<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 19, 1999
REGISTRATION NO. 333-00867
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------------
POST-EFFECTIVE AMENDMENT NO. 3
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--203
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:
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
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
D. NAMES AND COMPLETE ADDRESSES OF AGENTS FOR SERVICE:
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
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, 1999.
Check box if it is proposed that this filing will become effective on May 28,
1999 pursuant to paragraph (b) of Rule 485. / x /
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<PAGE>
<PAGE>
DEFINED ASSET FUNDSSM
- --------------------------------------------
- ----------------------------------
MUNICIPAL INVESTMENT TRUST FUND
MULTISTATE SERIES--203
(A UNIT INVESTMENT TRUST)
O CALIFORNIA, FLORIDA, MARYLAND, NEW YORK AND
OHIO PORTFOLIOS
O PORTFOLIOS OF LONG-TERM MUNICIPAL BONDS
O DESIGNED FOR FEDERALLY TAX-FREE INCOME
O EXEMPT FROM SOME STATE TAXES
O MONTHLY DISTRIBUTIONS
SPONSORS:
Merrill Lynch,
Pierce, Fenner & Smith -------------------------------------------------
Incorporated The Securities and Exchange Commission has not
Salomon Smith Barney Inc. approved or disapproved these Securities or
Prudential Securities passed upon the adequacy of this prospectus. Any
Incorporated representation to the contrary is a criminal
PaineWebber Incorporated offense.
Dean Witter Reynolds Inc. Prospectus dated May 28, 1999.
<PAGE>
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Def ined Asset FundsSM
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:
o A disciplined strategy of buying and holding with a long-term view is the
cornerstone of Defined Asset Funds.
o Fixed portfolio: Defined Funds follow a buy and hold investment strategy;
funds are not managed and portfolio changes are limited.
o Defined Portfolios: We choose the stocks and bonds in advance, so you know
what you're investing in.
o Professional research: Our dedicated research team seeks out stocks or bonds
appropriate for a particular fund's objectives.
o Ongoing supervision: We monitor each portfolio on an ongoing basis.
No matter what your investment goals, tolerance for risk or time horizon,
there's probably a Defined Asset Fund that suits your investment style. Your
financial professional can help you select a Defined Asset Fund that works best
for your investment portfolio.
THE FINANCIAL INFORMATION IN THIS PROSPECTUS IS AS OF FEBRUARY 28, 1999, THE
EVALUATION DATE.
CONTENTS
PAGE
-----------
California Insured Portfolio--
Risk/Return Summary.................................. 3
Florida Insured Portfolio-- Risk/Return Summary......... 6
Maryland Portfolio--Risk/Return Summary................. 9
New York Portfolio--
Risk/Return Summary.................................. 12
Ohio Insured Portfolio--
Risk/Return Summary.................................. 15
What You Can Expect From Your Investment................ 20
Monthly Income....................................... 20
Return Figures....................................... 20
Records and Reports.................................. 20
The Risks You Face...................................... 21
Interest Rate Risk................................... 21
Call Risk............................................ 21
Reduced Diversification Risk......................... 21
Liquidity Risk....................................... 21
Concentration Risk................................... 21
State Concentration Risk............................. 25
Bond Quality Risk.................................... 25
Insurance Related Risk............................... 25
Litigation and Legislation Risks..................... 25
Selling or Exchanging Units............................. 25
Sponsors' Secondary Market........................... 26
Selling Units to the Trustee......................... 26
Exchange Option...................................... 26
How The Fund Works...................................... 27
Pricing.............................................. 27
Evaluations.......................................... 27
Income............................................... 27
Expenses............................................. 27
Portfolio Changes.................................... 28
Fund Termination..................................... 28
Certificates......................................... 29
Trust Indenture...................................... 29
Legal Opinion........................................ 30
Auditors............................................. 30
Sponsors............................................. 30
Trustee.............................................. 30
Underwriters' and Sponsors' Profits 30
Public Distribution.................................. 31
Code of Ethics....................................... 31
Year 2000 Issues..................................... 31
Taxes................................................... 31
Supplemental Information................................ 34
Financial Statements.................................... D-1
2
<PAGE>
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CALIFORNIA INSURED PORTFOLIO--RISK/RETURN SUMMARY
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?
O The Fund plans to hold to maturity 7 long-term tax-exempt
municipal bonds with an aggregate face amount of
$3,350,000.
o The Fund is a unit investment trust which means that,
unlike a mutual fund, the Portfolio is not managed.
o The bonds are rated AAA or Aaa by Standard & Poor's,
Moody's or Fitch.
o Many of the bonds can be called at a premium declining over
time to par value. Some bonds may be called earlier at par
for extraordinary reasons.
o 16% 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:
APPROXIMATE
PORTFOLIO
PERCENTAGE
/ / Hospital/Health Care 30%
/ / Lease Rental Appropriation 11%
/ / Special Tax 45%
/ / Municipal Electric Utilities 14%
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE FUND. THIS CAN
HAPPEN FOR VARIOUS REASONS, INCLUDING:
o Rising interest rates, an issuer's worsening financial
condition or a drop in bond ratings can reduce the price of
your units.
o Because the Fund is concentrated in hospital/health care
and special tax bonds, adverse developments in these
sectors may affect the value of your units.
o Assuming no changes in interest rates, when you sell your
units, they will generally be worth less than your cost
because your cost included a sales fee.
o The Fund will receive early returns of principal if bonds
are called or sold before they mature. If this happens your
income will decline and you may not be able to reinvest the
money you receive at as high a yield or as long a maturity.
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.
3
<PAGE>
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.
DEFINING YOUR INCOME
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 $ 4.39
Annual Income per unit: $ 52.68
These figures are estimates determined on the evaluation
day; actual payments may vary.
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay,
directly or indirectly, when you invest in the Fund.
INVESTOR FEES
Maximum Sales Fee (Load) on new
purchases (as a percentage of
$1,000 invested) 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:
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
----------------------------------- -----------------
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%
ESTIMATED ANNUAL FUND OPERATING EXPENSES
AMOUNT
PER UNIT
-----------
$ 0.69
Trustee's Fee
$ 0.45
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses)
$ 0.39
Evaluator's Fee
$ 0.20
Organization Costs
$ 0.20
Other Operating Expenses
-----------
$ 1.93
TOTAL
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 March 31, 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 3/31/99.
NO SALES
WITH SALES FEE FEE
1 YEAR 5 YEARS 1 YEAR 5 YEARS
- -------------------------------------------------------------------
High 4.57% 7.62% 7.61% 8.82%
Average 2.32 5.66 5.52 6.70
Low 0.40 4.27 3.11 5.10
- -------------------------------------------------------------------
Average
Sales fee 3.18% 5.10%
- ----------------------------------------------------------------
Note: All returns represent changes in unit price with distributions reinvested
into the Municipal Fund Investment Accumulation Program.
8. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed and bonds are
not sold because of market changes. Rather, experienced
Defined Asset Funds financial analysts regularly review the
bonds in the Fund. The Fund may sell a bond if certain
adverse credit or other conditions exist.
4
<PAGE>
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 $1,047.83
(as of February 28, 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 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.
5
<PAGE>
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FLORIDA INSURED PORTFOLIO--RISK/RETURN SUMMARY
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?
O The Fund plans to hold to maturity 7 long-term tax-exempt
municipal bonds with an aggregate face amount of
$2,690,000.
o The Fund is a unit investment trust which means that,
unlike a mutual fund, the Portfolio is not managed.
o The bonds are rated AAA or Aaa by Standard & Poor's,
Moody's or Fitch.
o Many of the bonds can be called at a premium declining over
time to par value. Some bonds may be called earlier at par
for extraordinary reasons.
o 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:
APPROXIMATE
PORTFOLIO
PERCENTAGE
/ / Airports/Ports/Highways 35%
/ / General Obligation 15%
/ / Refunded Bonds 19%
/ / Solid Waste Disposal 5%
/ / Special Tax 26%
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE FUND. THIS CAN
HAPPEN FOR VARIOUS REASONS, INCLUDING:
o Rising interest rates, an issuer's worsening financial
condition or a drop in bond ratings can reduce the price of
your units.
o Because the Fund is concentrated in airports/ports/highways
and special tax bonds, adverse developments in these
sectors may affect the value of your units.
o Assuming no changes in interest rates, when you sell your
units, they will generally be worth less than your cost
because your cost included a sales fee.
o The Fund will receive early returns of principal if bonds
are called or sold before they mature. If this happens your
income will decline and you may not be able to reinvest the
money you receive at as high a yield or as long a maturity.
ALSO, THE PORTFOLIO IS CONCENTRATED IN BONDS OF FLORIDA SO
IT IS LESS DIVERSIFIED THAN A NATIONAL FUND AND IS SUBJECT
TO RISKS PARTICULAR TO FLORIDA WHICH ARE BRIEFLY DESCRIBED
UNDER STATE CONCENTRATION RISKS LATER IN THIS PROSPECTUS.
6
<PAGE>
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.
DEFINING YOUR INCOME
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 $ 4.26
Annual Income per unit: $ 51.21
These figures are estimates determined on the evaluation
day; actual payments may vary.
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay,
directly or indirectly, when you invest in the Fund.
INVESTOR FEES
Maximum Sales Fee (Load) on new
purchases (as a percentage of
$1,000 invested) 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:
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
----------------------------------- -----------------
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%
ESTIMATED ANNUAL FUND OPERATING EXPENSES
AMOUNT
PER UNIT
-----------
$ 0.69
Trustee's Fee
$ 0.44
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses)
$ 0.48
Evaluator's Fee
$ 0.20
Organization Costs
$ 0.33
Other Operating Expenses
-----------
$ 2.14
TOTAL
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
Florida 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 Florida Series
were offered between August 25, 1988 and December 6, 1996
and were outstanding on March 31, 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 3/31/99.
WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 10 YEARS 1 YEAR 5 YEARS 10 YEARS
- -------------------------------------------------------------------
High 4.94% 7.40% 6.95% 7.59% 8.61% 7.55%
Average 2.24 5.62 6.79 5.45 6.67 7.39
Low -0.66 4.39 6.71 3.15 5.28 7.31
- -------------------------------------------------------------------
Average
Sales fee 3.19% 5.13% 5.82%
- ----------------------------------------------------------------
Note: All returns represent changes in unit price with distributions reinvested
into the Municipal Fund Investment Accumulation Program.
8. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed and bonds are
not sold because of market changes. Rather, experienced
Defined Asset Funds financial analysts regularly review the
bonds in the Fund. The Fund may sell a bond if certain adverse
credit or other conditions exist.
7
<PAGE>
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 $1,038.75
(as of February 28, 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 Florida state and local taxes if you live in
Florida.
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. 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.
8
<PAGE>
- --------------------------------------------------------------------------------
MARYLAND PORTFOLIO--RISK/RETURN SUMMARY
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?
O The Fund plans to hold to maturity 7 long-term tax-exempt
municipal bonds with an aggregate face amount of
$3,130,000.
o The Fund is a unit investment trust which means that,
unlike a mutual fund, the Portfolio is not managed.
o The bonds are rated AAA or Aaa by Standard & Poor's,
Moody's or Fitch.
o Many of the bonds can be called at a premium declining over
time to par value. Some bonds may be called earlier at par
for extraordinary reasons.
o 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:
APPROXIMATE
PORTFOLIO
PERCENTAGE
/ / General Obligation 11%
/ / Hospitals/Health Care 45%
/ / Housing 16%
/ / Industrial Development Revenue 12%
/ / Refunded Bonds 16%
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE FUND. THIS CAN
HAPPEN FOR VARIOUS REASONS, INCLUDING:
o Rising interest rates, an issuer's worsening financial
condition or a drop in bond ratings can reduce the price of
your units.
o Because the Fund is concentrated in hospital/health care
bonds, adverse developments in this sector may affect the
value of your units.
o Assuming no changes in interest rates, when you sell your
units, they will generally be worth less than your cost
because your cost included a sales fee.
o The Fund will receive early returns of principal if bonds
are called or sold before they mature. If this happens your
income will decline and you may not be able to reinvest the
money you receive at as high a yield or as long a maturity.
ALSO, THE PORTFOLIO IS CONCENTRATED IN BONDS OF MARYLAND SO
IT IS LESS DIVERSIFIED THAN A NATIONAL FUND AND IS SUBJECT
TO RISKS PARTICULAR TO MARYLAND WHICH ARE BRIEFLY DESCRIBED
UNDER STATE CONCENTRATION RISKS LATER IN THIS PROSPECTUS.
9
<PAGE>
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.
DEFINING YOUR INCOME
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 $ 4.42
Annual Income per unit: $ 53.08
These figures are estimates determined on the evaluation
day; actual payments may vary.
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay,
directly or indirectly, when you invest in the Fund.
INVESTOR FEES
Maximum Sales Fee (Load) on new
purchases (as a percentage of
$1,000 invested) 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:
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
----------------------------------- -----------------
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%
ESTIMATED ANNUAL FUND OPERATING EXPENSES
AMOUNT
PER UNIT
-----------
$ 0.69
Trustee's Fee
$ 0.45
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses)
$ 0.41
Evaluator's Fee
$ 0.20
Organization Costs
$ 0.24
Other Operating Expenses
-----------
$ 1.99
TOTAL
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
Maryland 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 Maryland Series
were offered between March 2, 1989 and September 27, 1996
and were outstanding on March 31, 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 3/31/99.
WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 1 YEAR 5 YEARS
- ---------------------------------------------------------------
High 3.51% 7.22% 6.44% 8.42%
Average 2.38 5.47 5.09 6.49
Low -0.34 4.57 3.98 5.35
- ---------------------------------------------------------------
Average
Sales fee 2.69% 5.03%
- ----------------------------------------------------------------
Note: All returns represent changes in unit price with distributions reinvested
into the Municipal Fund Investment Accumulation Program.
8. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed and bonds are
not sold because of market changes. Rather, experienced
Defined Asset Funds financial analysts regularly review the
bonds in the Fund. The Fund may sell a bond if certain
adverse credit or other conditions exist.
10
<PAGE>
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 $1,031.74
(as of February 28, 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 Maryland state and local personal income
taxes if you live in Maryland.
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.
11
<PAGE>
- --------------------------------------------------------------------------------
NEW YORK PORTFOLIO--RISK/RETURN SUMMARY
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?
O The Fund plans to hold to maturity 7 long-term tax-exempt
municipal bonds with an aggregate face amount of
$2,995,000.
o The Fund is a unit investment trust which means that,
unlike a mutual fund, the Portfolio is not managed.
o The bonds are rated AAA or Aaa by Standard & Poor's,
Moody's or Fitch.
o Many of the bonds can be called at a premium declining over
time to par value. Some bonds may be called earlier at par
for extraordinary reasons.
The Portfolio consists of municipal bonds of the following
types:
APPROXIMATE
PORTFOLIO
PERCENTAGE
/ / Housing 7%
/ / Lease Rental Appropriation 17%
/ / Miscellaneous 15%
/ / Refunded Bonds 11%
/ / Special Tax 33%
/ / Universities/Colleges 17%
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE FUND. THIS CAN
HAPPEN FOR VARIOUS REASONS, INCLUDING:
o Rising interest rates, an issuer's worsening financial
condition or a drop in bond ratings can reduce the price of
your units.
o Because the Fund is concentrated in special tax bonds,
adverse developments in this sector may affect the value of
your units.
o Assuming no changes in interest rates, when you sell your
units, they will generally be worth less than your cost
because your cost included a sales fee.
o The Fund will receive early returns of principal if bonds
are called or sold before they mature. If this happens your
income will decline and you may not be able to reinvest the
money you receive at as high a yield or as long a maturity.
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.
12
<PAGE>
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.
DEFINING YOUR INCOME
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 $ 4.43
Annual Income per unit: $ 53.21
These figures are estimates determined on the evaluation
day; actual payments may vary.
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay,
directly or indirectly, when you invest in the Fund.
INVESTOR FEES
Maximum Sales Fee (Load) on new
purchases (as a percentage of
$1,000 invested) 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:
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
----------------------------------- -----------------
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%
ESTIMATED ANNUAL FUND OPERATING EXPENSES
AMOUNT
PER UNIT
-----------
$ 0.69
Trustee's Fee
$ 0.45
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses)
$ 0.43
Evaluator's Fee
$ 0.20
Organization Costs
$ 0.29
Other Operating Expenses
-----------
$ 2.06
TOTAL
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 March 31, 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 3/31/99.
WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 10 YEARS 1 YEAR 5 YEARS 10 YEARS
- -------------------------------------------------------------------
High 5.38% 7.23% 7.44% 7.65% 8.43% 8.04%
Average 2.37 5.33 7.17 5.49 6.33 7.76
Low -0.98 4.23 7.00 3.37 5.12 7.59
- -------------------------------------------------------------------
Average
Sales fee 3.11% 4.90% 5.77%
- ----------------------------------------------------------------
Note: All returns represent changes in unit price with distributions reinvested
into the Municipal Fund Investment Accumulation Program.
8. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed and bonds are
not sold because of market changes. Rather, experienced
Defined Asset Funds financial analysts regularly review the
bonds in the Fund. The Fund may sell a bond if certain
adverse credit or other conditions exist.
13
<PAGE>
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 $1,046.19
(as of February 28, 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 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 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.
14
<PAGE>
- --------------------------------------------------------------------------------
OHIO INSURED PORTFOLIO--RISK/RETURN SUMMARY
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
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?
O The Fund plans to hold to maturity 7 long-term tax-exempt
municipal bonds with an aggregate face amount of
$3,205,000.
o The Fund is a unit investment trust which means that,
unlike a mutual fund, the Portfolio is not managed.
o When the bonds were initially deposited they were rated A
or better by Standard & Poor's, Moody's or Fitch. The
quality of the bonds may currently be lower.
o Many of the bonds can be called at a premium declining over
time to par value. Some bonds may be called earlier at par
for extraordinary reasons.
o 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:
APPROXIMATE
PORTFOLIO
PERCENTAGE
/ / General Obligation 69%
/ / Hospital/Health Care 16%
/ / Universities/Colleges 15%
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE FUND. THIS CAN
HAPPEN FOR VARIOUS REASONS, INCLUDING:
o Rising interest rates, an issuer's worsening financial
condition or a drop in bond ratings can reduce the price of
your units.
o Because the Fund is concentrated in general obligation
bonds, adverse developments in this sector may affect the
value of your units.
o Assuming no changes in interest rates, when you sell your
units, they will generally be worth less than your cost
because your cost included a sales fee.
o The Fund will receive early returns of principal if bonds
are called or sold before they mature. If this happens your
income will decline and you may not be able to reinvest the
money you receive at as high a yield or as long a maturity.
ALSO, THE PORTFOLIO IS CONCENTRATED IN BONDS OF OHIO SO IT
IS LESS DIVERSIFIED THAN A NATIONAL FUND AND IS SUBJECT TO
RISKS PARTICULAR TO OHIO WHICH ARE BRIEFLY DESCRIBED UNDER
STATE CONCENTRATION RISKS LATER IN THIS PROSPECTUS.
15
<PAGE>
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 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.
DEFINING YOUR INCOME
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 $ 4.30
Annual Income per unit: $ 51.68
These figures are estimates determined on the evaluation
day; actual payments may vary.
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay,
directly or indirectly, when you invest in the Fund.
INVESTOR FEES
Maximum Sales Fee (Load) on new
purchases (as a percentage of
$1,000 invested) 2.90%
Employees of some of the Sponsors and their affiliates may
be charged a reduced sales fee of no less than $5.00 per
unit.
The maximum sales fee is reduced if you invest at least
$100,000, as follows:
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
----------------------------------- -----------------
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%
ESTIMATED ANNUAL FUND OPERATING EXPENSES
AMOUNT
PER UNIT
-----------
$ 0.69
Trustee's Fee
$ 0.45
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses)
$ 0.41
Evaluator's Fee
$ 0.20
Organization Costs
$ 0.21
Other Operating Expenses
-----------
$ 1.96
TOTAL
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
Ohio 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 Ohio Series were
offered between September 22, 1988 and September 13, 1996
and were outstanding on March 31, 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 3/31/99.
WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 1 YEAR 5 YEARS
- ---------------------------------------------------------------
High 3.25% 6.88% 7.87% 8.09%
Average 2.12 5.39 5.14 6.48
Low 0.03 4.39 3.30 5.23
- ---------------------------------------------------------------
Average
Sales fee 3.01% 5.37%
- -------------------------------------------------------------------
Note: All returns represent changes in unit price with distributions reinvested
into the Municipal Fund Investment Accumulation Program.
8. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed and bonds are
not sold because of market changes. Rather, experienced
Defined Asset Funds financial analysts regularly review the
bonds in the Fund. The Fund may sell a bond if certain
adverse credit or other conditions exist.
16
<PAGE>
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 $1,041.23
(as of February 28, 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 Ohio state and local personal income taxes
if you live in Ohio.
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. 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.
17
<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% 7% 7.5% 8%
IS EQUIVALENT TO A TAXABLE YIELD OF
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <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 9.39 10.01
$ 25,751- 62,450 $ 43,051-104,050 34.70 6.13 6.89 7.66 8.42 9.19 9.95 10.72 11.48 12.25
$ 62,451-130,250 $104,051-158,550 37.42 6.39 7.19 7.99 8.79 9.59 10.39 11.19 11.98 12.78
$130,251-283,150 $158,551-283,150 41.95 6.89 7.75 8.61 9.47 10.34 11.20 12.06 12.92 13.78
OVER $283,151 OVER $283,151 45.22 7.30 8.21 9.13 10.04 10.95 11.87 12.78 13.69 14.60
</TABLE>
FOR FLORIDA RESIDENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EFFECTIVE
TAXABLE INCOME 1999* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 3% 3.5% 4% 4.5% 5% 5.5% 6% 6.5% 7%
IS EQUIVALENT TO A TAXABLE YIELD OF
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 25,750 $ 0- 43,050 15.00 3.53 4.12 4.71 5.29 5.88 6.47 7.06 7.65 8.24
$ 27,751- 62,450 $ 43,051-104,050 28.00 4.17 4.86 5.56 6.25 6.94 7.64 8.33 9.03 9.72
$ 62,451-130,250 $104,051-158,550 31.00 4.35 5.07 5.80 6.52 7.25 7.97 8.70 9.42 10.14
$130,251-283,150 $158,551-283,150 36.00 4.69 5.47 6.25 7.03 7.81 8.59 9.38 10.16 10.94
OVER $283,151 OVER $283,151 39.60 4.97 5.79 6.62 7.45 8.28 9.11 9.93 10.76 11.59
</TABLE>
FOR MARYLAND RESIDENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 1998* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 3% 3.5% 4% 4.5% 5% 5.5% 6% 6.5%
IS EQUIVALENT TO A TAXABLE YIELD OF
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 25,350 $ 0- 42,350 19.21 3.71 4.33 4.95 5.57 6.18 6.81 7.43 8.05
$ 25,350- 81,400 $ 42,350-102,300 31.50 4.38 5.11 5.84 6.58 7.31 8.04 8.77 9.50
$ 81,400-128,100 $102,300-155,950 34.42 4.57 5.34 6.10 6.88 7.82 8.39 9.15 9.91
$128,100-278,450 $155,950-278,450 39.17 4.93 5.76 6.58 7.40 8.22 9.04 9.85 10.89
OVER $278,450 OVER $278,450 42.59 5.23 6.10 6.97 7.84 8.71 9.50 10.46 11.32
</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 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, you should consult your own tax advisers in this
regard.
18
<PAGE>
- --------------------------------------------------------------------------------
TAX-FREE VS. TAXABLE INCOME: A COMPARISON OF TAXABLE AND TAX-FREE YIELDS
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% 7% 7.5% 8%
IS EQUIVALENT TO A TAXABLE YIELD OF
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <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 9.82 10.47
$ 0-25,750- 23.63 5.24 5.89 6.55 7.20 7.86 8.51 9.17 9.82 10.48
$ 25,751- 62,450 $ 43,051-104,050 35.35 6.19 6.96 7.73 8.51 9.28 10.05 10.83 11.60 12.37
$ 62,451-130,250 $104,051-158,550 38.04 6.46 7.26 8.07 8.88 9.68 10.49 11.30 12.11 12.91
$130,251-283,150 $158,551-283,150 42.53 6.96 7.83 8.70 9.57 10.44 11.31 12.18 13.05 13.92
OVER $283,151 OVER $283,151 45.77 7.38 8.30 9.22 10.14 11.06 11.98 12.91 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% 7% 7.5% 8%
IS EQUIVALENT TO A TAXABLE YIELD OF
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <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 9.47 10.10
$ 25,751- 62,450 $ 43,051-104,050 32.93 5.96 6.71 7.46 8.20 8.95 9.69 10.44 11.18 11.93
$ 62,451-130,250 $104,051-158,550 35.73 6.22 7.00 7.78 8.56 9.34 10.11 10.69 11.67 12.45
$130,251-283,150 $158,551-283,150 40.38 6.71 7.55 8.39 9.23 10.06 10.90 11.74 12.58 13.42
OVER $283,151 OVER $283,151 43.74 7.11 8.00 8.89 9.78 10.66 11.55 12.44 13.33 14.22
</TABLE>
FOR OHIO 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% 7% 7.5% 8%
IS EQUIVALENT TO A TAXABLE YIELD OF
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 43,050 19.01 4.94 5.56 6.17 6.79 7.41 8.03 8.64 9.26 9.88
$ 0- 25,750 18.43 4.90 5.52 6.13 6.74 7.36 7.97 8.58 9.20 9.81
$ 43,051-104,050 32.50 5.93 6.67 7.41 8.15 8.89 9.63 10.37 11.11 11.85
$ 25,751- 62,450 31.39 5.83 6.56 7.29 8.02 8.75 9.47 10.20 10.93 11.66
$ 62,451-130,250 $104,051-158,550 35.32 6.18 6.96 7.73 8.50 9.28 10.05 10.82 11.59 12.37
$130,251-283,150 $158,551-283,150 40.35 6.71 7.54 8.38 9.22 10.06 10.90 11.74 12.57 13.41
OVER $283,151 OVER $283,151 43.71 7.11 7.99 8.88 9.77 10.66 11.55 12.43 13.32 14.21
</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.
19
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WHAT YOU CAN EXPECT FROM YOUR INVESTMENT
MONTHLY INCOME
The Fund will pay you regular monthly income. Your monthly income may vary
because of:
o elimination of one or more bonds from the Fund's portfolio because of
calls, redemptions or sales;
o a change in the Fund's expenses; or
o the failure by a bond's issuer to pay interest.
Changes in interest rates generally will not affect your 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):
Estimated Annual Estimated
Interest Income - Annual Expenses
- -------------------------------------------------
Unit Price
Estimated Long Term Return is a measure of the estimated return over the
estimated life of the Fund. Unlike Estimated Current Return, Estimated Long Term
Return reflects maturities, discounts and premiums of the bonds in the Fund. It
is an average of the yields to maturity (or in certain cases, to an earlier call
date) of the individual bonds in the portfolio, adjusted to reflect the Fund's
maximum sales fee and estimated expenses. We calculate the average yield for the
portfolio by weighting each bond's yield by its market value and the time
remaining to the call or maturity date.
Yields on individual bonds depend on many factors including general conditions
of the bond markets, the size of a particular offering and the maturity and
quality rating of the particular issues. Yields can vary among bonds with
similar maturities, coupons and ratings.
These return quotations are designed to be comparative rather than predictive.
RECORDS AND REPORTS
You will receive:
o a monthly statement of income payments and any principal payments;
o a notice from the Trustee when new bonds are deposited in exchange or
substitution for bonds originally deposited;
o an annual report on Fund activity; and
o annual tax information. This will also be sent to the IRS. You must report the
amount of tax-exempt interest received during the year.
You may request:
o copies of bond evaluations to enable you to comply with federal and state tax
reporting requirements; and
o audited financial statements of the Fund.
You may inspect records of Fund transactions at the Trustee's office during
regular business hours.
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<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:
o it no longer needs the money for the original purpose;
o the project is condemned or sold;
o the project is destroyed and insurance proceeds are used to redeem the
bonds;
o any related credit support expires and is not replaced; or
o 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 and Maryland Portfolios'
concentration in hospital and health care bonds.
o 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;
o hospitals face increasing competition resulting from hospital mergers and
affiliations;
o hospitals need to reduce costs as HMOs increase market penetration and
hospital supply and drug companies raise prices;
o hospitals and health care providers are subject to various legal claims by
patients and others and are adversely affected by increasing costs of
insurance; and
21
<PAGE>
o 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;
o 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
o 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 California, Florida and New York
Portfolios' concentrations in special tax bonds. Special tax bonds are payable
from and secured by the revenues a municipality derives from a particular tax;
for example, a tax on hotel rentals, on the purchase of food and beverages, car
rentals, or liquor consumption. These bonds are not secured by general tax
revenues. Payment on these bonds may be adversely affected by:
o a reduction in revenues resulting from a decline in the local economy or
population; or
o a decline in the consumption, use or cost of the goods and services that
are subject to taxation.
Here is what you should know about the Ohio Portfolios' concentration in general
obligation bonds.
o general obligation bonds are backed by the issuer's pledge of its full
faith, credit and taxing power;
o 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
o 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 Florida Portfolios' concentration in
airport/port/highway bonds. These bonds are dependent for payment on revenues
from financial projects including:
o user fees from ports and airports;
o tolls on turnpikes and bridges;
o rents from buildings; and
o additional financial resources including
--federal and state subsidies,
--lease rentals paid by state or local governments, or
--the pledge of a special tax such as a sales tax or a property tax.
Airport income is largely affected by:
o increased competition;
o excess capacity; and
o increased fuel costs.
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.
o As a result California experienced a period of sustained budget imbalance.
22
<PAGE>
o Since that time the California economy has improved and the extreme
budgetary pressures have begun to lessen.
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:
o 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.
o 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.
o 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:
o Certain provisions of California's Constitution, laws and regulatory system
contain tax, spending and appropriations limits and prohibit certain new
taxes.
o Certain other California laws subject the users of bond proceeds to strict
rules and limits regarding revenue repayment.
o 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.
FLORIDA RISKS
Generally
Florida's financial condition is affected by numerous national, economic, social
and environmental policies and conditions. For example:
o south Florida is heavily involved with foreign tourism, trade and
investment capital. As a result, the region is susceptible to international
trade and currency imbalances and economic problems in Central and South
America;
o central and northern Florida are more vulnerable to agricultural problems,
such as crop failures or severe weather conditions, especially in the
citrus and sugar industries; and
o the state as a whole is also very dependent on tourism and construction.
