<PAGE>
DEFINED ASSET FUNDSSM
- --------------------------------------------
- ----------------------------------
MUNICIPAL INVESTMENT TRUST FUND
MULTISTATE SERIES--210
(A UNIT INVESTMENT TRUST)
O ARIZONA, CALIFORNIA, NEW YORK, OHIO, TEXAS AND
VIRGINIA PORTFOLIOS
O PORTFOLIOS OF INTERMEDIATE AND LONG-TERM
MUNICIPAL BONDS
O DESIGNED FOR INCOME FREE FROM REGULAR FEDERAL
INCOME TAX
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 October 8, 1999.
<PAGE>
- --------------------------------------------------------------------------------
Defined 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 JUNE 30, 1999, THE
EVALUATION DATE.
CONTENTS
PAGE
-----------
Arizona Portfolio--
Risk/Return Summary.................................. 3
California Intermediate Insured Portfolio--Risk/Return
Summary.............................................. 6
New York Portfolio--Risk/Return Summary................. 9
Ohio Insured Portfolio--
Risk/Return Summary.................................. 12
Texas Insured Portfolio--
Risk/Return Summary.................................. 15
Virginia Portfolio--
Risk/Return Summary.................................. 18
What You Can Expect From Your Investment................ 23
Monthly Income....................................... 23
Return Figures....................................... 23
Records and Reports.................................. 23
The Risks You Face...................................... 24
Interest Rate Risk................................... 24
Call Risk............................................ 24
Reduced Diversification Risk......................... 24
Liquidity Risk....................................... 24
Concentration Risk................................... 24
State Concentration Risk............................. 26
Bond Quality Risk.................................... 29
Insurance Related Risk............................... 29
Litigation and Legislation Risks..................... 29
Selling or Exchanging Units............................. 29
Sponsors' Secondary Market........................... 30
Selling Units to the Trustee......................... 30
Exchange Option...................................... 30
How The Fund Works...................................... 31
Pricing.............................................. 31
Evaluations.......................................... 31
Income............................................... 31
Expenses............................................. 31
Portfolio Changes.................................... 32
Fund Termination..................................... 32
Certificates......................................... 33
Trust Indenture...................................... 33
Legal Opinion........................................ 34
Auditors............................................. 34
Sponsors............................................. 34
Trustee.............................................. 34
Underwriters' and Sponsors' Profits.................. 34
Public Distribution.................................. 35
Code of Ethics....................................... 35
Year 2000 Issues..................................... 35
Taxes................................................... 35
Supplemental Information................................ 38
Financial Statements.................................... D-1
2
<PAGE>
- --------------------------------------------------------------------------------
ARIZONA 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
$2,845,000.
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 69% 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 30%
/ / Hospital/Health Care 35%
/ / Municipal Water/Sewer Utilities 16%
/ / Refunded Bonds 5%
/ / 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 general obligation 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 ARIZONA SO
IT IS LESS DIVERSIFIED THAN A NATIONAL FUND AND IS SUBJECT
TO RISKS PARTICULAR TO ARIZONA 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 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 $ 4.25
Annual Income per unit: $ 51.11
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)
$ 0.46
Evaluator's Fee
$ 0.20
Organization Costs
$ 0.53
Other Operating Expenses
-----------
$ 2.33
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
Arizona 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 Arizona Series
were offered between November 30, 1989 and July 11, 1996
and were outstanding on June 30, 1999. OF COURSE, PAST
PERFORMANCE OF PRIOR SERIES IS NO GUARANTEE OF FUTURE
RESULTS OF THIS FUND.
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
FOR PRIOR SERIES
Reflecting all expenses. For periods ended 6/30/99.
WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 1 YEAR 5 YEARS
- ---------------------------------------------------------------
High 1.46% 5.59% 3.88% 6.78%
Average 0.05 4.83 2.82 5.86
Low -2.99 3.95 2.02 4.89
- ---------------------------------------------------------------
Average
Sales fee 2.82% 5.11%
- -------------------------------------------------------------
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 $1,019.62
(as of June 30, 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 Arizona state and local personal income
taxes if you live in Arizona.
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.
5
<PAGE>
- --------------------------------------------------------------------------------
CALIFORNIA INTERMEDIATE 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, intermediate term municipal revenue bonds with an
estimated average life of about 9 years.
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 8 intermediate-term
tax-exempt municipal bonds with an aggregate face amount of
$3,400,000.
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 7%
/ / Hospital/Health Care 13%
/ / Lease Rental Appropriation 28%
/ / Municipal Water/Sewer Utilities 29%
/ / Special Tax Issues 10%
/ / Universities/Colleges 13%
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 lease rental
appropriation and municipal water/sewer utility 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.
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 $ 4.22
Annual Income per unit: $ 50.75
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) 2.75%
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 2.75%
$100,000 to $249,999 2.50%
$250,000 to $499,999 2.25%
$500,000 to $999,999 2.00%
$1,000,000 and over 1.75%
Maximum Exchange Fee 1.75%
ESTIMATED ANNUAL FUND OPERATING EXPENSES
AMOUNT
PER UNIT
-----------
$ 0.69
Trustee's Fee
$ 0.44
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses)
$ 0.38
Evaluator's Fee
$ 0.20
Organization Costs
$ 0.45
Other Operating Expenses
-----------
$ 2.16
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 June 30, 1999. OF COURSE, PAST
PERFORMANCE OF PRIOR SERIES IS NO GUARANTEE OF FUTURE
RESULTS OF THIS FUND.
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
FOR PRIOR SERIES
Reflecting all expenses. For periods ended 6/30/99.
WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 10 YEARS 1 YEAR 5 YEARS 10 YEARS
- -------------------------------------------------------------------
High 3.61% 7.12% 6.00% 4.88% 8.32% 6.53%
Average -0.28 5.22 5.89 2.71 6.26 6.47
Low -3.02 3.57 5.74 -0.03 4.40 6.37
- -------------------------------------------------------------------
Average
Sales fee 3.05% 5.12% 5.67%
- -------------------------------------------------------------------
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 $1,053.56
(as of June 30, 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.
8
<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 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
$2,935,000.
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.
The Portfolio consists of municipal bonds of the following
types:
APPROXIMATE
PORTFOLIO
PERCENTAGE
/ / Hospital/Health Care 25%
/ / Industrial Development Revenue 15%
/ / Lease Rental Appropriation 17%
/ / Refunded Bonds 17%
/ / Special Tax 17%
/ / Universities/Colleges 9%
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 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.
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 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 $ 4.49
Annual Income per unit: $ 53.91
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)
$ 0.44
Evaluator's Fee
$ 0.20
Organization Costs
$ 0.54
Other Operating Expenses
-----------
$ 2.31
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 June 30, 1999. OF COURSE, PAST
PERFORMANCE OF PRIOR SERIES IS NO GUARANTEE OF FUTURE
RESULTS OF THIS FUND.
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
FOR PRIOR SERIES
Reflecting all expenses. For periods ended 6/30/99.
WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 10 YEARS 1 YEAR 5 YEARS 10 YEARS
- -------------------------------------------------------------------
High 3.57% 6.80% 6.38% 5.48% 8.00% 6.98%
Average -0.08 4.94 6.08 2.91 5.94 6.67
Low -3.92 3.62 5.85 -0.57 4.51 6.44
- -------------------------------------------------------------------
Average
Sales fee 3.05% 4.94% 5.78%
- -------------------------------------------------------------------
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 $1,023.38
(as of June 30, 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. 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>
- --------------------------------------------------------------------------------
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
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
$2,940,000.
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 15%
/ / Hospital/Health Care 33%
/ / Industrial Development Revenue 30%
/ / Refunded Bonds 22%
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 industrial development revenue 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 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.
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 $ 4.41
Annual Income per unit: $ 52.93
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)
$ 0.44
Evaluator's Fee
$ 0.20
Organization Costs
$ 0.51
Other Operating Expenses
-----------
$ 2.29
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 June 30, 1999. OF COURSE, PAST
PERFORMANCE OF PRIOR SERIES IS NO GUARANTEE OF FUTURE
RESULTS OF THIS FUND.
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
FOR PRIOR SERIES
Reflecting all expenses. For periods ended 6/30/99.
WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 1 YEAR 5 YEARS
- ---------------------------------------------------------------
High 2.51% 6.47% 3.75% 7.66%
Average -0.07 4.96 2.78 6.05
Low -3.10 3.81 0.93 4.65
- ---------------------------------------------------------------
Average
Sales fee 2.91% 5.36%
- -------------------------------------------------------------
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 $1,032.77
(as of June 30, 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, 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>
- --------------------------------------------------------------------------------
TEXAS 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
$2,975,000.
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 17%
/ / Industrial Development Revenue 25%
/ / Municipal Water/Sewer Utilities 17%
/ / Refunded Bonds 24%
/ / Special Tax 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 industrial development
revenue 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 TEXAS SO IT
IS LESS DIVERSIFIED THAN A NATIONAL FUND AND IS SUBJECT TO
RISKS PARTICULAR TO TEXAS 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 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 $ 4.62
Annual Income per unit: $ 55.49
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)
$ 0.44
Evaluator's Fee
$ 0.20
Organization Costs
$ 0.46
Other Operating Expenses
-----------
$ 2.24
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
Texas 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 Texas Series were
offered between March 9, 1988 and July 11, 1996 and were
outstanding on June 30, 1999. OF COURSE, PAST PERFORMANCE
OF PRIOR SERIES IS NO GUARANTEE OF FUTURE RESULTS OF THIS
FUND.
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
FOR PRIOR SERIES
Reflecting all expenses. For periods ended 6/30/99.
WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 10 YEARS 1 YEAR 5 YEARS 10 YEARS
- -------------------------------------------------------------------
High 2.46% 6.56% 5.99% 4.38% 7.75% 6.58%
Average 0.59 5.08 5.90 3.02 6.11 6.49
Low -3.64 3.66 5.76 -0.47 4.45 6.35
- -------------------------------------------------------------------
Average
Sales fee 2.47% 5.11% 5.83%
- -------------------------------------------------------------------
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 $1,050.59
(as of June 30, 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 Texas state and local personal income taxes
if you live in Texas.
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.
17
<PAGE>
- --------------------------------------------------------------------------------
VIRGINIA 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 8 long-term tax-exempt
municipal bonds with an aggregate face amount of
$2,635,000.
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 19% 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 7%
/ / Hospital/Health Care 35%
/ / Housing 19%
/ / Lease Rental Appropriation 14%
/ / Municipal Water/Sewer Utilities 23%
/ / Refunded Bonds 2%
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 VIRGINIA SO
IT IS LESS DIVERSIFIED THAN A NATIONAL FUND AND IS SUBJECT
TO RISKS PARTICULAR TO VIRGINIA WHICH ARE BRIEFLY DESCRIBED
UNDER STATE CONCENTRATION RISKS LATER IN THIS PROSPECTUS.
18
<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 $ 4.55
Annual Income per unit: $ 54.60
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)
$ 0.49
Evaluator's Fee
$ 0.20
Organization Costs
$ 0.59
Other Operating Expenses
-----------
$ 2.41
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
Virginia 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 Virginia Series
were offered between October 26, 1988 and September 19,
1996 and were outstanding on June 30, 1999. OF COURSE,
PAST PERFORMANCE OF PRIOR SERIES IS NO GUARANTEE OF FUTURE
RESULTS OF THIS FUND.
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
FOR PRIOR SERIES
Reflecting all expenses. For periods ended 6/30/99.
WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 1 YEAR 5 YEARS
- ---------------------------------------------------------------
High 2.35% 6.80% 4.34% 8.00%
Average 0.29 5.13 2.87 6.10
Low -3.69 3.74 -0.62 4.50
- ---------------------------------------------------------------
Average
Sales fee 2.62% 4.77%
- -------------------------------------------------------------
\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.
19
<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 $1,030.57
(as of June 30, 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[, less any remaining deferred
sales fee]. 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 Virginia state and local personal income
taxes if you live in Virginia.
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.
20
<PAGE>
- --------------------------------------------------------------------------------
TAX-FREE VS. TAXABLE INCOME: A COMPARISON OF TAXABLE AND TAX-FREE YIELDS
FOR ARIZONA 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 17.72 4.86 5.47 6.08 6.68 7.29 7.90 8.51 9.12 9.72
$ 0- 25,750 18.18 4.89 5.50 6.11 6.72 7.33 7.94 8.56 9.17 9.78
$ 25,751- 62,450 $ 43,051-104,050 31.40 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 34.26 6.08 6.84 7.61 8.37 9.13 9.89 10.65 11.41 12.17
$158,551-283,150 39.02 6.56 7.38 8.20 9.02 9.84 10.66 11.48 12.30 13.12
$130,251-283,150 39.23 6.58 7.40 8.23 9.05 9.87 10.70 11.52 12.34 13.16
OVER $283,151 OVER $283,151 42.64 6.97 7.85 8.72 9.59 10.46 11.33 12.20 13.08 13.95
</TABLE>
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 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>
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.
21
<PAGE>
- --------------------------------------------------------------------------------
TAX-FREE VS. TAXABLE INCOME: A COMPARISON OF TAXABLE AND TAX-FREE YIELDS
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>
FOR TEXAS RESIDENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EFFECTIVE TAX-FREE YIELD
TAXABLE INCOME 1999* % TAX OF
SINGLE RETURN JOINT RETURN BRACKET 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 15. 4.71 5.29 5.88 6.47 7.06 7.65 8.24 8.82 9.41
$ 25,751- 62,450 $ 43,051-104,050 28. 5.56 6.25 6.94 7.64 8.33 9.03 9.72 10.42 11.11
$ 62,451-130,250 $104,051-158,550 31. 5.80 6.52 7.25 7.97 8.70 9.42 10.14 10.87 11.59
$130,251-283,150 $158,551-283,150 36. 6.25 7.03 7.81 8.59 9.38 10.16 10.94 11.72 12.50
OVER $283,151 OVER $283,151 39. 6.62 7.45 8.28 9.11 9.93 10.76 11.59 12.42 13.25
</TABLE>
FOR VIRGINIA 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 19.89 4.99 5.62 6.24 6.87 7.49 8.11 8.74 9.36 9.99
$ 25,751- 62,450 $ 43,051-104,050 32.14 5.89 6.63 7.37 8.10 8.84 9.58 10.32 11.05 11.79
$ 62,451-130,250 $104,051-158,550 34.97 6.15 6.92 7.69 8.46 9.23 10.00 10.76 11.53 12.30
$130,251-283,150 $158,551-283,150 39.68 6.63 7.46 8.29 9.12 9.95 10.78 11.60 12.43 13.26
OVER $283,151 OVER $283,151 43.07 7.03 7.90 8.78 9.66 10.54 11.42 12.30 13.17 14.05
</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.
22
<PAGE>
WHAT YOU CAN EXPECT FROM YOUR INVESTMENT
MONTHLY INCOME
The Fund will pay you regular monthly income. Your monthly income may vary
because of:
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.
23
<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 Arizona, New York, Ohio and Virginia
Portfolios' concentrations 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
24
<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 Arizona Portfolio's 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 California Portfolio's concentration in
municipal water and sewer revenue bonds. The payment of interest and principal
of these bonds depends on the rates the utilities may charge, the demand for
their services and the cost of operating their business which includes the
expense of complying with environmental and other energy and licensing laws and
regulations. The operating results of utilities are particularly influenced by:
o increases in operating and construction costs; and
o unpredicability of future usage requirements.
Here is what you should know about the Ohio and Texas Portfolios concentrations
in industrial development revenue bonds (IDRs). IDRs are issued to finance
various privately operated projects such as pollution control and manufacturing
facilities. Payment for these bonds depends on:
o creditworthiness of the corporate operator of the project being financed;
o economic factors relating to the particular industry; and,
o in some cases, creditworthiness of an affiliated or third-party guarantor.
Here is what you should know about the California Portfolio's concentration in
lease rental bonds. Lease rental bonds are generally issued by governmental
financing authorities that cannot assess a tax to cover the cost of equipment or
construction of buildings that will be used by a state or local government. The
risks associated with these bonds include:
o the failure of the government to appropriate funds for the leasing rental
payments to service the bonds; and
o rental obligations, and therefore payments, may terminate in the event of
damages to or destruction or condemnation of the of the equipment or
building.
Changes to the portfolio from bond redemptions, maturities and sales may affect
the Fund's concentrations over time.
25
<PAGE>
STATE CONCENTRATION RISK
ARIZONA RISKS
Generally
Arizona's economy is affected by several major factors, including:
o cycles in key industries like real estate, construction and tourism;
o the performance of other economic sectors such as manufacturing, mining,
services and the military;
o employment patterns of major employers within the state;
o consolidation and change in the healthcare market; and
o migration into the state, which causes higher than average population
growth.
State and Local Government
Most of the bonds in the Arizona Trust are not issued by the State of Arizona
itself; however, the financial condition of the state government could hurt the
value of the bonds. Also, both the State and its subdivisions are subject to
legal restrictions that could impair their ability to make payments on bonds,
including:
o certain state laws limit taxation and bond indebtedness;
o other state laws make it difficult to increase taxes, such as by requiring
a two-thirds vote of the state legislature for any increase; and
o Arizona's regulated utilities are limited in their ability to secure rate
increases. Any failure to secure a necessary rate increase could adversely
affect a utility's ability to service its debts.
Arizona voters have tried from time to time to further limit the amount of tax
increases that can be levied without voter approval.
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.
o Since that time the California economy has improved markedly and the
extreme budgetary pressures have begun to lessen. However, the Asian
economic crisis is expected to continue to have some negative effectt on
the State's economy.
State Government
The 1997-98 Budget Act allocated a State budget of approximately $66.9 Billion
and contains no tax increases or reductions. Despite this somewhat improved
state, California's budget is still subject to certain unforeseeable events. For
example:
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.
26
<PAGE>
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.
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.
o agriculture and related industries are also very important.
o recent employment growth has been in non-manufacturing areas.
27
<PAGE>
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.
TEXAS RISKS
Generally
Although the Texas economy has performed well in recent years, it still faces a
number of challenges:
o although oil prices are increasing, the recent low prices have adversely
affected Texas' economy and reduced tax revenues. Some local governments
and school districts have experienced such significant reductions in oil
related tax revenues that they may increase property taxes to meet their
obligations, including debt service.
o exports are a significant part of the Texas economy, as is retail trade in
the Texas-Mexico border area. Economic problems in Mexico and Asia have
hurt the state's economy. Exports to Mexico fluctuated widely in the
mid-1990s as a result of Mexico's financial crisis;
o reductions in federal defense spending have also hurt the state's economy.
Scheduled military base closings will cause the loss of many jobs in the
affected communities, with much of the burden falling on the state's
Hispanic population.
Despite Texas' recent economic performance, Texas continues to have one of the
country's highest poverty rates. This has created greater demand for social
services. The resulting strains on the state could effect its economy
significantly:
o over one-quarter of the state's spending is for health and human services,
and the state has received substantial federal funding to pay for such
services;
o recent federal welfare reform legislation has and will cut back funding for
such services, has reduced benefit levels, and
<PAGE>
has prohibited services for illegal immigrants; and
o the cuts in federal funding and services may have a disproportionate effect
on Texas, since the state has a high number of illegal immigrants and
people dependent on welfare programs. Under the new federal funding scheme
Texas may receive insufficient funds for its own programs, placing
additional strains on state and local finances unless spending on such
programs is reduced.
