File No. 33-57157
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
POST-EFFECTIVE
AMENDMENT NO. 3
TO
FORM S-6
For Registration Under the Securities Act of 1933 of Securities
of Unit Investment Trusts Registered on Form N-8B-2
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 113
FIRST TRUST U.S. TREASURY SECURITIES TRUST, SHORT-TERM SERIES 5
AND FIRST TRUST U.S. TREASURY SECURITIES TRUST, SHORT-
INTERMEDIATE SERIES 6
(Exact Name of Trust)
NIKE SECURITIES L.P.
(Exact Name of Depositor)
1001 Warrenville Road
Lisle, Illinois 60532
(Complete address of Depositor's principal executive offices)
NIKE SECURITIES L.P. CHAPMAN AND CUTLER
Attn: James A. Bowen Attn: Eric F. Fess
1001 Warrenville Road 111 West Monroe Street
Lisle, Illinois 60532 Chicago, Illinois 60603
(Name and complete address of agents for service)
It is proposed that this filing will become effective (check
appropriate box)
: : immediately upon filing pursuant to paragraph (b)
: x : April 30, 1997
: : 60 days after filing pursuant to paragraph (a)
: : on (date) pursuant to paragraph (a) of rule (485 or 486)
Pursuant to Rule 24f-2 under the Investment Company Act of
1940, the issuer has registered an indefinite amount of
securities. A 24f-2 Notice for the offering was last filed on
February 20, 1997.
<PAGE>
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 113
FIRST TRUST U.S. TREASURY SECURITIES TRUST,
SHORT-TERM, SERIES 5
10,815,072 UNITS
PROSPECTUS
Part One
Dated April 25, 1997
Note: Part One of this Prospectus may not be distributed unless accompanied by
Part Two.
The Trust
The First Trust U.S. Treasury Securities Trust, Short-Term, Series 5 (the
"Trust") is a fixed portfolio of taxable U.S. Treasury Securities that are
backed by the full faith and credit of the United States Government. All of
the U.S. Treasury Securities consist of maturities of approximately 1-3 years
from the Initial Date of Deposit which were "laddered" to return approximately
40% of the Unit holders original principal in 1996, 40% in 1997 and 20% in
1998. At March 17, 1997, each Unit represented a 1/10,815,072 undivided
interest in the principal and net income of the Trust (see "What is the First
Trust Special Situations Trust?" in Part Two).
The Units being offered by this Prospectus are issued and outstanding Units
which have been purchased by the Sponsor in the secondary market or from the
Trustee after having been tendered for redemption. The profit or loss
resulting from the sale of Units will accrue to the Sponsor. No proceeds from
the sale of Units will be received by the Trust.
Public Offering Price per Unit
The Public Offering Price per Unit is equal to the aggregate value of the
Securities in the Portfolio of the Trust divided by the number of Units
outstanding, plus a sales charge of 1.85% of the Public Offering Price (1.885%
of the amount invested). At March 17, 1997, the Public Offering Price per
Unit was $.41376 plus net interest accrued to date of settlement (three
business days after such date) of $.00026 (see "Market for Units" in Part
Two).
Please retain both parts of this Prospectus for future reference.
______________________________________________________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
______________________________________________________________________________
NIKE SECURITIES L.P.
Sponsor
<PAGE>
Estimated Current Return and Estimated Long-Term Return
Estimated Current Return to Unit holders was 7.49% per annum on March 17,
1997. Estimated Long-Term Return to Unit holders was 1.59% per annum on March
17, 1997. Estimated Current Return is calculated by dividing the Estimated
Net Annual Interest Income per Unit by the Public Offering Price per Unit.
Estimated Long-Term Return is calculated using a formula which (1) takes into
consideration and determines and factors in the relative weightings of the
market values, yields (which take into account the amortization of premiums
and the accretion of discounts) and estimated average life of all of the
Securities in the Trust and (2) takes into account a compounding factor and
the expenses and sales charge associated with each Unit of the Trust. Since
the market values and estimated average lives of the Securities and the
expenses of the Trust will change, there is no assurance that the present
Estimated Current Return and Estimated Long-Term Return indicated above will
be realized in the future. Estimated Current Return and Estimated Long-Term
Return are expected to differ because the calculation of the Estimated Long-
Term Return reflects the estimated date and amount of principal returned while
the Estimated Current Return calculations include only Net Annual Interest
Income and Public Offering Price. The above figures are based on estimated
per Unit cash flows. Estimated cash flows will vary with changes in fees and
expenses, with changes in current interest rates, and with the principal
prepayment, redemption, maturity, exchange or sale of the underlying
Securities. See "What are Estimated Current Return and Estimated Long-Term
Return?" in Part Two.
<PAGE>
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 113
FIRST TRUST U.S. TREASURY SECURITIES TRUST,
SHORT-TERM, SERIES 5
SUMMARY OF ESSENTIAL INFORMATION AS OF MARCH 17, 1997
Sponsor: Nike Securities L.P.
Evaluator: Securities Evaluation Service, Inc.
Trustee: The Chase Manhattan Bank
<TABLE>
<CAPTION>
GENERAL INFORMATION
<S> <C>
Principal Amount of Securities in the Trust $4,357,000
Number of Units 10,815,072
Fractional Undivided Interest in the Trust per Unit 1/10,815,072
Public Offering Price per Unit:
Aggregate Value of Securities in the Portfolio $4,392,083
Aggregate Value of Securities per Unit $.40611
Sales Charge 1.885% (1.85% of Public Offering Price) $.00765
Public Offering Price per Unit $.41376*
Redemption Price and Sponsor' s Repurchase Price
per Unit ($.00765 less than the Public Offering
Price per Unit) $.40611*
Discretionary Liquidation Amount $1,000,000
</TABLE>
Date Trust Established January 5, 1995
Mandatory Termination Date December 31, 1998
[FN]
*Plus net interest accrued to date of settlement (three business days after
purchase) (see "Public Offering Price per Unit" herein and "Redemption of
Units" and "Purchase of Units by the Sponsor" in Part Two).
<PAGE>
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 113
FIRST TRUST U.S. TREASURY SECURITIES TRUST,
SHORT-TERM, SERIES 5
SUMMARY OF ESSENTIAL INFORMATION AS OF MARCH 17, 1997
Sponsor: Nike Securities L.P.
Evaluator: Securities Evaluation Service, Inc.
Trustee: The Chase Manhattan Bank
<TABLE>
<CAPTION>
SPECIAL INFORMATION
<S> <C>
Calculation of Estimated Net Annual Interest Income
per Unit:
Estimated Annual Interest Income per Unit $.03298
Less: Estimated Annual Expense per Unit .00197
_______
Estimated Net Annual Interest Income
per Unit $.03101
=======
Divided by 12 $.00258
=======
Estimated Daily Rate of Net Interest Accrual
per Unit $.00009
=======
Estimated Current Return Based on Public
Offering Price 7.49%
=======
Estimated Long-Term Return Based on Public
Offering Price 1.59%
=======
</TABLE>
Trustee' s Annual Fee: $.00144 per Unit outstanding, exclusive of expenses of
the Trust.