State and Local Government
The state of Florida and its local governments are restricted in their ability
to raise taxes and incur debts. These restrictions limit their ability to
generate revenue, and so could hurt their ability to pay debts.
General obligations of the state are rated Aa2 by Moody's, AA+ by Standard &
Poor's and AA by Fitch.
MARYLAND RISKS
Generally
The Maryland economy is affected by various economic, social and environmental
conditions, some of which are unique to the
23
<PAGE>
state and others which affect the nation as a whole and the Mid-Atlantic region
in particular. For example:
o many residents of the state work for the Federal government in and around
Washington, D.C. Cutbacks in federal spending hurt Maryland more than
other states;
o like those in other states, Maryland businesses are sensitive to changes in
Federal regulation, which can affect their revenues and, therefore, state
tax revenue;
o Maryland has lost many defense and construction jobs in recent years, as
its economy has shifted away from manufacturing and industry and towards
services;
o the state's tax base has eroded as the population has dropped in cities
such as Baltimore.
The state and its local governments are limited in their ability to increase or
impose new taxes or incur indebtedness, which could hurt their ability to meet
debt obligations.
The state's general obligations are rated Aaa by Moody's and AAA 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:
o the high combined state and local tax burden;
o a decline in manufacturing jobs, leading to above-average unemployment;
o sensitivity to the financial services industry; and
o 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:
o aging public facilities that need repair or replacement;
o welfare and medical costs;
o expiring labor contracts; and
o 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.
OHIO RISKS
Generally
Overall, Ohio's economy is more cyclical than non-industrial states and the
nation as a whole:
o manufacturing (including auto-related manufacturing) is an important part
of Ohio's economy.
24
<PAGE>
o agriculture and related industries are also very important.
o recent employment growth has been in non-manufacturing areas.
State Government
The Ohio general revenue fund for the current two-year period calls for
expenditures of over $36 billion:
o because general fund receipts and payments do not match exactly, temporary
cash-flow deficiencies occur throughout the year. Ohio law permits the
state government to manage this problem by permitting the adjustment of
payment schedules and the use of the total operating fund.
o Ohio's general obligation bonds are currently rated Aa1 by Moody's; AA+ by
Standard & Poor's (except for the State's highway bonds which Standard &
Poor's rates AAA). Fitch rates Ohio's general obligation bonds and its
highway bonds AA+. Other bonds issued by other State agencies may have
lower ratings. Any of these ratings may be changed.
o Ohio voters have authorized the State to incur debt to which taxes or
excises are pledged for payment.
Education Financing
In 1997, the Ohio Supreme Court found major aspects of the State's school
funding system to be unconstitutional. The Court ruled that, although property
taxes can play a role in school financing, they can no longer be the primary
means of school financing. The Court stayed its ruling to allow the State to
devise a system that complied with the State's constitution. During that stay,
repayment provisions of certain bonds issued for school funding will remain
valid.
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
Some 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:
o limiting real property taxes,
o reducing tax rates,
o imposing a flat or other form of tax, or
o 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:
o adding the value of the bonds, net accrued interest, cash and any other
Fund assets;
25
<PAGE>
o subtracting accrued but unpaid Fund expenses, unreimbursed Trustee
advances, cash held to buy back units or for distribution to investors and
any other Fund liabilities; and
o dividing the result by the number of outstanding units.
Your net asset value when you sell may be more or less than your cost because of
sales fees, market movements and changes in the portfolio.
SPONSORS' SECONDARY MARKET
While we are not obligated to do so, we will buy back units at net asset value
without any other fee or charge. 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:
o if the New York Stock Exchange is closed (other than customary weekend and
holiday closings);
o if the SEC determines that trading on the New York Stock Exchange is
restricted or that an emergency exists making sale or evaluation of the
bonds not reasonably practicable; and
o for any other period permitted by SEC order.
EXCHANGE OPTION
You may exchange units of certain Defined Asset Funds for units of this Fund at
a maximum exchange fee of 1.90%. You may exchange units of this Fund for units
of certain
26
<PAGE>
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 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:
o cost of initial preparation of legal documents;
o federal and state registration fees;
o initial fees and expenses of the Trustee;
o initial audit; and
o 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:
o to reimburse the Trustee for the Fund's operating expenses;
o for extraordinary services and costs of indemnifying the Trustee and the
Sponsors;
o costs of actions taken to protect the Fund and other legal fees and
expenses;
o expenses for keeping the Fund's registration statement current; and
27
<PAGE>
o Fund termination expenses and any governmental charges.
The Sponsors are currently reimbursed up to 45 cents per $1,000 face amount
annually for providing portfolio supervisory, bookkeeping and administrative
services and for any other expenses properly chargeable to the Fund. Legal,
typesetting, electronic filing and regulatory filing fees and expenses
associated with updating the Portfolio's registration statement yearly are also
now chargeable to the Portfolio. While this fee may exceed the amount of these
costs and expenses attributable to this Fund, the total of these fees 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 will affect the size
and composition of the portfolio. Units offered in the secondary market may not
represent the same face amount of bonds that they did originally.
We decide whether or not to offer units for sale that we acquire in the
secondary market after reviewing:
o diversity of the portfolio;
o size of the Fund relative to its original size;
o ratio of Fund expenses to income;
o current and long-term returns;
o degree to which units may be selling at a premium over par; and
o cost of maintaining a current prospectus.
FUND TERMINATION
The Fund will terminate following the stated maturity or sale of the last bond
in the portfolio. The Fund may also terminate earlier with the consent of
investors holding 51% of the units or if total assets of the Fund have fallen
below 40% of the face amount of bonds deposited. We will decide whether to
terminate the Fund early based on the same factors used in deciding whether or
not to offer units in the secondary market.
When the Fund is about to terminate you will receive a notice, and you will be
unable to sell your units after that time. On or shortly before termination, we
will sell any remaining bonds, and you will receive your final distribution. Any
bond that cannot be sold at a reasonable
28
<PAGE>
price may continue to be held by the Trustee in a liquidating trust pending its
final sale.
You will pay your share of the expenses associated with termination, including
brokerage costs in selling bonds. This may reduce the amount you receive as your
final distribution.
CERTIFICATES
Certificates for units are issued on request. You may transfer certificates by
complying with the requirements for redeeming certificates, described above. You
can replace lost or mutilated certificates by delivering satisfactory indemnity
and paying the associated costs.
TRUST INDENTURE
The Fund is a 'unit investment trust' governed by a Trust Indenture, a contract
among the Sponsors, the Trustee and the Evaluator, which sets forth their duties
and obligations and your rights. A copy of the Indenture is available to you on
request to the Trustee. The following summarizes certain provisions of the
Indenture.
The Sponsors and the Trustee may amend the Indenture without your consent:
o to cure ambiguities;
o to correct or supplement any defective or inconsistent provision;
o to make any amendment required by any governmental agency; or
o to make other changes determined not to be materially adverse to your best
interest (as determined by the Sponsors).
Investors holding 51% of the units may amend the Indenture. Every investor must
consent to any amendment that changes the 51% requirement. No amendment may
reduce your interest in the Fund without your written consent.
The Trustee may resign by notifying the Sponsors. The Sponsors may remove the
Trustee without your consent if:
o it fails to perform its duties and the Sponsors determine that its
replacement is in your best interest; or
o it becomes incapable of acting or bankrupt or its affairs are taken over by
public authorities.
Investors holding 51% of the units may remove the Trustee. The Evaluator may
resign or be removed by the Sponsors and the Trustee without the consent of
investors. The resignation or removal of either becomes effective when a
successor accepts appointment. The Sponsors will try to appoint a successor
promptly; however, if no successor has accepted within 30 days after notice of
resignation, the resigning Trustee or Evaluator may petition a court to appoint
a successor.
Any Sponsor may resign as long as one Sponsor with a net worth of $2 million
remains and agrees to the resignation. The remaining Sponsors and the Trustee
may appoint a replacement. If there is only one Sponsor and it fails to perform
its duties or becomes bankrupt the Trustee may:
o remove it and appoint a replacement Sponsor;
o liquidate the Fund; or
o continue to act as Trustee without a Sponsor.
Merrill Lynch, Pierce, Fenner & Smith Incorporated acts as agent for the
Sponsors.
The Trust Indenture contains customary provisions limiting the liability of the
Trustee, the Sponsors and the Evaluator.
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<PAGE>
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 and the prices at which they resell or redeem them.
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<PAGE>
PUBLIC DISTRIBUTION
The Sponsors do not intend to qualify units for sale in any foreign countries.
This prospectus does not constitute an offer to sell units in any country where
units cannot lawfully be sold.
CODE OF ETHICS
Merrill Lynch, as agent for the Sponsors, has adopted a code of ethics requiring
preclearance and reporting of personal securities transactions by its employees
with access to information on portfolio transactions. The goal of the code is to
prevent fraud, deception or misconduct against the Fund and to provide
reasonable standards of conduct.
YEAR 2000 ISSUES
Many computer systems were designed in such a way that they may be unable to
distinguish between the year 2000 and the year 1900 (commonly known as the 'Year
2000 Problem'). We do not expect that the computer system changes necessary to
prepare for the Year 2000 will cause any major operational difficulties for the
Fund. The Year 2000 Problem may adversely affect the issuers of the securities
contained in the Portfolio, but we cannot predict whether any impact will be
material to the Portfolio as a whole.
TAXES
The following summary describes some of the important income tax consequences of
holding units. It assumes that you are not a dealer, financial institution,
insurance company or other investor with special circumstances. You should
consult your own tax adviser about your particular circumstances.
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 federal
alternative minimum tax. 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.
INCOME OR LOSS UPON DISPOSITION
When all or part of your share of a bond is disposed of (for example, when the
Fund sells, exchanges or redeems a bond or when you sell or exchange your
units), you will generally recognize capital gain or loss. Your gain, however,
will generally be ordinary income to the extent of any accrued 'market
discount'. Generally you will have market discount to the extent that your basis
in a bond when you
31
<PAGE>
purchase a unit is less than its stated redemption price at maturity (or, if it
is an original issue discount bond, the issue price increased by original issue
discount that has accrued on the bond before your purchase). You should consult
your tax adviser in this regard.