Texas' general obligation bonds are rated AA by Standard & Poor's, Aa2 by
Moody's and AA+ by Fitch's.
VIRGINIA RISKS
Virginia's economy is highly dependent on defense spending:
o there are major concentrations of defense installations in Northern
Virginia and the Hampton Roads area; and
o any substantial reductions in military spending, including base closings,
could hurt both the state and local economies.
The state's general obligations are rated AAA by Standard & Poor's and Aaa by
Moody's.
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;
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.
29
<PAGE>
SPONSORS' SECONDARY MARKET
While we are not obligated to do so, we will buy back units at net asset value
without any other fee or charge. We may resell the units to other buyers or to
the Trustee. You should consult your financial professional for current market
prices to determine if other broker-dealers or banks are offering higher prices.
We have maintained the secondary market continuously for over 25 years, but we
could discontinue it without prior notice for any business reason.
SELLING UNITS TO THE TRUSTEE
Regardless of whether we maintain a secondary market, you can sell your units to
the Trustee at any time by sending the Trustee a letter (with any outstanding
certificates if you hold Unit certificates). You must properly endorse your
certificates (or execute a written transfer instrument with signatures
guaranteed by an eligible institution). Sometimes, additional documents are
needed such as a trust document, certificate of corporate authority, certificate
of death or appointment as executor, administrator or guardian.
Within seven days after your request and the necessary documents are received,
the Trustee will mail a check to you. Contact the Trustee for additional
information.
As long as we are maintaining a secondary market, the Trustee will sell your
units to us at a price based on net asset value. If there is no secondary
market, the Trustee may sell your units in the over-the-counter market for a
higher price, but it is not obligated to do so. In that case, you will receive
the net proceeds of the sale.
If the Fund does not have cash available to pay you for units you are selling,
the agent for the Sponsors will select bonds to be sold. Bonds will be selected
based on market and credit factors. These sales could be made at times when the
bonds would not otherwise be sold and may result in your receiving less than the
unit par value and also reduce the size and diversity of the Fund.
If you acquire 25% or more of the outstanding units of the Fund and you sell
units with a value exceeding $250,000, the Trustee may choose to pay you 'in
kind' by distributing bonds and cash with a total value equal to the price of
those units. The Trustee will try to distribute bonds in the portfolio pro rata,
but it reserves the right to distribute only one or a few bonds. The Trustee
will act as your agent in an in kind distribution and will either hold the bonds
for your account or sell them as you instruct. You must pay any transaction
costs as well as transfer and ongoing custodial fees on sales of bonds
distributed in kind.
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
30
<PAGE>
maximum exchange fee of 1.90%. You may exchange units of this Fund for units of
certain other Defined Asset Funds at a reduced sales fee if your investment
goals change. To exchange units, you should talk to your financial professional
about what funds are exchangeable, suitable and currently available.
Normally, an exchange is taxable and you must recognize any gain or loss on the
exchange. However, the IRS may try to disallow a loss if the portfolios of the
two 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
31
<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
32
<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.
33
<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 Chase Manhattan Bank, Unit Investment Trust Department, 4 New York
Plaza--6th Floor, New York, New York 10004, is the Trustee.
It is supervised by the Federal Deposit Insurance Corporation, the Board of
Governors of the Federal Reserve System and New York State banking authorities.
UNDERWRITERS' AND SPONSORS' PROFITS
Underwriters receive sales charges when they sell units. The Sponsors also
realized a profit or loss on the initial 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.
34
<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 bonds
contained in a Portfolio, but we cannot predict whether any impact will be
material to the Fund as a whole.
TAXES
The following summary describes some of the important income tax consequences of
holding units. It assumes that you are not a dealer, financial institution,
insurance company or other investor with special circumstances. 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.
GAIN OR LOSS UPON DISPOSITION
When all or part of your share of a bond is disposed of (for example, when the
Fund sells, exchanges or redeems a bond or when 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
35
<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 otherwise. If
you are an individual and sell your units after holding them for more than one
year, you may be entitled to a 20% maximum federal tax rate on any resulting
gains. Consult your tax adviser in this regard. Because the deductibility of
capital losses is subject to limitations, you may not be able to deduct all of
your capital losses.
YOUR BASIS IN THE BONDS
Your aggregate basis in the bonds will be equal to the cost of your units,
including any sales charges and the organizational expenses you pay, adjusted to
reflect any accruals of 'original issue discount,' 'acquisition premium' and
'bond premium'. You should consult your tax adviser in this regard.
EXPENSES
If you are not a corporate investor, you will not be entitled to a deduction for
your share of fees and expenses of the Fund. Also, if you borrowed money in
order to purchase or carry your units, you will not be able to deduct the
interest on this borrowing for federal income tax purposes. The IRS may treat
your purchase of units as made with borrowed money even if the money is not
directly traceable to the purchase of units.
STATE AND LOCAL TAXES
Under the income tax laws of the State and City of New York, the Fund will not
be taxed as a corporation. If you are a New York taxpayer, your income from the
Fund will not be tax-exempt in New York except to the extent that the income is
earned on bonds that are tax-exempt for New York purposes. Depending on where
you live, your income from the Fund may be subject to state and local taxation.
You should consult your tax adviser in this regard.
ARIZONA TAXES
In the opinion of Osborn Maledon, P.A., Phoenix, Arizona, special counsel on
Arizona tax matters:
Under Arizona state income tax laws, the Arizona Trust will not be taxed as a
corporation so long as it is not taxed as a corporation for federal income tax
purposes. Your Arizona income tax consequences will be the same as if you
directly owned your share of all bonds in the Arizona Trust. If you are an
Arizona taxpayer, your interest income from the Arizona Trust will be tax-exempt
in Arizona to the extent of your share of interest income earned on bonds that
are tax-exempt in Arizona, but not interest income earned on other bonds. If you
are an Arizona taxpayer, gains on the sale of bonds by the Arizona Trust or on
the redemption or sale of your units will be subject to Arizona income tax. The
amount of your gain will depend on your aggregate basis in the bonds, which may
be different for Arizona income tax purposes than it is for
36
<PAGE>
federal income tax purposes if the tax basis of bonds includes 'original issue
discount' or 'bond premium.' Depending on where you live, your income from the
Arizona Trust may be subject to taxation under other state and local laws. You
should consult your tax adviser about this.
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.
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 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.
TEXAS TAXES
In the opinion of Hughes & Luce, L.L.P., Dallas, Texas, special counsel on Texas
tax matters:
Under Texas law, the Fund will not pay Texas income taxes on any Fund income so
long as the Fund is not a corporation or limited liability company for Texas tax
purposes. You will not pay income taxes to any Texas taxing authority on income
you receive from the Fund. As long as the Fund owns no tangible property, you
will not pay Texas property taxes on your units in the Fund and the Fund will
not pay Texas property tax on the bonds it holds. Your estate may have to pay
Texas inheritance taxes on any units you own upon
37
<PAGE>
your death. You should consult your tax adviser respecting Texas taxes.
VIRGINIA TAXES
In the opinion of Hunton & Williams, Richmond, Virginia, special counsel on
Virginia tax matters:
Under the income tax laws of the State of Virginia, the Virginia Trust will not
be taxed as a corporation. If you are a Virginia taxpayer, your income from the
Virginia Trust will not be tax-exempt in Virginia except to the extent that the
income is attributable to either (i) interest earned on bonds that are tax-
exempt for Virginia purposes or (ii) profits from the sale of certain Virginia
bonds that have been issued under Virginia legislation specifically exempting
all income from those bonds. If, at the time of your death, you either are a
Virginia resident or, in certain cases, are not a resident of the United States,
your units may be subject to Virginia estate tax. You should consult your tax
adviser in these matters.
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.
38
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 210, (ARIZONA,
CALIFORNIA INTERMEDIATE, NEW YORK, OHIO,
TEXAS AND VIRGINIA TRUSTS), DEFINED ASSET FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsors, Trustee and Holders
of Municipal Investment Trust Fund,
Multistate Series - 210, (Arizona,California Intermediate,
New York, Ohio,Texas and Virginia Trusts), Defined Asset Funds:
We have audited the accompanying statement of condition of
Municipal Investment Trust Fund, Multistate Series - 210,
(Arizona, California Intermediate, New York, Ohio,Texas and
Virginia Trusts), Defined Asset Funds, including the portfolios,
as of June 30, 1999 and the related statements of operations
and of changes in net assets for the years ended June 30, 1999
and 1998 and for the period July 12, 1996 to June 30, 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 June 30, 1999, as shown in such portfolios,
were confirmed to us by The Chase Manhattan Bank, the Trustee.
An audit also includes assessing the accounting principles used
and significant estimates made by the Trustee, as well as
evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial
position of Municipal Investment Trust Fund, Multistate
Series - 210, (Arizona, California Intermediate, New York, Ohio,
Texas and Virginia Trusts), Defined Asset Funds at June 30, 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.
September 15, 1999
D - 1.