Evaluator' s Annual Fee: $3,513 annually.
Supervisory Fee: Maximum of $.0001 per Unit outstanding annually.
Bookkeeping and administrative expense: Maximum of $.0001 per Unit
outstanding annually.
Distributions will generally be made on or shortly after the last day of each
month to Unit holders of record on the fifteenth day of such month.
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Unit Holders of The First Trust
Special Situations Trust, Series 113, The
First Trust U.S. Treasury Securities Trust,
Short-Term, Series 5
We have audited the accompanying statement of assets and liabilities,
including the portfolio, of The First Trust Special Situations Trust, Series
113, The First Trust U.S. Treasury Securities Trust, Short-Term, Series 5 as
of December 31, 1996, and the related statements of operations and changes in
net assets for the year then ended and for the period from the Initial Date of
Deposit, January 5, 1995, to December 31, 1995. These financial statements
are the responsibility of the Trust' s Sponsor. 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. Our
procedures included confirmation of securities owned as of December 31, 1996,
by correspondence with the Trustee. An audit also includes assessing the
accounting principles used and significant estimates made by the Sponsor, as
well as evaluating the overall 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 The First Trust Special
Situations Trust, Series 113, The First Trust U.S. Treasury Securities Trust,
Short-Term, Series 5 at December 31, 1996, and the results of its operations
and changes in its net assets for the year then ended and for the period from
the Initial Date of Deposit, January 5, 1995, to December 31, 1995, in
conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
March 28, 1997
<PAGE>
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 113
FIRST TRUST U.S. TREASURY SECURITIES TRUST,
SHORT-TERM, SERIES 5
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1996
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Securities, at market value (cost $6,948,679)
(Note 1) $6,880,825
Accrued interest 230,070
___________
7,110,895
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND NET ASSETS
<S> <C> <C>
Cash overdraft 143,605
Accrued liabilities 31,668
___________
175,273
___________
Net assets, applicable to 11,248,469
outstanding units of fractional
undivided interest:
Cost of Trust assets (Note 1) $6,948,679
Net unrealized depreciation (67,854)
Distributable funds 54,797
___________
$6,935,622
===========
Net asset value per unit $.61658
===========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 113
FIRST TRUST U.S. TREASURY SECURITIES TRUST,
SHORT-TERM, SERIES 5
PORTFOLIO
December 31, 1996
The portfolio consists of the following U.S. Treasury Securities:
<TABLE>
<CAPTION>
Coupon Principal Market
rate Maturity amount value
<S> <C> <C> <C>
6.250% 1/31/1997 $2,266,000 2,267,269
8.500 7/15/1997 2,265,000 2,302,735
7.875 1/15/1998 2,266,000 2,310,821
____________________________
$6,797,000 6,880,825
============================
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 113
FIRST TRUST U.S. TREASURY SECURITIES TRUST,
SHORT-TERM, SERIES 5
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Period from
the Initial
Date of
Deposit,
Jan. 5,
Year ended 1995, to
Dec. 31, Dec. 31,
1996 1995
<S> <C> <C>
Interest income $673,322 581,884
Expenses:
Trustee' s fees and related expenses (21,368) (15,321)
Evaluator' s fees (3,513) (2,230)
Supervisory fees (1,380) (927)
Administrative fees (1,380) (927)
_________________________
Investment income - net 645,681 562,479
Net gain (loss) on investments:
Net realized gain (loss) 50,119 2,261
Change in net unrealized
appreciation/depreciation (251,345) 183,491
_________________________
(201,226) 185,752
_________________________
Net increase (decrease) in net assets
from operations $444,455 748,231
=========================
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 113
FIRST TRUST U.S. TREASURY SECURITIES TRUST,
SHORT-TERM, SERIES 5
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Period from
the Initial
Date of
Deposit,
Jan. 5,
Year ended 1995, to
Dec. 31, Dec. 31,
1996 1995
<S> <C> <C>
Net increase (decrease) in net assets
resulting from operations:
Investment income - net $645,681 562,479
Net realized gain (loss) on investments 50,119 2,261
Change in net unrealized appreciation/
depreciation on investments (251,345) 183,491
___________________________
444,455 748,231
Units issued (13,550,000 in 1995) - 13,687,240
Unit redemptions (2,553,354 and 248,177
in 1996 and 1995, respectively):
Principal portion (1,765,547) (253,338)
Net interest accrued (6,035) (520)
___________________________
(1,771,582) (253,858)
Distributions to unit holders:
Investment income - net (655,811) (506,987)
Principal from investment transactions (5,250,650) -
___________________________
(5,906,461) (506,987)
___________________________
Total increase (decrease) in net assets (7,233,588) 13,674,626
Net assets:
At the beginning of the period,
representing 13,801,823 units and
500,000 units at December 31, 1995
and January 5, 1995, respectively 14,169,210 494,584
___________________________
At the end of the period (including
distributable funds applicable to
Trust units of $54,797 and $25,960
at December 31, 1996 and 1995,
respectively) $6,935,622 14,169,210
===========================
Trust units outstanding at the
end of the period 11,248,469 13,801,823
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 113
FIRST TRUST U.S. TREASURY SECURITIES TRUST,
SHORT-TERM, SERIES 5
NOTES TO FINANCIAL STATEMENTS
1. Significant accounting policies
Security valuation -
Securities are stated at values as determined by Securities Evaluation
Service, Inc., certain shareholders of which are officers of the Sponsor. The
values of the securities are based on (1) current bid prices for the
securities obtained from dealers or brokers who customarily deal in securities
comparable to those held by the Trust, (2) current bid prices for comparable
securities, (3) appraisal or (4) any combination of the above.
Security cost -
The Trust' s cost of its portfolio is based on the offering prices of the
securities on the Initial Date of Deposit, January 5, 1995 and the offering
prices of the securities on each supplemental Date of Deposit. The premium or
discount is not being amortized. Realized gain (loss) from security
transactions is reported on an identified cost basis. Sales of securities are
recorded on the trade date.
Federal income taxes -
The Trust is not taxable for Federal income tax purposes. Each unit holder is
considered to be the owner of a pro rata portion of the Trust and,
accordingly, no provision has been made for Federal income taxes.