If your net long-term capital gains exceed your net short-term capital losses,
the excess may be subject to tax at a lower rate than ordinary income. Any
capital gain from the Fund will be long-term if you are considered to have held
your investment on each bond for more than one year and short-term if you held
it for one year or less. 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 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.
32
<PAGE>
FLORIDA TAXES
In the opinion of Greenberg, Traurig, P.A., Miami, Florida, special counsel on
Florida tax matters:
Under the income tax laws of the State of Florida, the Fund will not be taxed as
a corporation. Florida imposes an income tax on corporations but does not impose
a personal income tax. Accordingly, if you are an individual taxpayer your
income from the Fund will not be subject to tax in Florida. However, if you are
an entity that is normally taxed as a corporation, your income from the fund
will not be exempt from tax in Florida and special rules for taxation apply
depending on the type of entity. You should consult your tax adviser in this
regard.
Florida also imposes a tax on intangible personal property, such as stocks,
bonds, notes and units in trusts. The tax is imposed on Florida taxpayers as of
January 1st of each year. Florida exempts certain types of bonds and debt
obligations from this tax. Your units will be exempt from the intangible
personal property tax as long as the Fund invests exclusively in bonds and other
debt obligations that are tax-exempt for Florida purposes.
MARYLAND TAXES
In the opinion of Saul, Ewing, Remick & Saul LLP, Baltimore, Maryland, special
counsel on Maryland tax matters:
Under the income tax laws of the State of Maryland, the Fund will not be taxed
as a corporation and you will be considered to own directly your share of each
bond in the Fund. You will not be subject to Maryland tax on any income earned
by the Fund to the extent such income is attributable to bonds (other than
private activity bonds) issued by the State of Maryland, the Government of
Puerto Rico, or the Government of Guam or their respective political
subdivisions and authorities. When all or part of your share of a bond is
disposed of (for example, when the Fund sells, exchanges or redeems a bond or
when you sell or exchange your units), you will generally recognize capital gain
or loss except to the extent the gain is derived from the disposition of a bond
issued by the State of Maryland or its political subdivisions. Neither the bonds
in the Fund nor units held by you will be subject to Maryland personal property
tax or Maryland sales and use tax. If you are a Maryland resident at the time of
your death, your units will be subject to Maryland inheritance and estate tax.
OHIO TAXES
In the opinion of Vorys, Sater, Seymour and Pease LLP, Columbus, Ohio, special
counsel on Ohio tax matters:
Under the laws of the State of Ohio, the Ohio Trust will not be subject to the
Ohio corporation franchise tax or the Ohio tax on dealers in intangibles. If you
are an Ohio taxpayer, your interest income from the Ohio Trust will be exempt
from Ohio personal income taxes and Ohio corporation franchise taxes to the
extent it relates to bonds held by the Ohio Trust that are exempt from taxation
under Ohio law. However, any gains and losses which must be recognized for
federal income tax purposes (whether upon the sale of your units in the Ohio
Trust or upon the sale of bonds by the Ohio Trust) also must be recognized for
Ohio personal income and
33
<PAGE>
corporation franchise tax purposes, except to the extent the gains and losses
are attributable to the sale of bonds by the Ohio Trust that are exempt from
such taxation under Ohio law. Your interest income and your gains and losses
generally are not subject to municipal income taxation in Ohio. You should
consult your tax adviser concerning the application of Ohio taxes to you in
connection with your investment in the Ohio 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.
34
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 203 (CALIFORNIA, FLORIDA, MARYLAND, NEW YORK AND
OHIO TRUSTS) DEFINED ASSET FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsors, Trustee and Holders
of Municipal Investment Trust Fund,
Multistate Series - 203 (California, Florida, Maryland, New York
and Ohio Trusts) Defined Asset Funds:
We have audited the accompanying statements of condition of Municipal
Investment Trust Fund, Multistate Series - 203 (California, Florida,
Maryland, New York and Ohio Trusts) Defined Asset Funds, including the
portfolios, as of February 28, 1999 and the related statements of
operations and of changes in net assets for the years ended February
28, 1999 and 1998 and the period March 29, 1996 to February 28, 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 February 28, 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 - 203 (California, Florida,
Maryland, New York and Ohio Trusts) Defined Asset Funds at February
28, 1999 and the results of their operations and changes in their net
assets for the above-stated periods in conformity with generally
accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, N.Y.
May 4, 1999
D - 1
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 203 (CALIFORNIA TRUST),
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
AS OF FEBRUARY 28, 1999
<TABLE>
<S> <C> <C>
TRUST PROPERTY:
Investment in marketable securities - at value
(cost $3,212,541)(Note 1)...................... $3,485,776
Accrued interest receivable...................... 36,888
Cash............................................. 7,552
Deferred organization costs...................... 1,412
_____________
Total trust property................. 3,531,628
LESS LIABILITY - Accrued expenses.................. 1,439
_____________
NET ASSETS, REPRESENTED BY:
3,390 units of fractional undivided
interest outstanding (Note 3).................. $3,517,457
Undistributed net investment income.............. 12,732
_____________
$3,530,189
=============
UNIT VALUE ($3,530,189/3,390 units)................ $1,041.35
=============
</TABLE>
See Notes to Financial Statements.
D - 2
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 203 (CALIFORNIA TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
March 29,
1996
to
Years Ended February 28, February 28,
1999 1998 1997
_________________________________________
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income........................... $186,156 $193,289 $179,023
Trustee's fees and expenses............... (4,122) (6,685) (4,496)
Sponsors' fees............................ (1,546) (1,637) (1,398)
Organizational expenses................... (707) (707) (707)
_________________________________________
Net investment income..................... 179,781 184,260 172,422
_________________________________________
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Realized gain on securities
sold or redeemed........................ 2,918 4,923
Unrealized appreciation of investments.... 33,635 224,075 15,525
_________________________________________
Net realized and unrealized gain on
investments............................. 36,553 228,998 15,525
_________________________________________
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS........................... $216,334 $413,258 $187,947
=========================================
</TABLE>
See Notes to Financial Statements.
D - 3
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 203 (CALIFORNIA TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
March 29,
1996
to
Years Ended February 28, February 28,
1999 1998 1997
_________________________________________
<S> <C> <C> <C>
OPERATIONS:
Net investment income....................... $ 179,781 $ 184,260 $ 172,422
Realized gain on securities
sold or redeemed.......................... 2,918 4,923
Unrealized appreciation of investments...... 33,635 224,075 15,525
_________________________________________
Net increase in net assets resulting
from operations........................... 216,334 413,258 187,947
_________________________________________
DISTRIBUTIONS TO HOLDERS (Note 2):
Income...................................... (179,071) (184,585) (159,832)
Principal................................... (8,577)
_________________________________________
Total distributions......................... (187,648) (184,585) (159,832)
_________________________________________
CAPITAL SHARE TRANSACTIONS - Redemptions of
59 and 84 units, respectively............... (60,653) (86,817)
_________________________________________
NET INCREASE (DECREASE) IN NET ASSETS......... (31,967) 141,856 28,115
NET ASSETS AT BEGINNING OF PERIOD............. 3,562,156 3,420,300 3,392,185
_________________________________________
NET ASSETS AT END OF PERIOD................... $3,530,189 $3,562,156 $3,420,300
=========================================
PER UNIT:
Income distributions during period.......... $52.52 $52.31 $45.24
=========================================
Principal distributions during period....... $2.53
=========================================
Net asset value at end of period............ $1,041.35 $1,032.81 $968.10
=========================================
TRUST UNITS OUTSTANDING AT END OF PERIOD...... 3,390 3,449 3,533
=========================================
</TABLE>
See Notes to Financial Statements.
D - 4
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 203 (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, except that
value on March 29, 1996, was based upon offer side evaluations
at March 27, 1996 the day prior to the Date of Deposit. Cost
of securities at March 29, 1996 was also based on such offer
side evaluations.
(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
<TABLE>
<S> <C>
Cost of 3,390 units at Date of Deposit.............. $3,406,756
Less sales charge................................... 151,872
______________
Net amount applicable to Holders.................... 3,254,884
Redemptions of units - net cost of 143 units
redeemed less redemption amounts.................. (9,926)
Realized gain on securities sold or redeemed........ 7,841
Principal distributions............................. (8,577)
Unrealized appreciation of investments.............. 273,235
______________
Net capital applicable to Holders................... $3,517,457
==============
</TABLE>
4. INCOME TAXES
As of February 28, 1999, unrealized appreciation of investments, based
on cost for Federal income tax purposes, aggregated $273,235, all of
which related to appreciated securities. The cost of investment
securities for Federal income tax purposes was $3,212,541 at
February 28, 1999.
D - 5
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 203
DEFINED ASSET FUNDS
PORTFOLIO OF THE CALIFORNIA TRUST (INSURED)
AS OF FEBRUARY 28, 1999
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities(4) Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost(2) Value(2)
_____________ _________ ______ ______ _____________ _____________ _______ ________
<S> <C> <C> <C> <C> <C> <C> <C>
1 Antioch Area Pub. Fac. Fin. Agy., AAA $ 500,000 5.300% 2020 08/01/05 $ 467,570 $ 512,965
CA, Cmnty. Fac. Dist. No. 1989-1, @ 102.000
Spec. Tax Bonds. Ser. 1995
(Financial Guaranty Ins.)
2 Cerritos, CA, Pub. Fin. Auth., AAA 500,000 5.750 2022 11/01/03 496,600 528,300
Rev. Bonds (Los Coyotes Redev. @ 102.000
Proj. Loan), Ser. 1993 A (AMBAC
Ins.)
3 Lancaster, Redv. Agy. ,CA, AAA 500,000 5.800 2023 08/01/03 496,560 533,620
Combined Redevelopment Project @ 102.000
Areas (Housing Program), Tax
Allocation Bonds, Issue of 1993
(MBIA Ins.)
4 City of Loma Linda, CA, Hospital AAA 500,000 5.375 2022 12/01/03 468,075 509,460
Revenue Refunding Bonds (Loma Linda @ 102.000
University Ity Medical Center
Project), Ser. 1993 C (MBIA Ins.)
5 Department of Water & Power of the AAA 470,000 5.250 2026 11/15/03 429,998 476,063
City of Los Angeles, CA, Electrical @ 102.000
Plant Refunding Revenue Bonds,
Second Issue of 1993 (Financial
Guaranty Ins.)