<PAGE>
MUNICPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 210 (ARIZONA TRUST),
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
As of June 30, 1999
<TABLE>
<S> <C>
TRUST PROPERTY:
Investment in marketable securities
{ 20} at value (cost $ 2,674,609)(Note 1) ......... $ 2,840,898
{ 36} Accrued interest................................ 65,810
{ 34} Cash - principal ............................... 30,696
Deferred organization costs (Note 5) ........... 1,330
-------------
{ 40} Total trust property ......................... 2,938,734
LESS LIABILITIES:
{ 50} Income advance from Trustee..................... $ 56,569
{143} Accrued Sponsors' fees ......................... 658
Other liabilities .............................. 1,330 58,557
------------- -------------
NET ASSETS, REPRESENTED BY:
{ 80} 2,868 units of fractional undivided
{ 80} interest outstanding (Note 3) ............... 2,871,594
{105} Undistributed net investment income ............ 8,583 $ 2,880,177
------------- =============
{130}UNIT VALUE ($ 2,880,177 / 2,868 units)............ $ 1,004.25
=============
</TABLE>
See Notes to Financial Statements.
D - 2.
<PAGE>
MUNICPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 210 (ARIZONA TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
July 12, 1996
to
Years Ended June 30, June 30,
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
INVESTMENT INCOME:
{ 10} Interest income ........................ $ 160,290 $ 175,972 $ 172,207
{ 20} Trustee's fees and expenses ............ (5,209) (5,399) (6,649)
{ 30} Sponsors' fees ......................... (1,380) (1,460) (1,426)
----------------------------------------------
{ 40} Net investment income .................. 153,701 169,113 164,132
----------------------------------------------
REALIZED OR UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain on
{ 50} securities sold or redeemed .......... 29,813 5,097
Unrealized appreciation (depreciation)
{ 60} of investments ....................... (98,697) 146,550 118,436
----------------------------------------------
Net realized and unrealized
{ 80} gain (loss) on investments ........... (68,884) 151,647 118,436
----------------------------------------------
NET INCREASE IN NET ASSETS
{ 80} RESULTING FROM OPERATIONS .............. $ 84,817 $ 320,760 $ 282,568
==============================================
</TABLE>
See Notes to Financial Statements.
D - 3.
<PAGE>
MUNICPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 210 (ARIZONA TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
July 12, 1996
to
Years Ended June 30, June 30,
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
OPERATIONS:
{ 10} Net investment income .................. $ 153,701 $ 169,113 $ 164,132
Realized gain on
{ 20} securities sold or redeemed .......... 29,813 5,097
Unrealized appreciation (depreciation)
{ 30} of investments ....................... (98,697) 146,550 118,436
----------------------------------------------
Net increase in net assets
{ 40} resulting from operations ............ 84,817 320,760 282,568
----------------------------------------------
DISTRIBUTIONS TO HOLDERS (Note 2):
{ 50} Income ................................ (153,798) (169,231) (154,226)
{ 60} Principal .............................. (10,077)
----------------------------------------------
{ 70} Total distributions .................... (163,875) (169,231) (154,226)
----------------------------------------------
SHARE TRANSACTIONS:
{ 82} Redemption amounts - income ............ (891) (217)
{ 83} Redemption amounts - principal ......... (309,773) (118,661)
----------------------------------------------
{ 84} Total share transactions ............... (310,664) (118,878)
----------------------------------------------
{ 90}NET INCREASE (DECREASE) IN NET ASSETS .... (389,722) 32,651 128,342
{100}NET ASSETS AT BEGINNING OF PERIOD ........ 3,269,899 3,237,248 3,108,906
----------------------------------------------
{110}NET ASSETS AT END OF PERIOD .............. $ 2,880,177 $ 3,269,899 $ 3,237,248
==============================================
PER UNIT:
Income distributions during
{120} period ............................... $ 51.45 $ 51.90 $ 47.02
==============================================
Principal distributions during
{130} period ............................... $ 3.41
==================
Net asset value at end of
{140} period................................ $ 1,004.25 $ 1,033.47 $ 986.97
==============================================
TRUST UNITS:
{ 83} Redeemed during period ................. 296 116
{150} Outstanding at end of period ........... 2,868 3,164 3,280
==============================================
</TABLE>
See Notes to Financial Statements.
D - 4.
<PAGE>
MUNICPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 210 (ARIZONA 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 July 12, 1996 was based upon offering side
evaluations at July 10, 1996, the day prior to the Date of Deposit.
Cost of securities at July 12, 1996 was also based on such
offering 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>
{ 10} Cost of 2,868 units at Date of Deposit ..................... $ 2,845,248
{ 20} Less sales charge .......................................... 126,851
-----------
{ 25} Net amount applicable to Holders ........................... 2,718,397
{ 31} Redemptions of units - net cost of 412 units redeemed
{143} less redemption amounts (principal)....................... (37,925)
{ 40} Realized gain on securities sold or redeemed ............... 34,910
{ 50} Principal distributions .................................... (10,077)
{ 70} Unrealized appreciation of investments...................... 166,289
-----------
{ 80} Net capital applicable to Holders .......................... $ 2,871,594
===========
</TABLE>
4. INCOME TAXES
As of June 30, 1999, unrealized appreciation of investments, based on
cost for Federal income tax purposes, aggregated $166,289, all of which
related to appreciated securities. The cost of investment securities for
Federal income tax purposes was $2,674,609 at June 30, 1999.
5. DEFERRED ORGANIZATION COSTS
Deferred organization costs are being amortized over a period of five years.
Included in "Other liabilities" in the accompanying Statement of Condition
is $ 1,330 payable to the Trustee for reimbursement of costs related to the
organization of the Trust.
D - 5.
<PAGE>
MUNICPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 210 (ARIZONA TRUST),
DEFINED ASSET FUNDS
PORTFOLIO
As of June 30, 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 City of Phoenix Civic Imp. Corp., AZ, Aaa(m) $ 145,000 6.000 % 2019(6) 07/01/06 $ 146,078 $ 156,317
Jr. Lien Wtr. Sys. Rev. Bonds, Ser. @ 100.000
1996
2 Commonwealth of Puerto Rico, Pub. Imp. A 350,000 5.400 2025 07/01/06 321,304 344,712
Bonds of 1996 (G.O. Bonds) @ 101.500
3 Salt River Proj., AZ, Agricultural Imp. AA 400,000 5.500 2019 01/01/03 380,212 402,652
and Pwr. Dist. (Salt River Proj. Elec. @ 100.000
Sys. Rfdg. Rev. Bonds), Ser. 1993 A
4 The Industrial Dev. Auth. of the Cnty. AAA 500,000 5.500 2021 09/01/06 473,915 500,670
of Mohave, AZ, Baptist Hosp. Sys. Rev. @ 102.000
Bonds, Ser. 1996 (MBIA Ins.) (5)
5 The Industrial Dev. Auth. of the Cnty. AAA 500,000 5.000 2015 04/01/04 451,980 479,945
of Pima, AZ, Ins. Rfdg. Rev. Bonds @ 102.000
(Tuscon Med. Ctr.), Ser. 1993 A
(MBIA Ins.) (5)
6 Town of Oro Valley Mun. Prop. Corp., AAA 450,000 5.375 2026 07/01/08 419,940 448,412
AZ, Mun. Wtr. Sys. Acquisition Bonds @ 101.000
(Canada Hills and Rancho Vistoso Wtr.
Util. Acquisition Proj.), Ser. 1996
(MBIA Ins.) (5)
7 Tuscon Unified Sch. Dist. No. 1 of AAA 500,000 5.400 2013 07/01/04 481,180 508,190
Pima Cnty., AZ, Sch. Imp. Bonds, Proj. @ 101.000
of 1989, Ser. E (1993)
(Financial Guaranty Ins.) (5)
--------- --------- ---------
$ 2,845,000 $ 2,674,609 $ 2,840,898
========= ========= =========
</TABLE>
See Notes to Portfolios on page D - 32.
D - 6.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 210 (CALIFORNIA INTERMEDIATE TRUST),
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
As of June 30, 1999
<TABLE>
<S> <C>
TRUST PROPERTY:
Investment in marketable securities
{ 20} at value (cost $ 3,370,215)(Note 1) ......... $ 3,540,732
{ 36} Accrued interest................................ 45,685
{ 34} Cash - principal ............................... 33,444
Deferred organization costs (Note 5) ........... 1,637
-------------
{ 40} Total trust property ......................... 3,621,498
LESS LIABILITIES:
{ 50} Income advance from Trustee..................... $ 34,721
{143} Accrued Sponsors' fees ......................... 777
Other liabilities .............................. 1,637 37,135
------------- -------------
NET ASSETS, REPRESENTED BY:
{ 80} 3,453 units of fractional undivided
{ 80} interest outstanding (Note 3) ............... 3,574,176
{105} Undistributed net investment income ............ 10,187 $ 3,584,363
------------- =============
{130}UNIT VALUE ($ 3,584,363 / 3,453 units)............ $ 1,038.04
=============
</TABLE>
See Notes to Financial Statements.
D - 7.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 210 (CALIFORNIA INTERMEDIATE TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
July 12, 1996
to
Years Ended June 30, June 30,
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
INVESTMENT INCOME:
{ 10} Interest income ........................ $ 184,309 $ 195,156 $ 204,863
{ 20} Trustee's fees and expenses ............ (5,679) (5,916) (6,881)
{ 30} Sponsors' fees ......................... (1,564) (1,655) (1,725)
----------------------------------------------
{ 40} Net investment income .................. 177,066 187,585 196,257
----------------------------------------------
REALIZED OR UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain (loss) on
{ 50} securities sold or redeemed .......... 1,733 13,619 (773)
Unrealized appreciation (depreciation)
{ 60} of investments ....................... (66,029) 100,484 136,062
----------------------------------------------
Net realized and unrealized
{ 80} gain (loss) on investments ........... (64,296) 114,103 135,289
----------------------------------------------
NET INCREASE IN NET ASSETS
{ 80} RESULTING FROM OPERATIONS .............. $ 112,770 $ 301,688 $ 331,546
==============================================
</TABLE>
See Notes to Financial Statements.