Expenses of the Trust -
The Trustee' s fees are $.00144 per unit outstanding, exclusive of expenses of
the Trust. Prior to September 1, 1995, the Trustee was United States Trust
Company of New York; effective September 1, 1995, The Chase Manhattan Bank
succeeded United States Trust Company of New York as Trustee. An annual fee
of $3,513 is payable to the Evaluator. Additionally, the Trust pays all
related expenses of the Trustee, recurring financial reporting costs, an
annual supervisory fee payable to an affiliate of the Sponsor and an annual
administrative fee payable to the Sponsor.
Distributions to unit holders -
Distributions to unit holders of investment income - net and principal are
presented on the accrual basis.
2. Unrealized appreciation and depreciation
An analysis of net unrealized depreciation at December 31, 1996 follows:
<TABLE>
<S> <C>
Unrealized depreciation $(77,026)
Unrealized appreciation 9,172
________
$(67,854)
========
</TABLE>
<PAGE>
3. Other information
Cost to investors -
The cost to initial investors of units of the Trust was based on the aggregate
offering price of the securities on the date of an investor' s purchase, plus
a sales charge of 1.85% of the public offering price which is equivalent to
approximately 1.885% of the net amount invested.
Selected data per unit of the Trust
outstanding throughout each period -
<TABLE>
<CAPTION>
Period from the
Initial Date
of Deposit,
Jan. 5, 1995,
Year ended to
Dec. 31, 1996 Dec. 31, 1995
<S> <C> <C>
Interest income $.05245 $.06454
Expenses (.00215) (.00215)
___________________________
Investment income - net .05030 .06239
Distributions to unit holders:
Investment income - net (.05070) (.05929)
Principal (.39267) -
Net gain (loss) on investments (.01697) .03435
___________________________
Total increase (decrease)
in net assets (.41004) .03745
Net assets:
Beginning of the period 1.02662 .98917
___________________________
End of the period $.61658 1.02662
===========================
</TABLE>
Accrued interest to the Initial Date of Deposit and to each supplemental Date
of Deposit totaling $187,080, plus net interest accrued to the First
settlement date and to the settlement date of each supplemental Date of
Deposit, totaling $17,092 ($.00122 per unit), were distributed to the Sponsor
as the unit holder of record. The initial subsequent distribution to unit
holders, $.00052 of investment income - net per unit, was paid on January 31,
1995, to all unit holders of record on January 15, 1995.
Interest income, Expenses and Investment income - net per unit have been
calculated based on the weighted average number of units outstanding during
the period (12,837,518 units and 9,015,713 units in 1996 and 1995,
respectively). Distributions to unit holders of Investment income - net per
unit reflects the Trust' s actual distributions during each period on an
accrual basis. The Net gain (loss) on investments per unit during the period
ended December 31, 1995 includes the effects of changes arising from issuance
of 13,550,000 additional units during the period at net asset values which
differed from the net asset value per unit of the original 500,000 units
($.98917 per unit) on January 5, 1995.
<PAGE>
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 113
FIRST TRUST U.S. TREASURY SECURITIES TRUST,
SHORT-TERM, SERIES 5
PART ONE
Must be Accompanied by Part Two
____________________
P R O S P E C T U S
____________________
SPONSOR: Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
(800) 621-1675
TRUSTEE: The Chase Manhattan Bank
4 New York Plaza, 6th Floor
New York, New York 10004-2413
LEGAL COUNSEL Chapman and Cutler
TO SPONSOR: 111 West Monroe Street
Chicago, Illinois 60603
LEGAL COUNSEL Carter Ledyard & Milburn
TO TRUSTEE: 2 Wall Street
New York, New York 10005
INDEPENDENT Ernst & Young LLP
AUDITORS: Sears Tower
233 South Wacker Drive
Chicago, Illinois 60606
This Prospectus does not constitute an offer to sell, or a solicitation of an
offer to buy, securities in any jurisdiction to any person to whom it is not
lawful to make such offer in such jurisdiction.
This Prospectus does not contain all the information set forth in the
registration statement and exhibits relating thereto, which the Trust has
filed with the Securities and Exchange Commission, Washington, D.C., under the
Securities Act of 1933 and the Investment Company Act of 1940, and to which
reference is hereby made.
<PAGE>
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 113
FIRST TRUST U.S. TREASURY SECURITIES TRUST,
SHORT-INTERMEDIATE, SERIES 6
11,839,054 UNITS
PROSPECTUS
Part One
Dated April 25, 1997
Note: Part One of this Prospectus may not be distributed unless accompanied by
Part Two.
The Trust
The First Trust U.S. Treasury Securities Trust, Short-Intermediate, Series 6
(the "Trust") is a fixed portfolio of taxable U.S. Treasury Securities that
are backed by the full faith and credit of the United States Government. All
of the U.S. Treasury Securities consist of maturities of approximately 2-6
years from the Initial Date of Deposit which were "laddered" to return
approximately 20% of the Unit holders original principal in 1997, 20% in 1998,
20% in 1999 and 40% in 2000. At March 17, 1997, each Unit represented a
1/11,839,054 undivided interest in the principal and net income of the Trust
(see "What is the First Trust Special Situations Trust?" in Part Two).
The Units being offered by this Prospectus are issued and outstanding Units
which have been purchased by the Sponsor in the secondary market or from the
Trustee after having been tendered for redemption. The profit or loss
resulting from the sale of Units will accrue to the Sponsor. No proceeds from
the sale of Units will be received by the Trust.
Public Offering Price per Unit
The Public Offering Price per Unit is equal to the aggregate value of the
Securities in the Portfolio of the Trust divided by the number of Units
outstanding, plus a sales charge of 1.95% of the Public Offering Price (1.989%
of the amount invested). At March 17, 1997, the Public Offering Price per
Unit was $.83610 plus net interest accrued to date of settlement (three
business days after such date) of $.00047 (see "Market for Units" in Part
Two).
Please retain both parts of this Prospectus for future reference.
______________________________________________________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
______________________________________________________________________________
NIKE SECURITIES L.P.
Sponsor
<PAGE>
Estimated Current Return and Estimated Long-Term Return
Estimated Current Return to Unit holders was 6.69% per annum on March 17,
1997. Estimated Long-Term Return to Unit holders was 5.41% per annum on March
17, 1997. Estimated Current Return is calculated by dividing the Estimated
Net Annual Interest Income per Unit by the Public Offering Price per Unit.
