so on behalf of such members.
A majority of the members of the Executive Committee of the Board of
Directors of PaineWebber Incorporated has signed this Registration Statement or
Amendment to the Registration Statement pursuant to Powers of Attorney
authorizing the person signing this Registration Statement or Amendment to the
Registration Statement to do so on behalf of such members.
A majority of the members of the Board of Directors of Dean Witter Reynolds
Inc. has signed this Registration Statement or Amendment to the Registration
Statement pursuant to Powers of Attorney authorizing the person signing this
Registration Statement or Amendment to the Registration Statement to do so on
behalf of such members.
R-2
<PAGE>
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DEPOSITOR
<TABLE>
<S> <C>
By the following persons, who constitute Powers of Attorney have been filed
a majority of under
the Board of Directors of Merrill Form SE and the following 1933 Act
Lynch, Pierce, File
Fenner & Smith Incorporated: Number: 333-70593
</TABLE>
GEORGE A. SCHIEREN
JOHN L. STEFFENS
By J. DAVID MEGLEN
(As authorized signatory for Merrill Lynch, Pierce,
Fenner & Smith Incorporated and
Attorney-in-fact for the persons listed above)
R-3
<PAGE>
SALOMON SMITH BARNEY INC.
DEPOSITOR
<TABLE>
<S> <C>
By the following persons, who constitute a majority of Powers of Attorney
the Board of Directors of Salomon Smith Barney Inc.: have been filed
under the 1933 Act
File Numbers:
333-63417 and
333-63033
</TABLE>
MICHAEL A. CARPENTER
DERYCK C. MAUGHAN
By GINA LEMON
(As authorized signatory for
Salomon Smith Barney Inc. and
Attorney-in-fact for the persons listed above)
R-4
<PAGE>
PRUDENTIAL SECURITIES INCORPORATED
DEPOSITOR
<TABLE>
<S> <C>
By the following persons, who constitute a majority of Powers of Attorney
the Board of Directors of Prudential Securities have been filed
Incorporated: under Form SE and
the following 1933
Act File Numbers:
33-41631 and
333-15919
</TABLE>
ROBERT C. GOLDEN
ALAN D. HOGAN
A. LAURENCE NORTON, JR.
LELAND B. PATON
VINCENT T. PICA II
MARTIN PFINSGRAFF
HARDWICK SIMMONS
LEE B. SPENCER, JR.
BRIAN M. STORMS
By RICHARD R. HOFFMANN
(As authorized signatory for Prudential Securities
Incorporated and Attorney-in-fact for the persons
listed above)
R-5
<PAGE>
PAINEWEBBER INCORPORATED
DEPOSITOR
<TABLE>
<S> <C>
By the following persons, who constitute Powers of Attorney have been filed
the Board of Directors of PaineWebber under
Incorporated: the following 1933 Act File
Number: 33-55073
</TABLE>
MARGO N. ALEXANDER
TERRY L. ATKINSON
BRIAN M. BAREFOOT
STEVEN P. BAUM
MICHAEL CULP
REGINA A. DOLAN
JOSEPH J. GRANO, JR.
EDWARD M. KERSCHNER
JAMES P. MacGILVRAY
DONALD B. MARRON
ROBERT H. SILVER
MARK B. SUTTON
By ROBERT E. HOLLEY
(As authorized signatory for
PaineWebber Incorporated
and Attorney-in-fact for the persons listed above)
R-6
<PAGE>
DEAN WITTER REYNOLDS INC.
DEPOSITOR
<TABLE>
<S> <C>
By the following persons, who constitute Powers of Attorney have been filed
a majority of under Form SE and the following 1933
the Board of Directors of Dean Witter Act File Numbers: 33-17085,
Reynolds Inc.: 333-13039, 333-47553 and 333-89045
</TABLE>
BRUCE F. ALONSO
RICHARD M. DeMARTINI
RAYMOND J. DROP
JAMES F. HIGGINS
JOHN J. MACK
MITCHELL M. MERIN
STEPHEN R. MILLER
PHILIP J. PURCELL
JOHN H. SCHAEFER
THOMAS C. SCHNEIDER
ALAN A. SCHRODER
ROBERT G. SCOTT
By MICHAEL D. BROWNE
(As authorized signatory for
Dean Witter Reynolds Inc.
and Attorney-in-fact for the persons listed above)
R-7
EXHIBIT 4.1
STANDARD & POOR'S
A DIVISION OF THE McGRAW-HILL COMPANIES
J. J. KENNY
65 BROADWAY
NEW YORK, N.Y. 10006-2551
TELEPHONE (212) 770-4422
FAX 212/797-8681
January 12, 2000
Frank A. Ciccotto, Jr.
Vice President
Tax-Exempt Evaluations
<TABLE>
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Defined Asset Funds
P.O. Box 9051
Princeton, New Jersey 08543-9051
The Bank of New York
101 Barclay Street
New York, New York 10286
</TABLE>
RE: MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES--97, DEFINED ASSET FUNDS
Gentlemen:
We have examined the post-effective Amendment to the Registration Statement
File No. 33-62037 for the above-captioned trust. We hereby acknowledge that
Kenny S&P Evaluation Services, a division of J. J. Kenny Co., Inc. is currently
acting as the evaluator for the trust. We hereby consent to the use in the
Amendment of the reference to Kenny S&P Evaluation Services, a division of J. J.
Kenny Co., Inc. as evaluator.
In addition, we hereby confirm that the ratings indicated in the
above-referenced Amendment to the Registration Statement for the respective
bonds comprising the trust portfolio are the ratings currently indicated in our
KENNYBASE database.
You are hereby authorized to file copies of this letter with the Securities
and Exchange Commission.
Sincerely,
FRANK A. CICCOTTO
Vice President
Exhibit 5.1
CONSENT OF INDEPENDENT ACCOUNTANTS
The Sponsors and Trustee of
Municipal Investment Trust Fund--Multistate Series--97 (California, New Jersey,
New York and Pennsylvania Trusts), Defined Asset Funds
We consent to the use in this Post-Effective Amendment No. 5 to Registration
Statement No. 33-62037 of our opinion dated January 4, 2000 appearing in the
Prospectus, which is part of such Registration Statement, and to the reference
to us under the heading "Miscellaneous--Auditors" in such Prospectus.
DELOITTE & TOUCHE LLP
New York, N.Y.
January 12, 2000