D - 8.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 210 (CALIFORNIA INTERMEDIATE TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
July 12, 1996
to
Years Ended June 30, June 30,
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
OPERATIONS:
{ 10} Net investment income .................. $ 177,066 $ 187,585 $ 196,257
Realized gain (loss) on
{ 20} securities sold or redeemed .......... 1,733 13,619 (773)
Unrealized appreciation (depreciation)
{ 30} of investments ....................... (66,029) 100,484 136,062
----------------------------------------------
Net increase in net assets
{ 40} resulting from operations ............ 112,770 301,688 331,546
----------------------------------------------
DISTRIBUTIONS TO HOLDERS (Note 2):
{ 50} Income ................................ (177,244) (187,851) (184,581)
{ 60} Principal .............................. (3,783) (17,122) (4,511)
----------------------------------------------
{ 70} Total distributions .................... (181,027) (204,973) (189,092)
----------------------------------------------
SHARE TRANSACTIONS:
{ 82} Redemption amounts - income ............ (7) (867) (171)
{ 83} Redemption amounts - principal ......... (53,565) (400,912) (154,727)
----------------------------------------------
{ 84} Total share transactions ............... (53,572) (401,779) (154,898)
----------------------------------------------
{ 90}NET DECREASE IN NET ASSETS ............... (121,829) (305,064) (12,444)
{100}NET ASSETS AT BEGINNING OF PERIOD ........ 3,706,192 4,011,256 4,023,700
----------------------------------------------
{110}NET ASSETS AT END OF PERIOD .............. $ 3,584,363 $ 3,706,192 $ 4,011,256
==============================================
PER UNIT:
Income distributions during
{120} period ............................... $ 50.90 $ 51.19 $ 46.81
==============================================
Principal distributions during
{130} period ............................... $ 1.08 $ 4.74 $ 1.15
==============================================
Net asset value at end of
{140} period ............................... $ 1,038.04 $ 1,058.01 $ 1,032.76
==============================================
TRUST UNITS:
{ 83} Redeemed during period ................. 50 381
{150} Outstanding at end of period ........... 3,453 3,503 3,884
==============================================
</TABLE>
See Notes to Financial Statements.
D - 9.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 210 (CALIFORNIA INTERMEDIATE 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 July 12, 1996 was based upon offering side
evaluations at July 10, 1996, the day prior to the Date of Deposit.
Cost of securities at July 12, 1996 was also based on such
offering 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>
{ 10} Cost of 3,453 units at Date of Deposit ..................... $ 3,583,715
{ 20} Less sales charge .......................................... 142,091
-----------
{ 25} Net amount applicable to Holders ........................... 3,441,624
{ 31} Redemptions of units - net cost of 584 units redeemed
{143} less redemption amounts (principal)....................... (27,128)
{ 40} Realized gain on securities sold or redeemed ............... 14,579
{ 50} Principal distributions .................................... (25,416)
{ 70} Unrealized appreciation of investments...................... 170,517
-----------
{ 80} Net capital applicable to Holders .......................... $ 3,574,176
===========
</TABLE>
4. INCOME TAXES
As of June 30, 1999, unrealized appreciation of investments, based on
cost for Federal income tax purposes, aggregated $170,517, all of which
related to appreciated securities. The cost of investment securities for
Federal income tax purposes was $3,370,215 at June 30, 1999.
5. DEFERRED ORGANIZATION COSTS
Deferred organization costs are being amortized over a period of five years.
Included in "Other liabilities" in the accompanying Statement of Condition
is $ 1,637 payable to the Trustee for reimbursement of costs related to the
organization of the Trust.
D - 10.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 210 (CALIFORNIA INTERMEDIATE TRUST),
DEFINED ASSET FUNDS
PORTFOLIO
As of June 30, 1999
<TABLE>
<CAPTION>
Rating of Optional
Portfolio No. and Title of Issues Face Redemption
Securities (1) (4) Amount Coupon Maturities(3) Provisions(3) Cost(2) Value(2)
---------- --------- ----------- ----------- ----------- ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 California Hlth. Fac. Fin. Auth., Hlth. AAA $ 425,000 5.000 % 2008 07/01/04 $ 408,332 $ 432,025
Fac. Rfdg. Rev. Bonds (Catholic @ 102.000
Healthcare West), Ser. 1994 A
(MBIA Ins)
2 County of Tulare, CA, Tulare Cnty. Pub. AAA 460,000 5.500 2007 02/15/06 463,648 486,648
Fac. Corp. Certs. of Part. (Cap. Imp. @ 102.000
Prog.), Ser. 1996 A (MBIA Ins.)
3 Department of Arpts. of the City of AAA 245,000 6.000 2005 None 260,523 265,217
Los Angeles, CA, Los Angeles Intl.
Arpt., Rfdg. Rev. Bonds, Ser. 1995 A
(Financial Guaranty Ins.)
4 East Bay Mun. Util. Dist. (Alameda and AAA 500,000 4.900 2009 06/01/06 470,325 506,835
Contra Costa Cntys., CA), Wastewater @ 102.000
Sys. Sub. Rev. Rfdg. Bonds, Ser. 1996
(Financial Guaranty Ins.)
5 Los Angeles Conv. and Exhibition Ctr. AAA 500,000 5.200 2009 08/15/03 486,095 510,745
Auth., CA, Lease Rev. Bonds, Rfdg. @ 102.000
Ser. 1993 A (MBIA Ins.)
6 Riverside Cnty., Trans. Comm., CA, AAA 335,000 5.700 2006 None 347,804 359,485
Sales Tax Rev.Bonds (Ltd. Tax Bonds),
Ser. 1993 A (AMBAC Ins.)
7 State Pub. Wks. Bd. of the State of AAA 435,000 5.375 2009 03/01/06 430,058 452,852
California, Lease Rev. Bonds @ 102.000
(California Cmnty. Coll.) (Var. Cmnty.
Coll. Proj.), Ser. 1996 A (AMBAC Ins.)
8 The City of Los Angeles, CA, AAA $ 500,000 5.700 2009 06/01/03 $ 503,430 $ 526,925
Wastewater Sys. Rev. Bonds, Rfdg. @ 102.000
Ser. 1993 A (MBIA Ins.)
--------- --------- ---------
$ 3,400,000 $ 3,370,215 $ 3,540,732
========= ========= =========
</TABLE>
See Notes to Portfolios on page D - 32.
D - 11.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 210 (NEW YORK TRUST),
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
As of June 30, 1999
<TABLE>
<S> <C>
TRUST PROPERTY:
Investment in marketable securities
{ 20} at value (cost $ 2,725,918)(Note 1) ......... $ 2,968,980
{ 36} Accrued interest................................ 66,951
{ 34} Cash - principal ............................... 35,867
Deferred organization costs (Note 5) ........... 1,331
-------------
{ 40} Total trust property ......................... 3,073,129
LESS LIABILITIES:
{ 50} Income advance from Trustee..................... $ 56,715
{143} Accrued Sponsors' fees ......................... 719
Other liabilities .............................. 1,331 58,765
------------- -------------
NET ASSETS, REPRESENTED BY:
{ 80} 2,980 units of fractional undivided
{ 80} interest outstanding (Note 3) ............... 3,004,847
{105} Undistributed net investment income ............ 9,517 $ 3,014,364
------------- =============
{130}UNIT VALUE ($ 3,014,364 / 2,980 units)............ $ 1,011.53
=============
</TABLE>
See Notes to Financial Statements.
D - 12.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 210 (NEW YORK TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
July 12, 1996
to
Years Ended June 30, June 30,
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
INVESTMENT INCOME:
{ 10} Interest income ........................ $ 181,916 $ 184,751 $ 179,618
{ 20} Trustee's fees and expenses ............ (5,440) (5,614) (6,778)
{ 30} Sponsors' fees ......................... (1,451) (1,462) (1,426)
----------------------------------------------
{ 40} Net investment income .................. 175,025 177,675 171,414
----------------------------------------------
REALIZED OR UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain on
{ 50} securities sold or redeemed .......... 33,761
Unrealized appreciation (depreciation)
{ 60} of investments ....................... (110,181) 190,945 162,248
----------------------------------------------
Net realized and unrealized
{ 80} gain (loss) on investments ........... (76,420) 190,945 162,248
----------------------------------------------
NET INCREASE IN NET ASSETS
{ 80} RESULTING FROM OPERATIONS .............. $ 98,605 $ 368,620 $ 333,662
==============================================
</TABLE>
See Notes to Financial Statements.
D - 13.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 210 (NEW YORK TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
July 12, 1996
to
Years Ended June 30, June 30,
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
OPERATIONS:
{ 10} Net investment income .................. $ 175,025 $ 177,675 $ 171,414
Realized gain on
{ 20} securities sold or redeemed .......... 33,761
Unrealized appreciation (depreciation)
{ 30} of investments ....................... (110,181) 190,945 162,248
----------------------------------------------
Net increase in net assets
{ 40} resulting from operations ............ 98,605 368,620 333,662
----------------------------------------------
DISTRIBUTIONS TO HOLDERS (Note 2):
{ 50} Income ................................ (175,606) (177,556) (160,982)
----------------------------------------------
{ 70} Total distributions .................... (175,606) (177,556) (160,982)
----------------------------------------------
SHARE TRANSACTIONS:
{ 82} Redemption amounts - income ............ (453)
{ 83} Redemption amounts - principal ......... (312,391)
----------------------------------------------
{ 84} Total share transactions ............... (312,844)
----------------------------------------------
{ 90}NET INCREASE (DECREASE) IN NET ASSETS .... (389,845) 191,064 172,680
{100}NET ASSETS AT BEGINNING OF PERIOD ........ 3,404,209 3,213,145 3,040,465
----------------------------------------------
{110}NET ASSETS AT END OF PERIOD .............. $ 3,014,364 $ 3,404,209 $ 3,213,145
==============================================
PER UNIT:
Income distributions during
{120} period ............................... $ 54.14 $ 54.10 $ 49.05
==============================================
Net asset value at end of
{140} period ............................... $ 1,011.53 $ 1,037.24 $ 979.02
==============================================
TRUST UNITS:
{ 83} Redeemed during period ................. 302
{150} Outstanding at end of period ........... 2,980 3,282 3,282
==============================================
</TABLE>
See Notes to Financial Statements.