Estimated Long-Term Return is calculated using a formula which (1) takes into
consideration and determines and factors in the relative weightings of the
market values, yields (which take into account the amortization of premiums
and the accretion of discounts) and estimated average life of all of the
Securities in the Trust and (2) takes into account a compounding factor and
the expenses and sales charge associated with each Unit of the Trust. Since
the market values and estimated average lives of the Securities and the
expenses of the Trust will change, there is no assurance that the present
Estimated Current Return and Estimated Long-Term Return indicated above will
be realized in the future. Estimated Current Return and Estimated Long-Term
Return are expected to differ because the calculation of the Estimated Long-
Term Return reflects the estimated date and amount of principal returned while
the Estimated Current Return calculations include only Net Annual Interest
Income and Public Offering Price. The above figures are based on estimated
per Unit cash flows. Estimated cash flows will vary with changes in fees and
expenses, with changes in current interest rates, and with the principal
prepayment, redemption, maturity, exchange or sale of the underlying
Securities. See "What are Estimated Current Return and Estimated Long-Term
Return?" in Part Two.
<PAGE>
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 113
FIRST TRUST U.S. TREASURY SECURITIES TRUST,
SHORT-INTERMEDIATE, SERIES 6
SUMMARY OF ESSENTIAL INFORMATION AS OF MARCH 17, 1997
Sponsor: Nike Securities L.P.
Evaluator: Securities Evaluation Service, Inc.
Trustee: The Chase Manhattan Bank
<TABLE>
<CAPTION>
GENERAL INFORMATION
<S> <C>
Principal Amount of Securities in the Trust $9,459,000
Number of Units 11,839,054
Fractional Undivided Interest in the Trust per Unit 1/11,839,054
Public Offering Price per Unit:
Aggregate Value of Securities in the Portfolio $9,705,689
Aggregate Value of Securities per Unit $.81980
Sales Charge 1.989% (1.95% of Public Offering Price) $.01630
Public Offering Price per Unit $.83610*
Redemption Price and Sponsor' s Repurchase Price
per Unit ($.01630 less than the Public Offering
Price per Unit) $.81980*
Discretionary Liquidation Amount $1,000,000
</TABLE>
Date Trust Established January 5, 1995
Mandatory Termination Date December 31, 2000
[FN]
*Plus net interest accrued to date of settlement (three business days after
purchase) (see "Public Offering Price per Unit" herein and "Redemption of
Units" and "Purchase of Units by the Sponsor" in Part Two).
<PAGE>
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 113
FIRST TRUST U.S. TREASURY SECURITIES TRUST,
SHORT-INTERMEDIATE, SERIES 6
SUMMARY OF ESSENTIAL INFORMATION AS OF MARCH 17, 1997
Sponsor: Nike Securities L.P.
Evaluator: Securities Evaluation Service, Inc.
Trustee: The Chase Manhattan Bank
<TABLE>
<CAPTION>
SPECIAL INFORMATION
<S> <C>
Calculation of Estimated Net Annual Interest Income
per Unit:
Estimated Annual Interest Income per Unit $.05793
Less: Estimated Annual Expense per Unit .00203
_______
Estimated Net Annual Interest Income
per Unit $.05590
=======
Divided by 12 $.00466
=======
Estimated Daily Rate of Net Interest Accrual
per Unit $.00016
=======
Estimated Current Return Based on Public
Offering Price 6.69%
=======
Estimated Long-Term Return Based on Public
Offering Price 5.41%
=======
</TABLE>
Trustee' s Annual Fee: $.00149 per Unit outstanding, exclusive of expenses of
the Trust.
Evaluator' s Annual Fee: $.00025 per Unit outstanding annually.
Supervisory Fee: Maximum of $.0001 per Unit outstanding annually.
Bookkeeping and administrative expenses: Maximum of $.0001 per Unit
outstanding annually.
Distributions will generally be made on or shortly after the last day of each
month to Unit holders of record on the fifteenth day of such month.
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Unit Holders of The First Trust
Special Situations Trust, Series 113, The
First Trust U.S. Treasury Securities Trust,
Short-Intermediate, Series 6
We have audited the accompanying statement of assets and liabilities,
including the portfolio, of The First Trust Special Situations Trust, Series
113, The First Trust U.S. Treasury Securities Trust, Short-Intermediate,
Series 6 as of December 31, 1996, and the related statements of operations and
changes in net assets for the year then ended and for the period from the
Initial Date of Deposit, January 5, 1995, to December 31, 1995. These
financial statements are the responsibility of the Trust' s Sponsor. 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. Our
procedures included confirmation of securities owned as of December 31, 1996,
by correspondence with the Trustee. An audit also includes assessing the
accounting principles used and significant estimates made by the Sponsor, as
well as evaluating the overall 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 The First Trust Special
Situations Trust, Series 113, The First Trust U.S. Treasury Securities Trust,
Short-Intermediate, Series 6 at December 31, 1996, and the results of its
operations and changes in its net assets for the year then ended and for the
period from the Initial Date of Deposit, January 5, 1995, to December 31,
1995, in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
March 28, 1997
<PAGE>
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 113
FIRST TRUST U.S. TREASURY SECURITIES TRUST,
SHORT-INTERMEDIATE, SERIES 6
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1996
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Securities, at market value (cost $12,392,887)
(Note 1) $12,372,493
Accrued interest 293,164
___________
12,665,657
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND NET ASSETS
<S> <C> <C>
Cash overdraft 217,409
Accrued liabilities 28,378
Unit redemptions payable 2,688
___________
248,475
___________
Net assets, applicable to 12,027,652
outstanding units of fractional
undivided interest:
Cost of Trust assets (Note 1) $12,392,887
Net unrealized depreciation (20,394)
Distributable funds 44,689
___________
$12,417,182
===========
Net asset value per unit $1.03239
===========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 113
FIRST TRUST U.S. TREASURY SECURITIES TRUST,
SHORT-INTERMEDIATE, SERIES 6
PORTFOLIO
December 31, 1996
The portfolio consists of the following U.S. Treasury Securities:
<TABLE>
<CAPTION>
Coupon Principal Market
rate Maturity amount value
<C> <C> <C> <C>
6.250% 1/31/1997 $2,406,000 2,407,347
5.625 1/31/1998 2,406,000 2,399,142
6.375 1/15/1999 2,406,000 2,417,885
8.500 2/15/2000 2,406,000 2,557,795
8.500 11/15/2000 2,406,000 2,590,324
____________________________
$12,030,000 12,372,493
============================
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 113
FIRST TRUST U.S. TREASURY SECURITIES TRUST,
SHORT-INTERMEDIATE, SERIES 6
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Period from
the Initial
Date of
Deposit,
Jan. 5,
Year ended 1995, to
Dec. 31, Dec. 31,
1996 1995
<S> <C> <C>
Interest income $893,719 508,220
Expenses:
Trustee's fees and related expenses (19,954) (13,172)
Evaluator's fees (3,300) (1,803)
Supervisory fees (1,320) (765)
Administrative fees (1,320) (765)
________________________
Investment income - net 867,825 491,715
Net gain (loss) on investments:
Net realized gain (loss) 1,074 -
Change in net unrealized