6 Oakland, CA, Jt. Pwr. Auth., Lease AAA 380,000 5.750 2021 08/01/06 377,458 408,603
Rev. Bonds (Oakland Admin. Bldg.), @ 102.000
Ser. 1996 (AMBAC Ins.)
7 City of Stockton, CA, Ins. Htlh. AAA 500,000 5.500 2023 12/01/03 476,280 516,765
Fac. Rev. Bonds (St. Joseph's Med. @ 102.000
Ctr. of Stockton), Ser. 1993 A
(MBIA Ins.)
______________ ______________ ____________
TOTAL $3,350,000 $3,212,541 $3,485,776
============== ============== ============
</TABLE>
See Notes to Portfolios on Pages D - 27 and D - 28.
D - 6
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 203 (FLORIDA TRUST),
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
AS OF FEBRUARY 28, 1999
<TABLE>
<S> <C> <C>
TRUST PROPERTY:
Investment in marketable securities - at value
(cost $2,564,505)(Note 1)...................... $2,785,102
Accrued interest receivable...................... 37,437
Cash............................................. 1,905
Deferred organization costs...................... 1,313
_____________
Total trust property................. 2,825,757
LESS LIABILITY - Accrued expenses.................. 1,400
_____________
NET ASSETS, REPRESENTED BY:
2,730 units of fractional undivided
interest outstanding (Note 3).................. $2,814,164
Undistributed net investment income.............. 10,193
_____________
$2,824,357
=============
UNIT VALUE ($2,824,357/2,730 units)................ $1,034.56
=============
</TABLE>
See Notes to Financial Statements.
D - 7
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 203 (FLORIDA TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
March 29,
1996
to
Years Ended February 28, February 28,
1999 1998 1997
_________________________________________
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income........................... $148,847 $167,430 $163,718
Trustee's fees and expenses............... (3,725) (6,469) (4,205)
Sponsors' fees............................ (1,254) (1,502) (1,298)
Organizational expenses................... (656) (656) (656)
_________________________________________
Net investment income..................... 143,212 158,803 157,559
_________________________________________
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Realized gain on securities
sold or redeemed........................ 8,734 9,275
Unrealized appreciation of investments.... 31,049 171,965 17,583
_________________________________________
Net realized and unrealized gain on
investments............................. 39,783 181,240 17,583
_________________________________________
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS........................... $182,995 $340,043 $175,142
=========================================
</TABLE>
See Notes to Financial Statements.
D - 8
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 203 (FLORIDA TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
March 29,
1996
to
Years Ended February 28, February 28,
1999 1998 1997
_________________________________________
<S> <C> <C> <C>
OPERATIONS:
Net investment income....................... $ 143,212 $ 158,803 $ 157,559
Realized gain on securities
sold or redeemed.......................... 8,734 9,275
Unrealized appreciation of investments...... 31,049 171,965 17,583
_________________________________________
Net increase in net assets resulting
from operations........................... 182,995 340,043 175,142
_________________________________________
DISTRIBUTIONS TO HOLDERS (Note 2):
Income...................................... (142,456) (159,739) (146,038)
Principal................................... (9,508) (11,794)
_________________________________________
Total distributions......................... (151,964) (171,533) (146,038)
_________________________________________
CAPITAL SHARE TRANSACTIONS - Redemptions of
175 and 376 units, respectively............. (179,042) (374,616)
_________________________________________
NET INCREASE (DECREASE) IN NET ASSETS......... (148,011) (206,106) 29,104
NET ASSETS AT BEGINNING OF PERIOD............. 2,972,368 3,178,474 3,149,370
_________________________________________
NET ASSETS AT END OF PERIOD................... $2,824,357 $2,972,368 $3,178,474
=========================================
PER UNIT:
Income distributions during period.......... $51.15 $51.30 $44.51
=========================================
Principal distributions during period....... $3.43 $4.06
=========================================
Net asset value at end of period............ $1,034.56 $1,023.19 $968.75
=========================================
TRUST UNITS OUTSTANDING AT END OF PERIOD...... 2,730 2,905 3,281
=========================================
</TABLE>
See Notes to Financial Statements.
D - 9
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 203 (FLORIDA 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, except that
value on March 29, 1996, was based upon offer side evaluations
at March 27, 1996, the day prior to the Date of Deposit. Cost
of securities at March 29, 1996 was also based on such offer
side evaluations.
(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
<TABLE>
<S> <C>
Cost of 2,730 units at Date of Deposit.............. $2,742,753
Less sales charge................................... 122,277
______________
Net amount applicable to Holders.................... 2,620,476
Redemptions of units - net cost of 551 units
redeemed less redemption amounts.................. (23,616)
Realized gain on securities sold or redeemed........ 18,009
Principal distributions............................. (21,302)
Unrealized appreciation of investments.............. 220,597
______________
Net capital applicable to Holders................... $2,814,164
==============
</TABLE>
4. INCOME TAXES
As of February 28, 1999, unrealized appreciation of investments, based
on cost for Federal income tax purposes, aggregated $220,597, all of
which related to appreciated securities. The cost of investment
securities for Federal income tax purposes was $2,564,505 at
February 28, 1999.
D - 10
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 203
DEFINED ASSET FUNDS
PORTFOLIO OF THE FLORIDA TRUST (INSURED)
AS OF FEBRUARY 28, 1999
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities(4) Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost(2) Value(2)
_____________ _________ ______ ______ _____________ _____________ _______ ________
<S> <C> <C> <C> <C> <C> <C> <C>
1 Dade Cnty., FL, Professional AAA $ 500,000 5.250% 2030 None $ 462,660 $ 521,765
Sports Fran. Fac. Tax Rev. Bonds,
Ser. 1995 (MBIA Ins.)
2 State of Floida, Full Faith and AAA 400,000 5.600 2025 06/01/05 391,524 418,900
Credit, State Bd. of Educ., Pub. @ 101.000
Educ. Cap. Outlay Bonds, Ser. 1994
C (MBIA Ins.)
3 State of Florida, Department of AAA 455,000 5.500 2021 07/01/05 439,894 472,213
Transportation, Turnpike Revenue @ 101.000
Bonds, Ser. 1995 A (Financial
Guaranty Ins.)
4 Orange Cnty., FL, Sales Tax Rev. AAA 500,000 5.375 2024 01/01/03 470,805 510,640
Bonds, Ser. 1993 B (MBIA Ins.) @ 102.000
5 Orange Cnty., FL, Tourist Dev. Tax AAA 190,000 5.750 2019 10/01/04 190,000 202,637
Rev. Bonds, Ser. 1994 B (MBIA Ins.) @ 102.000
6 State of Florida, Orlando-Orange AAA 500,000 5.250 2019 07/01/03 468,105 505,880
Cnty. Expwy. Auth., Jr. Lien Rev. @ 102.000
Rfdg. Bonds, Ser. 1993 A (Financial
Guaranty Ins.)
7 Sarasota Cnty., FL, Solid Waste AAA 145,000 5.500 2016 10/01/06 141,517 153,067
Sys. Rev. Bonds, Ser. 1996 (AMBAC @ 102.000
Ins.)
______________ ______________ _____________
TOTAL $2,690,000 $2,564,505 $2,785,102
============== ============== =============
</TABLE>
See Notes to Portfolios on Pages D - 27 and D - 28.
D - 11
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 203 (MARYLAND TRUST),
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
AS OF FEBRUARY 28, 1999
<TABLE>
<S> <C> <C>
TRUST PROPERTY:
Investment in marketable securities - at value
(cost $2,990,873)(Note 1)...................... $3,203,718
Accrued interest receivable...................... 48,666
Deferred organization costs...................... 1,313
_____________
Total trust property................. 3,253,697
LESS LIABILITIES:
Advance from Trustee............................. $ 6,590
Accrued expenses................................. 1,430 8,020
_____________ _____________
NET ASSETS, REPRESENTED BY:
3,162 units of fractional undivided
interest outstanding (Note 3).................. 3,233,595
Undistributed net investment income.............. 12,082
_____________
$3,245,677
=============
UNIT VALUE ($3,245,677/3,162 units)................ $1,026.46
=============
</TABLE>
See Notes to Financial Statements.
D - 12
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 203 (MARYLAND TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
March 29,
1996
to
Years Ended February 28, February 28,
1999 1998 1997
_________________________________________
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income........................... $174,140 $180,840 $167,740
Trustee's fees and expenses............... (3,974) (6,469) (4,499)
Sponsors' fees............................ (1,446) (1,520) (1,298)
Organizational expenses................... (656) (656) (656)
_________________________________________
Net investment income..................... 168,064 172,195 161,287
_________________________________________
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Realized gain on securities
sold or redeemed........................ 5,808
Unrealized appreciation of investments.... 18,443 166,224 28,178
_________________________________________
Net realized and unrealized gain on
investments............................. 18,443 172,032 28,178
_________________________________________
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS........................... $186,507 $344,227 $189,465
=========================================
</TABLE>
See Notes to Financial Statements.
D - 13
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 203 (MARYLAND TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
March 29,
1996
to
Years Ended February 28, February 28,
1999 1998 1997
_________________________________________
<S> <C> <C> <C>
OPERATIONS:
Net investment income....................... $ 168,064 $ 172,195 $ 161,287
Realized gain on securities
sold or redeemed.......................... 5,808
Unrealized appreciation of investments...... 18,443 166,224 28,178
_________________________________________
Net increase in net assets resulting
from operations........................... 186,507 344,227 189,465
_________________________________________
DISTRIBUTIONS TO HOLDERS (Note 2):
Income...................................... (167,176) (172,386) (149,451)
Principal................................... (6,830)
_________________________________________
Total distributions......................... (174,006) (172,386) (149,451)
_________________________________________
CAPITAL SHARE TRANSACTIONS - Redemptions of
119 units, ................................. (122,353)
_________________________________________
NET INCREASE IN NET ASSETS.................... 12,501 49,488 40,014
NET ASSETS AT BEGINNING OF PERIOD............. 3,233,176 3,183,688 3,143,674
_________________________________________
NET ASSETS AT END OF PERIOD................... $3,245,677 $3,233,176 $3,183,688
=========================================
PER UNIT:
Income distributions during period.......... $52.87 $52.70 $45.55
=========================================
Principal distributions during period....... $2.16
=========================================
Net asset value at end of period............ $1,026.46 $1,022.51 $970.34
=========================================
TRUST UNITS OUTSTANDING AT END OF PERIOD...... 3,162 3,162 3,281
=========================================
</TABLE>
See Notes to Financial Statements.