D - 14.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 210 (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 July 12, 1996 was based upon offering side
evaluations at July 10, 1996, the day prior to the Date of Deposit.
Cost of securities at July 12, 1996 was also based on such
offering 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>
{ 10} Cost of 2,980 units at Date of Deposit ..................... $ 2,889,352
{ 20} Less sales charge .......................................... 128,707
-----------
{ 25} Net amount applicable to Holders ........................... 2,760,645
{ 31} Redemptions of units - net cost of 302 units redeemed
{143} less redemption amounts (principal)....................... (32,621)
{ 40} Realized gain on securities sold or redeemed ............... 33,761
{ 70} Unrealized appreciation of investments...................... 243,062
-----------
{ 80} Net capital applicable to Holders .......................... $ 3,004,847
===========
</TABLE>
4. INCOME TAXES
As of June 30, 1999, unrealized appreciation of investments, based on
cost for Federal income tax purposes, aggregated $243,062, all of which
related to appreciated securities. The cost of investment securities for
Federal income tax purposes was $2,725,918 at June 30, 1999.
5. DEFERRED ORGANIZATION COSTS
Deferred organization costs are being amortized over a period of five years.
Included in "Other liabilities" in the accompanying Statement of Condition
is $ 1,331 payable to the Trustee for reimbursement of costs related to the
organization of the Trust.
D - 15.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 210 (NEW YORK TRUST),
DEFINED ASSET FUNDS
PORTFOLIO
As of June 30, 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 34th Street Partnership, Inc., 34th St. A1(m) $ 500,000 5.500 % 2023 01/01/03 $ 451,750 $ 499,345
Bus. Imp. Dist. Cap. Imp. Bonds, @ 102.000
Ser. 1993
2 Dormitory Auth. of the State of New AAA 500,000 6.375 2014(6) 05/15/03 504,145 545,305
York, State Univ. Educl. Fac. Rev. @ 102.000
Bonds, Ser. 1992 A
3 Dormitory Auth. of the State of New BBB+ 500,000 5.500 2025 07/01/06 447,020 493,870
York, Dept. of Hlth., Rev. Bonds, @ 102.000
Ser. 1996
4 Dormitory Auth. of the State of New A- 240,000 5.375 2026 02/15/06 210,365 233,851
York, Mental Hlth. Svcs. Fac. Imp. Rev. @ 102.000
Bonds, Ser. 1996 B
5 Dormitory Auth. of the State of New BBB 250,000 5.700 2021 07/01/04 232,725 252,150
York, Upstate Cmnty. Coll. Rev. Bonds, @ 102.000
Ser. 1994 A
6 New York State Energy Research and Dev. A+ 445,000 6.100 2020 07/01/05 442,188 467,384
Auth., Fac. Rfdg. Rev. Bonds (Consol. @ 102.000
Edison Co. of New York, Inc. Proj.),
Ser. 1995 A
7 New York State Urban Dev. Corp., Corr. BBB+ 500,000 5.250 2021 01/01/04 437,725 477,075
Cap. Fac. Rev. Bonds, Rfdg. Ser. 1993 A @ 102.000
--------- --------- ---------
$ 2,935,000 $ 2,725,918 $ 2,968,980
========= ========= =========
</TABLE>
See Notes to Portfolios on page D - 32.
D - 16.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND
MULTISTATE SERIES - 210 (OHIO TRUST),
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
As of June 30, 1999
<TABLE>
<S> <C>
TRUST PROPERTY:
Investment in marketable securities
{ 20} at value (cost $ 2,806,543)(Note 1) ......... $ 2,992,120
{ 36} Accrued interest................................ 47,180
{ 32} Cash - income .................................. 1,452
{ 34} Cash - principal ............................... 32,300
Deferred organization costs (Note 5) ........... 1,331
-------------
{ 40} Total trust property ......................... 3,074,383
LESS LIABILITIES:
{ 50} Income advance from Trustee..................... $ 38,620
{143} Accrued Sponsors' fees ......................... 691
Other liabilities .............................. 1,331 40,642
------------- -------------
NET ASSETS, REPRESENTED BY:
{ 80} 2,982 units of fractional undivided
{ 80} interest outstanding (Note 3) ............... 3,024,420
{105} Undistributed net investment income ............ 9,321 $ 3,033,741
------------- =============
{130}UNIT VALUE ($ 3,033,741 / 2,982 units)............ $ 1,017.35
=============
</TABLE>
See Notes to Financial Statements.
D - 17.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND
MULTISTATE SERIES - 210 (OHIO TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
July 12, 1996
to
Years Ended June 30, June 30,
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
INVESTMENT INCOME:
{ 10} Interest income ........................ $ 171,969 $ 177,182 $ 176,664
{ 20} Trustee's fees and expenses ............ (5,308) (5,559) (6,746)
{ 30} Sponsors' fees ......................... (1,397) (1,436) (1,426)
----------------------------------------------
{ 40} Net investment income .................. 165,264 170,187 168,492
----------------------------------------------
REALIZED OR UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain on
{ 50} securities sold or redeemed .......... 20,488 5,384
Unrealized appreciation (depreciation)
{ 60} of investments ....................... (93,892) 182,616 96,853
----------------------------------------------
Net realized and unrealized
{ 80} gain (loss) on investments ........... (73,404) 188,000 96,853
----------------------------------------------
NET INCREASE IN NET ASSETS
{ 80} RESULTING FROM OPERATIONS .............. $ 91,860 $ 358,187 $ 265,345
==============================================
</TABLE>
See Notes to Financial Statements.
D - 18.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND
MULTISTATE SERIES - 210 (OHIO TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
July 12, 1996
to
Years Ended June 30, June 30,
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
OPERATIONS:
{ 10} Net investment income .................. $ 165,264 $ 170,187 $ 168,492
Realized gain on
{ 20} securities sold or redeemed .......... 20,488 5,384
Unrealized appreciation (depreciation)
{ 30} of investments ....................... (93,892) 182,616 96,853
----------------------------------------------
Net increase in net assets
{ 40} resulting from operations ............ 91,860 358,187 265,345
----------------------------------------------
DISTRIBUTIONS TO HOLDERS (Note 2):
{ 50} Income ................................ (165,522) (170,048) (158,341)
{ 60} Principal .............................. (2,006) (9,693)
----------------------------------------------
{ 70} Total distributions .................... (167,528) (179,741) (158,341)
----------------------------------------------
SHARE TRANSACTIONS:
{ 82} Redemption amounts - income ............ (397) (314)
{ 83} Redemption amounts - principal ......... (204,605) (104,160)
----------------------------------------------
{ 84} Total share transactions ............... (205,002) (104,474)
----------------------------------------------
{ 90}NET INCREASE (DECREASE) IN NET ASSETS .... (280,670) 73,972 107,004
{100}NET ASSETS AT BEGINNING OF PERIOD ........ 3,314,411 3,240,439 3,133,435
----------------------------------------------
{110}NET ASSETS AT END OF PERIOD .............. $ 3,033,741 $ 3,314,411 $ 3,240,439
==============================================
PER UNIT:
Income distributions during
{120} period ............................... $ 53.06 $ 53.03 $ 48.26
==============================================
Principal distributions during
{130} period ............................... $ 0.66 $ 3.05
===================================
Net asset value at end of
{140} period ............................... $ 1,017.35 $ 1,042.92 $ 987.64
==============================================
TRUST UNITS:
{ 83} Redeemed during period.................. 196 103
{150} Outstanding at end of period ........... 2,982 3,178 3,281
==============================================
</TABLE>
See Notes to Financial Statements.
D - 19.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND
MULTISTATE SERIES - 210 (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 July 12, 1996 was based upon offering side
evaluations at July 10, 1996, the day prior to the Date of Deposit.
Cost of securities at July 12, 1996 was also based on such
offering 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>
{ 10} Cost of 2,982 units at Date of Deposit ..................... $ 2,980,760
{ 20} Less sales charge .......................................... 132,877
-----------
{ 25} Net amount applicable to Holders ........................... 2,847,883
{ 31} Redemptions of units - net cost of 299 units redeemed
{143} less redemption amounts (principal)....................... (23,213)
{ 40} Realized gain on securities sold or redeemed ............... 25,872
{ 50} Principal distributions .................................... (11,699)
{ 70} Unrealized appreciation of investments...................... 185,577
-----------
{ 80} Net capital applicable to Holders .......................... $ 3,024,420
===========
</TABLE>
4. INCOME TAXES
As of June 30, 1999, unrealized appreciation of investments, based on
cost for Federal income tax purposes, aggregated $185,577, all of which
related to appreciated securities. The cost of investment securities for
Federal income tax purposes was $2,806,543 at June 30, 1999.
5. DEFERRED ORGANIZATION COSTS
Deferred organization costs are being amortized over a period of five years.
Included in "Other liabilities" in the accompanying Statement of Condition
is $ 1,331 payable to the Trustee for reimbursement of costs related to the
organization of the Trust.