appreciation/depreciation (405,158) 384,764
________________________
(404,084) 384,764
________________________
Net increase (decrease) in net assets
resulting from operations $463,741 876,479
========================
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 113
FIRST TRUST U.S. TREASURY SECURITIES TRUST,
SHORT-INTERMEDIATE, SERIES 6
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Period from
the Initial
Date of
Deposit,
Jan. 5,
Year ended 1995, to
Dec. 31, Dec. 31,
1996 1995
<S> <C> <C>
Net increase (decrease) in net assets
resulting from operations:
Investment income - net $867,825 491,715
Net realized gain (loss) on investments 1,074 -
Change in net unrealized appreciation/
depreciation on investments (405,158) 384,764
__________________________
463,741 876,479
Units issued (12,700,000 in 1995) - 13,104,392
Unit redemptions (1,172,348 in 1996):
Principal portion (1,209,879) -
Net interest accrual (3,217) -
___________________________
(1,213,096) -
Distributions to unit holders:
Investment income - net (866,841) (441,282)
Principal from investment transactions - -
___________________________
(866,841) (441,282)
___________________________
Total increase (decrease) in net assets (1,616,196) 13,539,589
Net assets:
At the beginning of the period,
representing 13,200,000 units and
500,000 units at December 31, 1995
and January 5, 1995, respectively 14,033,378 493,789
___________________________
At the end of the period (including
distributable funds applicable to
Trust units of $44,689 and $50,433
at December 31, 1996 and 1995,
respectively) $12,417,182 14,033,378
============================
Trust units outstanding at the end
of the period 12,027,652 13,200,000
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 113
FIRST TRUST U.S. TREASURY SECURITIES TRUST,
SHORT-INTERMEDIATE, SERIES 6
NOTES TO FINANCIAL STATEMENTS
1. Significant accounting policies
Security valuation -
Securities are stated at values as determined by Securities Evaluation
Service, Inc., certain shareholders of which are officers of the Sponsor. The
values of the securities are based on (1) current bid prices for the
securities obtained from dealers or brokers who customarily deal in securities
comparable to those held by the Trust, (2) current bid prices for comparable
securities, (3) appraisal or (4) any combination of the above.
Security cost -
The Trust' s cost of its portfolio is based on the offering prices of the
securities on the Initial Date of Deposit, January 5, 1995 and the offering
prices of the securities on each supplemental Date of Deposit. The premium or
discount is not being amortized. Realized gain (loss) from security
transactions is reported on an identified cost basis. Sales of securities are
recorded on the trade date.
Federal income taxes -
The Trust is not taxable for Federal income tax purposes. Each unit holder is
considered to be the owner of a pro rata portion of the Trust and,
accordingly, no provision has been made for Federal income taxes.
Expenses of the Trust -
The Trustee' s fees are $.00149 per unit outstanding, exclusive of expenses of
the Trust. Prior to September 1, 1995, the Trustee was United States Trust
Company of New York; effective September 1, 1995, The Chase Manhattan Bank
succeeded United States Trust Company of New York as Trustee. An annual fee
of $3,300 is payable to the Evaluator. Additionally, the Trust pays all
related expenses of the Trustee, recurring financial reporting costs, an
annual supervisory fee payable to an affiliate of the Sponsor and an annual
administrative fee payable to the Sponsor.
Distributions to unit holders -
Distributions to unit holders of investment income - net and principal are
presented on the accrual basis.
2. Unrealized depreciation and depreciation
An analysis of net unrealized depreciation at December 31, 1996 follows:
<TABLE>
<S> <C>
Unrealized depreciation $(74,311)
Unrealized appreciation 53,917
________
$(20,394)
========
</TABLE>
<PAGE>
3. Other information
Cost to investors -
The cost to initial investors of units of the Trust was based on the aggregate
offering price of the securities on the date of an investor' s purchase, plus
a sales charge of 1.95% of the public offering price which is equivalent to
approximately 1.989% of the net amount invested.
Selected data per unit of the Trust
outstanding throughout each period -
<TABLE>
<CAPTION>
Period from the
Initial Date
of Deposit,
Jan. 5, 1995,
Year ended to
Dec. 31, 1996 Dec. 31, 1995
<S> <C> <C>
Interest income $.07053 .06973
Expenses (.00204) (.00227)
__________________________
Investment income - net .06849 .06746
Distributions to unit holders:
Investment income - net (.06832) (.06413)
Principal - -
Net gain (loss) on investments (.03091) .07222
__________________________
Total increase (decrease) in
net assets (.03074) .07555
Net assets:
Beginning of the period 1.06313 .98758
__________________________
End of the period $1.03239 1.06313
==========================
</TABLE>
Accrued interest to the Initial Date of Deposit and to each supplemental Date
of Deposit totaling $220,924, plus net interest accrued to the First
settlement date and to the settlement date of each supplemental Date of
Deposit, totaling $15,406 ($.00117 per unit), were distributed to the Sponsor
as the unit holder of record. The initial subsequent distribution to unit
holders, $.00057 of investment income - net per unit, was paid on January 31,
1995, to all unit holders of record on January 15, 1995.
Interest income, Expenses and Investment income - net per unit have been
calculated based on the weighted average number of units outstanding during
the period (12,671,412 units and 7,288,674 units, in 1996 and 1995,
respectively). Distributions to unit holders of Investment income - net per
unit reflects the Trust' s actual distributions during each period on an
accrual basis. The Net gain (loss) on investments per unit during the period
ended December 31, 1995 includes the effects of changes arising from issuance
of 12,700,000 additional units during the period at net asset values which
differed from the net asset value per unit of the original 500,000 units
($.98758 per unit) on January 5, 1995.
<PAGE>
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 113
FIRST TRUST U.S. TREASURY SECURITIES TRUST,
SHORT-INTERMEDIATE, SERIES 6
PART ONE
Must be Accompanied by Part Two
____________________
P R O S P E C T U S
____________________
SPONSOR: Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
(800) 621-1675
TRUSTEE: The Chase Manhattan Bank
4 New York Plaza, 6th Floor
New York, New York 10004-2413
LEGAL COUNSEL Chapman and Cutler
TO SPONSOR: 111 West Monroe Street
Chicago, Illinois 60603
LEGAL COUNSEL Carter Ledyard & Milburn
TO TRUSTEE: 2 Wall Street
New York, New York 10005
INDEPENDENT Ernst & Young LLP
AUDITORS: Sears Tower
233 South Wacker Drive
Chicago, Illinois 60606
This Prospectus does not constitute an offer to sell, or a solicitation of an
offer to buy, securities in any jurisdiction to any person to whom it is not
lawful to make such offer in such jurisdiction.
This Prospectus does not contain all the information set forth in the
registration statement and exhibits relating thereto, which the Trust has
filed with the Securities and Exchange Commission, Washington, D.C., under the
Securities Act of 1933 and the Investment Company Act of 1940, and to which
reference is hereby made.