D - 14
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 203 (MARYLAND 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, except that
value on March 29, 1996 was based upon offer side evaluations
at March 27, 1996, the day prior to the Date of Deposit. Cost
of securities at March 29, 1996 was also based on such offer
side evaluations.
(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
<TABLE>
<S> <C>
Cost of 3,162 units at Date of Deposit.............. $3,170,996
Less sales charge................................... 141,342
______________
Net amount applicable to Holders.................... 3,029,654
Redemptions of units - net cost of 119 units
redeemed less redemption amounts.................. (7,882)
Realized gain on securities sold or redeemed........ 5,808
Principal distributions............................. (6,830)
Unrealized appreciation of investments.............. 212,845
______________
Net capital applicable to Holders................... $3,233,595
==============
</TABLE>
4. INCOME TAXES
As of February 28, 1999, unrealized appreciation of investments, based
on cost for Federal income tax purposes, aggregated $212,845, all of
which related to appreciated securities. The cost of investment
securities for Federal income tax purposes was $2,990,873 at
February 28, 1999.
D - 15
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 203
DEFINED ASSET FUNDS
PORTFOLIO OF THE MARYLAND TRUST
AS OF FEBRUARY 28, 1999
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost(2) Value(2)
__________ _________ ______ ______ _____________ _____________ _______ ________
<S> <C> <C> <C> <C> <C> <C> <C>
1 Maryland Health and Higher A $ 400,000 5.000% 2023 07/01/03 $ 353,912 $ 384,724
Education Facility Authority, @ 102.000
Project and Refunding Revenue
Bonds, Peninsula Regional Medical
Center Issue, Ser. 1993
2 Maryland Health and Higher A+ 500,000 5.125 2021 07/01/03 452,425 489,225
Education Facility Authority, @ 102.000
Refunding Revenue Bonds, Suburban
Hosp. Issue, Ser. 1993
3 Anne Arundel County, Maryland, A 380,000 6.000 2024 04/01/04 385,704 409,397
Pollution Control Revenue Refunding @ 102.000
Bonds (Baltimore Gas and Electric
Co. Project) Ser. 1994
4 Prince George's Cnty., MD, Proj. A(m) 500,000 5.300 2024 07/01/04 455,745 483,720
and Rfdg. Rev. Bonds (Dimensions @ 102.000
Hlth. Corp. Iss.), Ser. 1994
5 City of Baltimore, MD (Mayor and AAA 500,000 6.000 2017(6) 09/01/04 511,580 553,990
City Council of Baltimore), Conv. @ 100.000
Ctr. Rev. Bonds, Ser. 1994
(Financial Guaranty Ins.) (5)
6 Community Dev. Admin.,Department of Aa(m) 510,000 6.050 2024 05/15/03 515,100 534,669
Housing and Community Development, @ 102.000
Maryland, Mutli-Family Housing
Revenue Bonds (Ins. Mortgage
Loans), Ser. 1993 D
7 Commonwealth of Puerto Rico, G.O. A 340,000 5.400 2025 07/01/06 316,407 347,993
Bonds, Pub. Imp. Bonds of 1996 @ 101.500
______________ ______________ ______________
TOTAL $3,130,000 $2,990,873 $3,203,718
============== ============== ==============
</TABLE>
See Notes to Portfolio on pages D - 27 and D - 28.
D - 16
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 203 (NEW YORK TRUST),
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
AS OF FEBRUARY 28, 1999
<TABLE>
<S> <C> <C>
TRUST PROPERTY:
Investment in marketable securities - at value
(cost $2,815,924)(Note 1)...................... $3,117,801
Accrued interest receivable...................... 44,857
Deferred organization costs...................... 1,413
_____________
Total trust property................. 3,164,071
LESS LIABILITIES:
Advance from Trustee............................. $ 4,416
Accrued expenses................................. 1,426 5,842
_____________ _____________
NET ASSETS, REPRESENTED BY:
3,034 units of fractional undivided
interest outstanding (Note 3).................. 3,147,020
Undistributed net investment income.............. 11,209
_____________
$3,158,229
=============
UNIT VALUE ($3,158,229/3,034 units)................ $1,040.95
=============
</TABLE>
See Notes to Financial Statements.
D - 17
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 203 (NEW YORK TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
March 29,
1996
to
Years Ended February 28, February 28,
1999 1998 1997
_________________________________________
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income........................... $175,662 $188,312 $182,397
Trustee's fees and expenses............... (4,000) (6,721) (4,358)
Sponsors' fees............................ (1,406) (1,622) (1,398)
Organizational expenses................... (707) (707) (707)
_________________________________________
Net investment income..................... 169,549 179,262 175,934
_________________________________________
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain on securities
sold or redeemed........................ 18,980 7,062
Unrealized appreciation of investments.... 19,901 220,984 60,992
_________________________________________
Net realized and unrealized gain on
investments............................. 38,881 228,046 60,992
_________________________________________
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS........................... $208,430 $407,308 $236,926
=========================================
</TABLE>
See Notes to Financial Statements.
D - 18
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 203 (NEW YORK TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
March 29,
1996
to
Years Ended February 28, February 28,
1999 1998 1997
_________________________________________
<S> <C> <C> <C>
OPERATIONS:
Net investment income....................... $ 169,549 $ 179,262 $ 175,934
Realized gain on securities
sold or redeemed.......................... 18,980 7,062
Unrealized appreciation of investments...... 19,901 220,984 60,992
_________________________________________
Net increase in net assets resulting
from operations........................... 208,430 407,308 236,926
_________________________________________
DISTRIBUTIONS TO HOLDERS (Note 2):
Income...................................... (168,832) (179,909) (163,553)
Principal................................... (11,893) (12,159)
_________________________________________
Total distributions......................... (180,725) (192,068) (163,553)
_________________________________________
CAPITAL SHARE TRANSACTIONS - Redemptions of
206 and 294 units, respectively............. (215,106) (290,079)
_________________________________________
NET INCREASE (DECREASE) IN NET ASSETS......... (187,401) (74,839) 73,373
NET ASSETS AT BEGINNING OF PERIOD............. 3,345,630 3,420,469 3,347,096
_________________________________________
NET ASSETS AT END OF PERIOD................... $3,158,229 $3,345,630 $3,420,469
=========================================
PER UNIT:
Income distributions during period.......... $53.31 $53.27 $46.28
=========================================
Principal distributions during period....... $3.92 $3.69
=========================================
Net asset value at end of period............ $1,040.95 $1,032.60 $967.87
=========================================
TRUST UNITS OUTSTANDING AT END OF PERIOD...... 3,034 3,240 3,534
=========================================
</TABLE>
See Notes to Financial Statements.
D - 19
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 203 (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, except that
value on March 29, 1996 was based upon offer side evaluations
at March 27, 1996 the day prior to the Date of Deposit. Cost
of securities at March 29, 1996 was also based on such offer
side evaluations.
(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
<TABLE>
<S> <C>
Cost of 3,034 units at Date of Deposit.............. $3,007,582
Less sales charge................................... 134,042
______________
Net amount applicable to Holders.................... 2,873,540
Redemptions of units - net cost of 500 units
redeemed less redemption amounts.................. (30,387)
Realized gain on securities sold or redeemed........ 26,042
Principal distributions............................. (24,052)
Unrealized appreciation of investments.............. 301,877
______________
Net capital applicable to Holders................... $3,147,020
==============
</TABLE>
4. INCOME TAXES
As of February 28, 1999, unrealized appreciation of investments, based
on cost for Federal income tax purposes, aggregated $301,877, all of
which related to appreciated securities. The cost of investment
securities for Federal income tax purposes was $2,815,924 at
February 28, 1999.
D - 20
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 203
DEFINED ASSET FUNDS
PORTFOLIO OF THE NEW YORK TRUST
AS OF FEBRUARY 28, 1999
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost(2) Value(2)
__________ _________ ______ ______ _____________ _____________ _______ ________
<S> <C> <C> <C> <C> <C> <C> <C>
1 Dormitory Auth. of the State of New AAA $ 345,000 6.250% 2017(6) 05/15/03 $ 346,870 $ 385,110
York, State Univ. Educl. Facs., @ 102.000
Rev. Bonds, Ser. 1992 A
2 Dormitory Auth. of the State of New A(f) 500,000 5.700 2021 07/01/04 473,115 523,770
York, Rev. Bonds, Upstate Cmnty. @ 102.000
Colleges, Rev. Bonds, Ser. 1994 A
3 New York State Mtge. Agy., Aa2(m) 200,000 6.000 2017 04/01/04 200,500 210,838
Homeowner Mtge. Rev. Bonds. Ser. 39 @ 102.000
4 New York State Urban Dev. Corp., A(f) 500,000 5.250 2021 01/01/04 444,845 500,535
Corr. Cap. Facs. Rev., Bonds, 1993 @ 102.000
A Rfdg. Ser.
5 New York Local Govt. Asst. Corp. (A A+ 500,000 5.500 2018 04/01/03 472,580 518,285
Pub. Benefit Corp. of the State of @ 102.000
NY), Ser. 1993 C Rfdg. Bonds
6 Battery Park City Auth., NY, Sr. AA 450,000 5.700 2020 11/01/03 429,944 477,873
Rev. Rfdg. Bonds, Ser. 1993 A @ 102.000
7 Grand Central Dist. Management A1(m) 500,000 5.250 2022 01/01/04 448,070 501,390
Association Inc., New York, Grand @ 102.000
Central Business Improvement
District, Cap. Imp. Refunding
Bonds, Ser. 1994
______________ ______________ _____________
TOTAL $2,995,000 $2,815,924 $3,117,801
============== ============== =============
</TABLE>
See Notes to Portfolios on Pages D - 27 and D - 28.