D - 20.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND
MULTISTATE SERIES - 210 (OHIO TRUST),
DEFINED ASSET FUNDS
PORTFOLIO
As of June 30, 1999
<TABLE>
<CAPTION>
Rating of Optional
Portfolio No. and Title of Issues Face Redemption
Securities (1) (4) Amount Coupon Maturities(3) Provisions(3) Cost(2) Value(2)
---------- --------- ----------- ----------- ----------- ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 County of Cuyahoga, OH, Hosp. Rfdg. AAA $ 500,000 5.625 % 2026 01/15/06 $ 477,520 $ 503,525
and Imp. Rev. Bonds (Univ. Hosp. Hlth. @ 102.000
Sys. Inc. Proj.) Ser. 1996 A (MBIA Ins.)
2 County of Mahoning, OH, Hosp. Imp. Rev. AAA 250,000 5.500 2025 None 234,465 251,963
Bonds (Western Reserve Care Sys. Proj.)
Ser. 1995 (MBIA Ins.)
3 County of Montgomery, OH, Hosp. Fac. AAA 460,000 5.500 2026 04/01/06 431,250 458,680
Rev. Rfdg. and Imp. Bonds (Kettering @ 102.000
Med. Ctr.), Ser. 1996 (MBIA Ins.)
4 Ohio Air Quality Dev. Auth., Ctl. Rev. AAA 500,000 5.625 2029 11/15/03 480,000 506,770
Rfdg. Bonds, 1993 Ser. B (Ohio Edison @ 102.000
Co., Proj.) (AMBAC Ins.) (AMBAC Ins.)
5 Ohio Air Quality Dev. Auth., Poll. Ctl. AAA 410,000 5.450 2024 01/01/04 385,047 410,664
Rev. Rfdg. Bonds (The Cincinnati Gas & @ 102.000
Elec. Co. Proj.), Ser. 1994 B
(MBIA Ins.)
6 State of Ohio, Tpke. Rev. Bonds, Ohio AAA 390,000 5.500 2026(6) 02/15/06 368,261 414,445
Tpke. Comm., Ser. 1996 A (MBIA Ins.) @ 102.000
7 Twinsburg City Sch. Dist., OH, Sch. AAA 430,000 5.900 2021 12/01/06 430,000 446,073
Imp. Bonds (G.O. Unlimited Tax) @ 102.000
(Financial Guaranty Ins.)
--------- --------- ---------
$ 2,940,000 $ 2,806,543 $ 2,992,120
========= ========= =========
</TABLE>
See Notes to Portfolios on page D - 32.
D - 21.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 210 (TEXAS TRUST),
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
As of June 30, 1999
<TABLE>
<S> <C>
TRUST PROPERTY:
Investment in marketable securities
{ 20} at value (cost $ 2,897,950)(Note 1) ......... $ 3,070,746
{ 36} Accrued interest................................ 50,137
{ 34} Cash - principal ............................... 30,236
Deferred organization costs (Note 5) ........... 1,331
-------------
{ 40} Total trust property ......................... 3,152,450
LESS LIABILITIES:
{ 50} Income advance from Trustee..................... $ 39,756
{143} Accrued Sponsors' fees ......................... 671
Other liabilities .............................. 1,331 41,758
------------- -------------
NET ASSETS, REPRESENTED BY:
{ 80} 3,007 units of fractional undivided
{ 80} interest outstanding (Note 3) ............... 3,100,982
{105} Undistributed net investment income ............ 9,710 $ 3,110,692
------------- =============
{130}UNIT VALUE ($ 3,110,692 / 3,007 units)............ $ 1,034.48
=============
</TABLE>
See Notes to Financial Statements.
D - 22.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 210 (TEXAS TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
July 12, 1996
to
Years Ended June 30, June 30,
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
INVESTMENT INCOME:
{ 10} Interest income ........................ $ 173,950 $ 184,391 $ 185,574
{ 20} Trustee's fees and expenses ............ (5,170) (5,365) (6,785)
{ 30} Sponsors' fees ......................... (1,370) (1,431) (1,425)
----------------------------------------------
{ 40} Net investment income .................. 167,410 177,595 177,364
----------------------------------------------
REALIZED OR UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain on
{ 50} securities sold or redeemed .......... 6,405 15,679
Unrealized appreciation (depreciation)
{ 60} of investments ....................... (105,533) 160,549 117,780
----------------------------------------------
Net realized and unrealized
{ 80} gain (loss) on investments ........... (99,128) 176,228 117,780
----------------------------------------------
NET INCREASE IN NET ASSETS
{ 80} RESULTING FROM OPERATIONS .............. $ 68,282 $ 353,823 $ 295,144
==============================================
</TABLE>
See Notes to Financial Statements.
D - 23.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 210 (TEXAS TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
July 12, 1996
to
Years Ended June 30, June 30,
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
OPERATIONS:
{ 10} Net investment income .................. $ 167,410 $ 177,595 $ 177,364
Realized gain on
{ 20} securities sold or redeemed .......... 6,405 15,679
Unrealized appreciation (depreciation)
{ 30} of investments ....................... (105,533) 160,549 117,780
----------------------------------------------
Net increase in net assets
{ 40} resulting from operations ............ 68,282 353,823 295,144
----------------------------------------------
DISTRIBUTIONS TO HOLDERS (Note 2):
{ 50} Income ................................ (167,552) (177,463) (166,744)
{ 60} Principal .............................. (10,645) (3,191)
----------------------------------------------
{ 70} Total distributions .................... (178,197) (180,654) (166,744)
----------------------------------------------
SHARE TRANSACTIONS:
{ 82} Redemption amounts - income ............ (169) (731)
{ 83} Redemption amounts - principal ......... (83,137) (208,380)
----------------------------------------------
{ 84} Total share transactions ............... (83,306) (209,111)
----------------------------------------------
{ 90}NET INCREASE (DECREASE) IN NET ASSETS .... (193,221) (35,942) 128,400
{100}NET ASSETS AT BEGINNING OF PERIOD ........ 3,303,913 3,339,855 3,211,455
----------------------------------------------
{110}NET ASSETS AT END OF PERIOD .............. $ 3,110,692 $ 3,303,913 $ 3,339,855
==============================================
PER UNIT:
Income distributions during
{120} period ............................... $ 55.60 $ 55.90 $ 50.79
==============================================
Principal distributions during
{130} period ............................... $ 3.54 $ 1.01
===================================
Net asset value at end of
{140} period ............................... $ 1,034.48 $ 1,070.96 $ 1,017.32
==============================================
TRUST UNITS:
{ 83} Redeemed during period ................. 78 198
{150} Outstanding at end of period ........... 3,007 3,085 3,283
==============================================
</TABLE>
See Notes to Financial Statements.
D - 24.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 210 (TEXAS 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 July 12, 1996 was based upon offering side
evaluations at July 10, 1996, the day prior to the Date of Deposit.
Cost of securities at July 12, 1996 was also based on such
offering 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>
{ 10} Cost of 3,007 units at Date of Deposit ..................... $ 3,078,648
{ 20} Less sales charge .......................................... 137,179
-----------
{ 25} Net amount applicable to Holders ........................... 2,941,469
{ 31} Redemptions of units - net cost of 276 units redeemed
{143} less redemption amounts (principal)....................... (21,531)
{ 40} Realized gain on securities sold or redeemed ............... 22,084
{ 50} Principal distributions .................................... (13,836)
{ 70} Unrealized appreciation of investments...................... 172,796
-----------
{ 80} Net capital applicable to Holders .......................... $ 3,100,982
===========
</TABLE>
4. INCOME TAXES
As of June 30, 1999, unrealized appreciation of investments, based on
cost for Federal income tax purposes, aggregated $172,796, all of which
related to appreciated securities. The cost of investment securities for
Federal income tax purposes was $2,897,950 at June 30, 1999.
5. DEFERRED ORGANIZATION COSTS
Deferred organization costs are being amortized over a period of five years.
Included in "Other liabilities" in the accompanying Statement of Condition
is $ 1,331 payable to the Trustee for reimbursement of costs related to the
organization of the Trust.
D - 25.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 210 (TEXAS TRUST),
DEFINED ASSET FUNDS
PORTFOLIO
As of June 30, 1999
<TABLE>
<CAPTION>
Rating of Optional
Portfolio No. and Title of Issues Face Redemption
Securities (1) (4) Amount Coupon Maturities(3) Provisions(3) Cost(2) Value(2)
---------- --------- ----------- ----------- ----------- ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 Brazos River Auth., TX, Collateralized AAA $ 250,000 5.500 % 2022 11/01/03 $ 235,230 $ 249,658
Poll. Ctl. Rev. Rfdg. Bonds (Texas @ 102.000
Util. Elec. Co. Proj.), Ser. 1993 A
(AMBAC Ins.)
2 City of Euless, TX, Tax and Golf AAA 500,000 5.900 2027 09/15/06 492,935 514,780
Course Surplus Rev. Certs. of Oblig., @ 100.000
Ser. 1995 (MBIA Ins.)
3 City of Houston, TX, Wtr. and Swr. Sys. AAA 340,000 6.200 2023(6) 12/01/05 344,801 370,913
Jr. Lien Rfdg. Bonds, Ser. 1995 A @ 100.000
(MBIA Ins.)
4 City of San Antonio, TX, Hotel Occup. AAA 500,000 5.700 2026 08/15/06 479,185 509,650
Tax Rev. Bonds, (Henry B. Gonzales @ 102.000
Conv. Ctr. Expansion Proj.), Ser. 1996
(Financial Guaranty Ins.)
5 Colorado River Mun. Wtr. Dist., TX, AAA 500,000 5.150 2021 01/01/03 445,820 476,275
Wtr. Sys. Rev. Rfdg. Bonds, Ser. 1993 @ 100.000
(AMBAC Ins.)