FIRST TRUST U.S. TREASURY SECURITIES TRUST,
SHORT-INTERMEDIATE SERIES;
FIRST TRUST U.S. TREASURY SECURITIES TRUST,
SHORT-TERM SERIES
PROSPECTUS NOTE: THIS PART TWO PROSPECTUS MAY
Part Two ONLY BE USED WITH PART ONE
Dated March 31, 1997
The Trusts. The First Trust Special Situations Trusts (the "Trusts" and
each a "Trust") are unit investment trusts consisting of portfolios of
taxable U.S. Treasury Securities that are backed by the full faith and
credit of the United States Government (the "Securities"). The
maturities of the U.S. Treasury Securities were "laddered" at the
Initial Date of Deposit to return to Unit holders a certain percentage
of principal annually. See Part One for each Trust.
The objective of each Trust is to obtain safety of capital and current
monthly distributions of interest through an investment in a fixed
portfolio of Securities. Each Trust was a "laddered" portfolio at the
Initial Date of Deposit providing flexibility of principal investment
with maturities ranging as specified in Part One for each Trust.
The guaranteed payment of interest and principal afforded by the
Securities may make an investment in the Trusts particularly well suited
for purchase by Individual Retirement Accounts, Keogh Plans, pension
funds and other tax-deferred retirement plans. Investors should consult
with their tax advisers before investing. See "Why are Investments in
the Trusts Suitable for Retirement Plans?"
Attention Foreign Investors: Your interest income from the Trusts may be
exempt from federal withholding taxes if you are not a United States
citizen or resident and certain conditions are met. See "What is the
Federal Tax Status of Unit Holders?"
For Information on Estimated Current Return and Estimated Long-Term
Return for each Trust, see Part One for each Trust.
The Public Offering Price per Unit is equal to the aggregate bid price
of the Securities in the portfolio of a Trust and the amount of
Purchased Interest for Series 2 of the Trust divided by the number of
Units outstanding, plus a sales charge as indicated in Part One for each
Trust. See "How is the Public Offering Price Determined?," particularly
for the method of evaluation.
Each Unit represents an undivided interest in the principal, Purchased
Interest (for Series 2) and net income of a Trust in the ratio of one
Unit for each $1.00 or $10.00 (as indicated in Part One for each Trust)
principal amount of Securities.
Distributions of interest received by a Trust will be paid in cash
monthly unless the Unit holder elects to have them automatically
reinvested as described herein. See "How Can Distributions to Unit
Holders be Reinvested?" Monthly distributions will be made as indicated
in Part One for each Trust.
The Sponsor, although not obligated to do so, intends to maintain a
market for the Units at prices based upon the aggregate bid price of the
Securities in the portfolio of each Trust. In the absence of such a
market, a Unit holder will nonetheless be able to dispose of the Units
through redemption at prices based upon the bid prices of the underlying
Securities. See "How May Units be Redeemed?"
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Page 1
FIRST TRUST U.S. TREASURY SECURITIES TRUST,
SHORT-INTERMEDIATE SERIES;
FIRST TRUST U.S. TREASURY SECURITIES TRUST,
SHORT-TERM SERIES
The First Trust Special Situations Trust
What is the First Trust Special Situations Trust?
The First Trust Special Situations Trust is a series of investment
companies created by the Sponsor under the name of The First Trust
Special Situations Trust, all of which are generally similar but each of
which is separate and is designated by a different series number (the
"Trusts" and each a "Trust"). Each Trust consists of an underlying
separate unit investment trust and was created under the laws of the
State of New York pursuant to a Trust Agreement (the "Indenture"), dated
the Initial Date of Deposit, with Nike Securities L.P., as Sponsor, The
Chase Manhattan Bank, as Trustee, Securities Evaluation Service, Inc.,
as Evaluator and First Trust Advisors L.P., as Portfolio Supervisor.
The objective of each Trust is to obtain safety of capital and current
monthly distributions of interest through an investment in a fixed
portfolio of taxable U.S. Treasury Securities. Each Trust was a
"laddered" portfolio at the Initial Date of Deposit to provide
flexibility of principal investment with maturities ranging as indicated
in Part One for each Trust. A Trust may be an appropriate medium for
investors who desire to participate in a portfolio of taxable fixed
income securities offering the safety of capital provided by securities
backed by the full faith and credit of the United States but who do not
wish to invest the minimum amount which is required for a direct
investment in the Securities. Because regular payments of principal are
to be received in accordance with the "laddered" maturities of the
Securities and certain Securities may be sold under circumstances
described herein, a Trust is not expected to retain its present size and
composition. Units will remain outstanding until redeemed upon tender to
the Trustee by any Unit holder (which may include the Sponsor) or until
the termination of a Trust pursuant to the Indenture.
Many investors in the Trusts may benefit from the exemption of interest
income from state and local personal income taxes that will pass through
the Trusts to Unit holders in all states. Each Trust has the additional
purpose of providing income which is exempt from withholding for U.S.
Federal income taxes for non-resident alien investors providing certain
conditions are met. A foreign investor must provide a completed W-8 Form
to his financial representative or the Trustee to avoid withholding on
his account.
In selecting the Securities for deposit in a Trust on the Initial Date
of Deposit, the following factors, among others, were considered by the
Sponsor: (i) the types of such securities available; (ii) the prices and
yields of such securities relative to other comparable securities,
including the extent to which such securities are trading at a premium
or at a discount from par; (iii) whether the Securities were issued
after July 18, 1984; and (iv) the maturities of such securities. See
"Portfolio" in Part One for each Trust for information with respect to
the Securities in each Trust.
The Portfolio of a Trust may contain Securities which were acquired at a
market discount. Such Securities trade at less than par value because
the interest coupons thereon at the time such Securities were acquired
were lower than interest coupons on comparable debt securities issued at
prevailing interest rates at such time. If such interest rates for newly
issued and otherwise comparable securities increase, the market discount
of previously issued securities will become greater, and if such
interest rates for newly issued comparable securities decline, the
market discount of previously issued securities will be reduced, other
things being equal. Investors should also note that the value of
Securities purchased at a market discount will increase in value faster
than Securities purchased at a market premium if interest rates
decrease. Conversely, if interest rates increase the value of Securities
purchased at a market discount will decrease faster than Securities
purchased at a premium. Market discount attributable to interest changes
does not indicate a lack of market confidence in the issue. Neither the
Sponsor nor the Trustee shall be liable in any way for any default,
failure or defect in any of the Securities.