D - 21
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 203 (OHIO TRUST),
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
AS OF FEBRUARY 28, 1999
<TABLE>
<S> <C> <C>
TRUST PROPERTY:
Investment in marketable securities - at value
(cost $3,087,100)(Note 1)...................... $3,307,578
Accrued interest receivable...................... 43,958
Deferred organization costs...................... 1,312
_____________
Total trust property................. 3,352,848
LESS LIABILITIES:
Advance from Trustee............................. $ 2,381
Accrued expenses................................. 1,430 3,811
_____________ _____________
NET ASSETS, REPRESENTED BY:
3,237 units of fractional undivided
interest outstanding (Note 3).................. 3,337,205
Undistributed net investment income.............. 11,832
_____________
$3,349,037
=============
UNIT VALUE ($3,349,037/3,237 units)................ $1,034.61
=============
</TABLE>
See Notes to Financial Statements.
D - 22
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 203 (OHIO TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
March 29,
1996
to
Years Ended February 28, February 28,
1999 1998 1997
_________________________________________
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income........................... $175,265 $176,250 $162,950
Trustee's fees and expenses............... (4,044) (6,499) (4,334)
Sponsors' fees............................ (1,461) (1,520) (1,298)
Organizational expenses................... (656) (656) (656)
_________________________________________
Net investment income..................... 169,104 167,575 156,662
_________________________________________
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Realized gain on securities
sold or redeemed........................ 2,781
Unrealized appreciation of investments.... 36,688 171,523 12,267
_________________________________________
Net realized and unrealized gain on
investments............................. 39,469 171,523 12,267
_________________________________________
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS........................... $208,573 $339,098 $168,929
=========================================
</TABLE>
See Notes to Financial Statements.
D - 23
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 203 (OHIO TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
March 29,
1996
to
Years Ended February 28, February 28,
1999 1998 1997
_________________________________________
<S> <C> <C> <C>
OPERATIONS:
Net investment income....................... $ 169,104 $ 167,575 $ 156,662
Realized gain on securities
sold or redeemed.......................... 2,781
Unrealized appreciation of investments...... 36,688 171,523 12,267
_________________________________________
Net increase in net assets resulting
from operations........................... 208,573 339,098 168,929
_________________________________________
DISTRIBUTIONS TO HOLDERS (Note 2):
Income...................................... (168,376) (167,804) (145,304)
Principal................................... (3,043)
_________________________________________
Total distributions......................... (171,419) (167,804) (145,304)
_________________________________________
CAPITAL SHARE TRANSACTIONS - Redemptions of
43 units, .................................. (45,489)
_________________________________________
NET INCREASE (DECREASE) IN NET ASSETS......... (8,335) 171,294 23,625
NET ASSETS AT BEGINNING OF PERIOD............. 3,357,372 3,186,078 3,162,453
_________________________________________
NET ASSETS AT END OF PERIOD................... $3,349,037 $3,357,372 $3,186,078
=========================================
PER UNIT:
Income distributions during period.......... $51.56 $51.16 $44.30
=========================================
Principal distributions during period....... $0.94
=========================================
Net asset value at end of period............ $1,034.61 $1,023.59 $971.37
=========================================
TRUST UNITS OUTSTANDING AT END OF PERIOD...... 3,237 3,280 3,280
=========================================
</TABLE>
See Notes to Financial Statements.
D - 24
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 203 (OHIO 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, except that
value on March 29, 1996, was based upon offer side evaluations
at March 27, 1996 the day prior to the Date of Deposit. Cost
of securities at March 29, 1996 was also based on such offer
side evaluations.
(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
<TABLE>
<S> <C>
Cost of 3,237 units at Date of Deposit.............. $3,266,659
Less sales charge................................... 145,665
______________
Net amount applicable to Holders.................... 3,120,994
Redemptions of units - net cost of 43 units
redeemed less redemption amounts.................. (4,005)
Realized gain on securities sold or redeemed........ 2,781
Principal distributions............................. (3,043)
Unrealized appreciation of investments.............. 220,478
______________
Net capital applicable to Holders................... $3,337,205
==============
</TABLE>
4. INCOME TAXES
As of February 28, 1999, unrealized appreciation of investments, based
on cost for Federal income tax purposes, aggregated $220,478, all of
which related to appreciated securities. The cost of investment
securities for Federal income tax purposes was $3,087,100 at
February 28, 1999.
D - 25
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 203
DEFINED ASSET FUNDS
PORTFOLIO OF THE OHIO TRUST
AS OF FEBRUARY 28, 1999
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities(4) Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost(2) Value(2)
_____________ _________ ______ ______ _____________ _____________ _______ ________
<S> <C> <C> <C> <C> <C> <C> <C>
1 County of Lucas, OH, Hosp. Imp. AAA $ 500,000 5.000% 2022 11/15/03 $ 446,040 $ 489,090
Rfdg. Rev. Bonds (The Toledo @ 102.000
Hosp.), Ser. 1993 (MBIA Ins.)
2 Logan and Auglaize Cntys., OH, AAA 500,000 5.375 2023 12/01/06 480,825 513,490
Indian Lake Local Sch. Dist., Sch. @ 101.000
Facs. Construction and Imp. Bonds
(G.O.-Unltd. Tax) (Financial
Guaranty Ins.)
3 County of Warren, OH, Springboro AAA 500,000 5.100 2023 12/01/06 464,995 501,715
Cmnty. City School Dist., Sch. Mp. @ 101.000
Unlimited Tax, G.O. Rfdg. Bonds,
Ser. 1996 (AMBAC Ins.)
4 Marysville Exempted School AAA 455,000 5.750 2023 12/01/05 458,567 485,476
District Ohio School Improvement @ 101.000
Bonds, General Obligation
(Unlimited Taxes) (MBIA Ins.)
5 Olmsted Falls City Sch. Dist., OH, AAA 250,000 5.850 2017 12/15/04 253,953 267,382
Classroom Facs. Imp. Bonds, Ser. @ 102.000
1995, G.O. (Unltd. Tax), Ser. 1995
(Financial Guaranty Ins.)
6 South Euclid-Lyndhurst City Sch. AAA 500,000 5.250 2018 12/01/04 474,565 511,475
Dist., OH, School Imp. Bonds (G.O. @ 102.000
Unltd. Tax), Ser 1994 (Financial
Guaranty Ins.)
7 University of Cincinnati, OH, Gen. AAA 500,000 5.850 2016 06/01/06 508,155 538,950
Receipt Bonds, Ser. W (MBIA Ins.) @ 101.000
______________ ______________ _____________
TOTAL $3,205,000 $3,087,100 $3,307,578
============== ============== =============
</TABLE>
See Notes to Portfolios on Pages D - 27 and D - 28 .
D - 26
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 203 (CALIFORNIA, FLORIDA, MARYLAND, NEW YORK
AND OHIO TRUSTS)
DEFINED ASSET FUNDS
NOTES TO PORTFOLIOS
AS OF FEBRUARY 28, 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) Insured by the indicated municipal bond insurance company.
D - 27
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 203 (CALIFORNIA, FLORIDA, MARYLAND, NEW YORK
AND OHIO TRUSTS)
DEFINED ASSET FUNDS
NOTES TO PORTFOLIOS
AS OF FEBRUARY 28, 1999
(6) Bonds with aggregate face amounts of $500,000 and $345,000 for
the Maryland and New York Trusts, respectively, have been
pre-refunded and are expected to be called for redemption on the
optional redemption provision dates shown.
D - 28
D - 9
D - 17
D - 25
D - 33
<PAGE>
Defined
Asset FundsSM
HAVE QUESTIONS ? MUNICIPAL INVESTMENT TRUST FUND
Request the most MULTISTATE SERIES--203
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:
o Securities Act of 1933 (file no.
333-00867) and
o 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.
15306--5/99
<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. 4 to Exhibit 9.1 to the Registration Statement of
Municipal Investment Trust Fund, Insured Series--207, 1933 Act File
No. 33-54037).
R-1
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND
MULTISTATE SERIES--203
DEFINED ASSET FUNDS
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT,
MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES--203, 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 19TH DAY OF MAY,
1999.
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
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
HERBERT M. ALLISON, JR.
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
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
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
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
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
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
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
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 and
Reynolds Inc.: 333-13039
RICHARD M. DeMARTINI
ROBERT J. DWYER
CHRISTINE A. EDWARDS
JAMES F. HIGGINS
MITCHELL M. MERIN
STEPHEN R. MILLER
RICHARD F. POWERS III
PHILIP J. PURCELL
THOMAS C. SCHNEIDER
WILLIAM B. SMITH
By
MICHAEL D. BROWNE
(As authorized signatory for
Dean Witter Reynolds Inc.
and Attorney-in-fact for the persons listed above)
R-7
<PAGE>
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
May 19, 1999
Frank A. Ciccotto, Jr.
Vice President
Tax-Exempt Evaluations
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
RE: MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES--203, DEFINED ASSET FUNDS
Gentlemen:
We have examined the post-effective Amendment to the Registration Statement
File No. 33-00867 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
<PAGE>
Exhibit 5.1
CONSENT OF INDEPENDENT ACCOUNTANTS
The Sponsors and Trustee of
Municipal Investment Trust Fund--Multistate Series--203 (California, Florida,
Maryland, New York and Ohio Trusts), Defined Asset Funds:
We consent to the use in this Post-Effective Amendment No. 3 to Registration
Statement No. 333-00867 of our opinion dated May 4, 1999 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.
May 19, 1999
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<NUMBER> 2
<NAME> Maryland Trust
<MULTIPLIER>1
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<PERIOD-TYPE> YEAR
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<PERIOD-END> Feb-28-1999
<INVESTMENTS-AT-COST> 2,990,873
<INVESTMENTS-AT-VALUE> 3,203,718
<RECEIVABLES> 48,666
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 1,313
<TOTAL-ASSETS> 3,253,697
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 8,020
<TOTAL-LIABILITIES> 8,020
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3,020,750
<SHARES-COMMON-STOCK> 3,162
<SHARES-COMMON-PRIOR> 3,162
<ACCUMULATED-NII-CURRENT> 12,082
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<ACCUM-APPREC-OR-DEPREC> 212845
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<NET-INVESTMENT-INCOME> 168,064
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<NET-CHANGE-FROM-OPS> 186,507
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<NAME> New York Trust
<MULTIPLIER>1
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<PERIOD-END> Feb-28-1999
<INVESTMENTS-AT-COST> 2,815,924
<INVESTMENTS-AT-VALUE> 3,117,801
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</TABLE>
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<NAME> Ohio Trust
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