6 Harris Cnty., TX, Hlth. Fac. Dev. AAA 385,000 6.375 2024(6) 10/01/04 395,869 421,075
Corp., Hosp. Rev. Bonds (Hermann @ 101.000
Hosp.), Ser. 1994 (MBIA Ins.)
7 Sabine River Auth. of TX, Poll. Ctl. AAA 500,000 6.100 2018 04/01/06 504,110 528,395
Rev. Rfdg. Bonds (Southwestern Elec. @ 102.000
Pwr. Co. Proj.), Ser. 1996 (MBIA Ins.)
--------- --------- ---------
$ 2,975,000 $ 2,897,950 $ 3,070,746
========= ========= =========
</TABLE>
See Notes to Portfolios on page D - 32.
D - 26.
<PAGE>
MUNCIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 210 (VIRGINIA TRUST),
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
As of June 30, 1999
<TABLE>
<S> <C>
TRUST PROPERTY:
Investment in marketable securities
{ 20} at value (cost $ 2,550,816)(Note 1) ......... $ 2,679,914
{ 36} Accrued interest................................ 55,131
{ 34} Cash - principal ............................... 25,776
Deferred organization costs (Note 5) ........... 1,329
-------------
{ 40} Total trust property ......................... 2,762,150
LESS LIABILITIES:
{ 50} Income advance from Trustee..................... $ 45,795
{143} Accrued Sponsors' fees ......................... 617
Other liabilities .............................. 1,329 47,741
------------- -------------
NET ASSETS, REPRESENTED BY:
{ 80} 2,677 units of fractional undivided
{ 80} interest outstanding (Note 3) ............... 2,705,690
{105} Undistributed net investment income ............ 8,719 $ 2,714,409
------------- =============
{130}UNIT VALUE ($ 2,714,409 / 2,677 units)............ $ 1,013.97
=============
</TABLE>
See Notes to Financial Statements.
D - 27.
<PAGE>
MUNCIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 210 (VIRGINIA TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
July 12, 1996
to
Years Ended June 30, June 30,
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
INVESTMENT INCOME:
{ 10} Interest income ........................ $ 157,027 $ 183,889 $ 178,528
{ 20} Trustee's fees and expenses ............ (5,011) (5,441) (2,055)
{ 30} Sponsors' fees ......................... (1,325) (1,454) (1,426)
----------------------------------------------
{ 40} Net investment income .................. 150,691 176,994 175,047
----------------------------------------------
REALIZED OR UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain on
{ 50} securities sold or redeemed .......... 9,075 25,596
Unrealized appreciation (depreciation)
{ 60} of investments ....................... (87,466) 109,569 106,995
----------------------------------------------
Net realized and unrealized
{ 80} gain (loss) on investments ........... (78,391) 135,165 106,995
----------------------------------------------
NET INCREASE IN NET ASSETS
{ 80} RESULTING FROM OPERATIONS .............. $ 72,300 $ 312,159 $ 282,042
==============================================
</TABLE>
See Notes to Financial Statements.
D - 28.
<PAGE>
MUNCIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 210 (VIRGINIA TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
July 12, 1996
to
Years Ended June 30, June 30,
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
OPERATIONS:
{ 10} Net investment income .................. $ 150,691 $ 176,994 $ 175,047
Realized gain on
{ 20} securities sold or redeemed .......... 9,075 25,596
Unrealized appreciation (depreciation)
{ 30} of investments ....................... (87,466) 109,569 106,995
----------------------------------------------
Net increase in net assets
{ 40} resulting from operations ............ 72,300 312,159 282,042
----------------------------------------------
DISTRIBUTIONS TO HOLDERS (Note 2):
{ 50} Income ................................ (150,978) (177,313) (164,424)
{ 60} Principal .............................. (14,049)
----------------------------------------------
{ 70} Total distributions .................... (150,978) (191,362) (164,424)
----------------------------------------------
SHARE TRANSACTIONS:
{ 82} Redemption amounts - income ............ (95) (1,203)
{ 83} Redemption amounts - principal ......... (109,284) (516,594)
----------------------------------------------
{ 84} Total share transactions ............... (109,379) (517,797)
----------------------------------------------
{ 90}NET INCREASE (DECREASE) IN NET ASSETS .... (188,057) (397,000) 117,618
{100}NET ASSETS AT BEGINNING OF PERIOD ........ 2,902,466 3,299,466 3,181,848
----------------------------------------------
{110}NET ASSETS AT END OF PERIOD............... $ 2,714,409 $ 2,902,466 $ 3,299,466
==============================================
PER UNIT:
Income distributions during
{120} period................................ $ 54.71 $ 55.26 $ 50.16
==============================================
Principal distributions during
{130} period................................ $ 5.05
==================
Net asset value at end of
{140} period................................ $ 1,013.97 $ 1,043.30 $ 1,006.55
==============================================
TRUST UNITS:
{ 83} Redeemed during period ................. 105 496
{150} Outstanding at end of period ........... 2,677 2,782 3,278
==============================================
</TABLE>
See Notes to Financial Statements.
D - 29.
<PAGE>
MUNCIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 210 (VIRGINIA 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 July 12, 1996 was based upon offering side
evaluations at July 10, 1996, the day prior to the Date of Deposit.
Cost of securities at July 12, 1996 was also based on such
offering 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>
{ 10} Cost of 2,677 units at Date of Deposit ..................... $ 2,719,825
{ 20} Less sales charge .......................................... 121,348
-----------
{ 25} Net amount applicable to Holders ........................... 2,598,477
{ 31} Redemptions of units - net cost of 601 units redeemed
{143} less redemption amounts (principal)....................... (42,507)
{ 40} Realized gain on securities sold or redeemed ............... 34,671
{ 50} Principal distributions .................................... (14,049)
{ 70} Unrealized appreciation of investments...................... 129,098
-----------
{ 80} Net capital applicable to Holders .......................... $ 2,705,690
===========
</TABLE>
4. INCOME TAXES
As of June 30, 1999, unrealized appreciation of investments, based on
cost for Federal income tax purposes, aggregated $129,098, all of which
related to appreciated securities. The cost of investment securities for
Federal income tax purposes was $2,550,816 at June 30, 1999.
5. DEFERRED ORGANIZATION COSTS
Deferred organization costs are being amortized over a period of five years.
Included in "Other liabilities" in the accompanying Statement of Condition
is $ 1,329 payable to the Trustee for reimbursement of costs related to the
organization of the Trust.
D - 30.
<PAGE>
MUNCIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 210 (VIRGINIA TRUST),
DEFINED ASSET FUNDS
PORTFOLIO
As of June 30, 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 City of Fairfield, CA, Refunding AAA $ 65,000 6.000 % 2022(6) 04/01/07 $ 65,280 $ 71,250
Certificates of Participation @ 102.000
(Fairfield Water Util. Imp. Proj.)
Revenue Bonds
AA 100,000 6.000 2022 04/01/07 100,430 106,523
@ 102.000
2 Commonwealth of Puerto Rico, Pub. Imp. A 185,000 5.400 2025 07/01/06 169,832 182,205
Bonds of 1996 (G.O. Bonds) @ 101.500
3 Fairfax Cnty. Econ. Dev. Auth., VA, AA 375,000 5.500 2018 05/15/04 354,484 377,104
Lease Rev. Bonds (Govt. Ctr. Prop.), @ 102.000
Ser. 1994
4 Fairfax Cnty., VA, Sewer Rev. Bonds, AAA 500,000 5.875 2028 07/15/06 494,655 517,160
Ser. 1996 (MBIA Ins.) (5) @ 102.000
5 Industrial Dev. Auth. of Albemarle A2(m) 500,000 5.500 2020 10/01/03 459,285 483,540
Cnty., VA, Hosp. Rfdg. Rev. Bonds @ 102.000
(Martha Jefferson Hosp.), Ser. 1993
6 Industrial Dev. Auth. of Fairfax Cnty., AA 410,000 6.000 2026 08/15/06 404,350 428,712
VA, Hlth. Care Rev. Bonds (Inova Hlth. @ 102.000
Sys. Proj.), Ser. 1996
7 Virginia Hsg. Dev. Auth., Commonwealth AA+ 500,000 6.125 2013 07/01/06 502,500 513,420
Mtge. Bonds, Ser. 1996 C, Subseries C-2 @ 102.000
--------- --------- ---------
$ 2,635,000 $ 2,550,816 $ 2,679,914
========= ========= =========
</TABLE>
See Notes to Portfolios on page D - 32.
D - 31.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 210, (ARIZONA,
CALIFORNIA INTERMEDIATE, NEW YORK, OHIO,
TEXAS AND VIRGINIA TRUSTS), DEFINED ASSET FUNDS
NOTES TO PORTFOLIOS
As of June 30, 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 a "AAA" rating to the securities. Securities covered by
portfolio insurance are rated "AAA" only as long as they remain in the Trust.
(5) Insured by the indicated municipal bond insurance company.
(6) Bonds with an aggregate face amount of $ 145,000 of the Arizona Trust,
$ 500,000 of the New York Trust, $ 390,000 of the Ohio Trust, $ 725,000 of
the Texas Trust and $ 65,000 of the Virginia Trust have been pre-refunded
and are expected to be called for redemption on the optional redemption
provision dates shown.
D - 32.
Defined
Asset FundsSM
HAVE QUESTIONS ? MUNICIPAL INVESTMENT TRUST FUND
Request the most MULTISTATE SERIES--210
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 Chase Manhattan Bank investment company filed with the
1-800-323-1508 Securities and Exchange Commission in
Washington, D.C. under the:
o Securities Act of 1933 (file no.
333-04063) 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.
15340--9/99