The Portfolio of a Trust may contain U.S. Treasury Obligations which
have been stripped of their unmatured interest coupons. The zero coupon
Securities evidence the right to receive a fixed payment at a future
Page 2
date from the U.S. Government, and are backed by the full faith and
credit of the U.S. Government. Zero coupon Securities are purchased at a
deep discount because the buyer obtains only the right to a fixed
payment at a fixed date in the future and does not receive any periodic
interest payments. The effect of owning deep discount bonds which do not
make current interest payments (such as the zero coupon Securities) is
that a fixed yield is earned not only on the original investment, but
also, in effect, on all earnings during the life of the discount
obligation. This implicit reinvestment of earnings at the same rate
eliminates the risk of being unable to reinvest the income on such
obligations at a rate as high as the implicit yield on the discount
obligation, but at the same time eliminates the holder's ability to
reinvest at higher rates in the future. For this reason, the zero coupon
Securities are subject to substantially greater price fluctuations
during periods of changing interest rates than are securities of
comparable quality which make regular interest payments.
The Portfolio of a Trust may contain Securities which were acquired at a
market premium. Such Securities trade at more than par value because the
interest coupons thereon at the time such Securities were acquired were
higher than interest coupons on comparable debt securities issued at
prevailing interest rates at such time. If such interest rates for newly
issued and otherwise comparable securities decrease, the market premium
of previously issued securities will be increased, and if such interest
rates for newly issued comparable securities increase, the market
premium of previously issued securities will be reduced, other things
being equal. The current returns of securities trading at a market
premium are initially higher than the current returns of comparably
rated debt securities of a similar type issued at currently prevailing
interest rates because premium securities tend to decrease in market
value as they approach maturity when the face amount becomes payable.
Market premium attributable to interest changes does not indicate market
confidence in the issue.
The Trustee will have no power to vary the investment of a Trust, i.e.,
the Trustee will have no managerial power to take advantage of market
variations to improve a Unit holder's investment. Each Unit represents
the fractional undivided interest in a Trust set forth in the "Summary
of Essential Information" appearing in Part One for each Trust. To the
extent that any Units are redeemed by the Trustee, the fractional
undivided interest in a Trust represented by each unredeemed Unit will
increase, although the actual interest in such Trust represented by such
fraction will remain substantially unchanged. Units will remain
outstanding until redeemed upon tender to the Trustee by any Unit
holder, which may include the Sponsor, or until the termination of the
Indenture.
Special Considerations. The Securities are direct obligations of the
United States and are backed by its full faith and credit although the
Units of a Trust are not so backed. The Securities are not rated but in
the opinion of the Sponsor have credit characteristics comparable to
those of securities rated "AAA" by nationally recognized rating agencies.
An investment in Units of a Trust should be made with an understanding
of the risks which an investment in fixed rate debt obligations may
entail, including the risk that the value of the Securities and hence
the Units will decline with increases in interest rates. The high
inflation of prior years, together with the fiscal measures adopted to
attempt to deal with it, have resulted in wide fluctuations in interest
rates and, thus, in the value of fixed rate debt obligations generally.
The Sponsor cannot predict whether such fluctuations will continue in
the future.
What is the Rating of the Units?
Standard & Poor's has rated Units of each Trust "AAA." This is the
highest rating assigned by Standard & Poor's. See "Description of
Standard & Poor's Rating." The obtaining of this rating by a Trust
should not be construed as an approval of the offering of the Units by
Standard & Poor's or as a guarantee of the market value of a Trust or
the Units. Standard & Poor's has indicated that this rating is not a
recommendation to buy, hold or sell Units nor does it take into account
the extent to which expenses of a Trust or sales by a Trust of
Securities for less than the purchase price paid by a Trust will reduce
payment to Unit holders of the interest and principal required to be
paid on such Securities. There is no guarantee that the "AAA" investment
rating with respect to the Units will be maintained. Standard & Poor's
will be compensated by the Sponsor for its services in rating Units of
each Trust.
Page 3
What are Estimated Current Return and Estimated Long-Term Return?
Debt securities are customarily offered to investors on a "yield price"
basis (as contrasted to a "dollar price" basis) at the lesser of the
price as computed to maturity of such debt security or to an earlier
redemption date. Since Units of each Trust are offered on a dollar price
basis, the estimated rate of return on an investment in Units of a Trust
is stated in terms of "Estimated Current Return and Estimated Long-Term
Return."
At the date of this Prospectus, the Estimated Current Return and the
Estimated Long-Term Return for each Trust are as set forth in Part One
attached hereto for each Trust. Estimated Current Return is computed by
dividing the Estimated Net Annual Interest Income per Unit by the Public
Offering Price per Unit. The Estimated Net Annual Interest Income per
Unit will vary with changes in fees and expenses of the Trustee and the
Evaluator and with the principal prepayment, redemption, maturity,
exchange or sale of Securities while the Public Offering Price will vary
with changes in the offering price of the underlying Securities;
therefore, there is no assurance that the Estimated Current Return
indicated in Part One for each Trust will be realized in the future.
Estimated Current Return does not take into account timing of
distributions of income and other amounts (including delays in
distribution to Unit Holders), and it only partially reflects the
effects of premiums paid and discounts realized in the purchase price of
Units.
Unlike Estimated Current Return, Estimated Long-Term Return is a measure
of the estimated return to the investor earned over the estimated life
of a Trust. The Estimated Long-Term Return represents an average of the
yields to estimated retirements of the Securities in a Trust and is
adjusted to reflect a compounding factor, expenses and sales charges.
Both Estimated Current Return and Estimated Long-Term Return are subject
to fluctuation with changes in the composition of the Portfolio of a
Trust and changes in market value of the underlying Securities and
changes in fees and expenses, including sales charges, and therefore can
be materially different than the figures set forth in Part One for each
Trust. In addition, return figures may not be directly comparable to
yield figures used to measure other investments, and since return
figures are based on certain assumptions and variables, the actual
returns received by a Unit holder may be higher or lower.
A comparison of estimated current returns and estimated long-term
returns with the returns on various investments is one element to
consider in making an investment decision. The Sponsor may from time to
time in its advertising and sales materials compare the then current
estimated returns on a Trust and returns over specified periods on other
similar Trusts sponsored by Nike Securities L.P. with returns on other
taxable investments such as corporate bonds, bank CDs and money market
accounts or money market funds, each of which has investment
characteristics that any differ from those of the Trusts. Bank CDs and
money market accounts, for example, are insured by an agency of the
federal government. Money market accounts and money market funds provide
stability of principal, but pay interest at rates that vary with the
condition of the short-term debt market. The investment characteristics
of the Trusts are described more fully elsewhere in this Prospectus.
Record Dates for distributions of interest are the fifteenth day of each
month. The Distribution Dates for distributions of interest are the last
day of the month in which the related Record Date occurs.
How are Purchased Interest and Accrued Interest Treated?
Purchased Interest. First Trust U.S. Treasury Securities Trust, Short-
Intermediate, Series 2 contains an element of Purchased Interest.
Purchased Interest is a portion of the unpaid interest that has accrued
on the Securities from the later of the last payment date on the
Securities or the date of issuance thereof through the First Settlement
Date of a Trust and is included in the calculation of the Public
Offering Price for Series 2 of the Trust. Purchased Interest will be
distributed to Unit holders as Units are redeemed or Securities are
sold, mature or are called. See "Summary of Essential Information" in
Part One for the amount of Purchased Interest per 1,000 Units for Series
2 of the Trust. For Series 2 of the Trust, Purchased Interest is an
element of the determination of the price Unit holders will receive in
connection with the sale or redemption of Units prior to the termination
of the Trust.
Accrued Interest. Accrued interest is the accumulation of unpaid
interest on a security from the last day on which interest thereon was
paid. Interest on Securities in a Trust generally is paid semi-annually,
Page 4
although the Trust accrues such interest daily. Because of this, a Trust
always has an amount of interest earned but not yet collected by the
Trustee. For this reason, with respect to sales settling subsequent to
the First Settlement Date of a Trust, the Public Offering Price of Units
will have added to it the proportionate share of accrued interest to the
date of settlement. Unit holders will receive on the next distribution
date of the Trust the amount, if any, of accrued interest paid on their
Units.
For First Trust U.S. Treasury Securities Trust, Short-Intermediate,
Series 2, in an effort to reduce the amount of Purchased Interest which
would otherwise have to be paid by Unit holders, the Trustee may advance
a portion of the accrued interest to the Sponsor as the Unit holder of
record as of the First Settlement Date. Consequently, the amount of
accrued interest to be added to the Public Offering Price of Units will
include only accrued interest from the First Settlement Date to the date
of settlement (other than Purchased Interest already included therein)
less any distributions from the Interest Account subsequent to the First
Settlement Date. See "Rights of Unit Holders-How are Interest and
Principal Distributed?"
For all other Trusts, in an effort to reduce the amount of accrued
interest which would otherwise have to be paid by Unit holders, the
Trustee will advance the amount of the accrued interest to the Sponsor
as the Unit holder of record as of the First Settlement Date.
Consequently, the amount of accrued interest to be added to the Public
Offering Price of Units will include only accrued interest from the
First Settlement Date to the date of settlement less any distributions
from the Interest Account subsequent to the First Settlement Date. See
"Rights of Unit Holders-How are Interest and Principal Distributed?"
Because of the varying interest payment dates of the Securities, accrued
interest at any point in time will be greater than the amount of
interest actually received by the Trust and distributed to Unit holders.
If a Unit holder sells or redeems all or a portion of his Units, he will
be entitled to receive his proportionate share of Purchased Interest, if
any and accrued interest from the purchaser of his Units. Since the
Trustee has the use of the funds (including Purchased Interest for
Series 2 of the Trust) held in the Interest Account for distributions to
Unit holders and since such Account is non-interest bearing to Unit
holders, the Trustee benefits thereby.
What are the Expenses and Charges?
At no cost to the Trusts, the Sponsor has borne all the expenses of
creating and establishing the Trusts, including the cost of the initial
preparation, printing and execution of the Indenture and the
certificates for the Units, legal and accounting expenses of the
Trustee. With the exception of bookkeeping and other administrative
services provided to certain Trusts, for which the Sponsor will be
reimbursed in amounts as set forth in Part One for such Trusts, the
Sponsor will not receive any fees in connection with its activities
relating to the Trusts. Such bookkeeping and administrative charges may
be increased without approval of the Unit holders by amounts not
exceeding proportionate increases under the category "All Services Less
Rent of Shelter" in the Consumer Price Index published by the United
States Department of Labor. The fees payable to the Sponsor for such
services may exceed the actual costs of providing such services for each
Trust, but at no time will the total amount received for such services
rendered to unit investment trusts of which Nike Securities L.P. is the
Sponsor in any calendar year exceed the aggregate cost to the Sponsor of
supplying such services in such year. First Trust Advisors L.P., an
affiliate of the Sponsor, will receive an annual supervisory fee, which
is not to exceed the amount set forth in Part One for each Trust for
providing portfolio supervisory services for such Trust. The fee may
exceed the actual costs of providing such supervisory services for such
Trust, but at no time will the total amount received for portfolio
supervisory services rendered to unit investment trusts of which Nike
Securities L.P. is the Sponsor in any calendar year exceed the aggregate
cost to First Trust Advisors L.P. of supplying such services in such year.
For purposes of evaluation of the Securities in a Trust, the Evaluator
will receive a fee as indicated in Part One for each Trust. The Trustee
pays certain expenses of a Trust for which it is reimbursed by such
Trust. The Trustee will receive for its ordinary recurring services to
each Trust an annual fee as indicated in Part One for each Trust. For a
discussion of the services performed by the Trustee pursuant to its
obligations under the Indentures, reference is made to the material set
forth under "Rights of Unit Holders." The Trustee's and Evaluator's fees
are payable monthly on or before each Distribution Date from the
Interest Account to the extent funds are available and then from the
Principal Account. Since the Trustee has the use of the funds being held
Page 5
in the Principal and Interest Accounts for future distributions, payment
of expenses and redemptions and since such Accounts are non-interest
bearing to Unit holders, the Trustee benefits thereby. Part of the
Trustee's compensation for its services to a Trust is expected to result
from the use of these funds. Both fees may be increased without approval
of the Unit holders by amounts not exceeding proportionate increases
under the category "All Services Less Rent of Shelter" in the Consumer
Price Index published by the United States Department of Labor.
The following additional charges with respect to a Trust are or may be
incurred by a Trust: all expenses (including legal and annual auditing
expenses) of the Trustee incurred in connection with its
responsibilities under the Indentures, except in the event of
negligence, bad faith or willful misconduct on its part; the expenses
and costs of any action undertaken by the Trustee to protect a Trust and
the rights and interests of the Unit holders; fees of the Trustee for
any extraordinary services performed under the Indenture;
indemnification of the Trustee for any loss, liability or expense
incurred by it without negligence, bad faith or willful misconduct on
its part, arising out of or in connection with its acceptance or
administration of a Trust; indemnification of the Sponsor for any loss,
liability or expense incurred without gross negligence, bad faith or
willful misconduct in acting as Depositor of the Trusts; all taxes and
other government charges imposed upon the Securities or any part of a
Trust (no such taxes or charges are being levied or made upon
termination of a Trust). The above expenses and the Trustee's annual
fee, when paid or owing to the Trustee, are secured by a lien on each
Trust. In addition, the Trustee is empowered to sell Securities in order
to make funds available to pay all these amounts if funds are not
otherwise available in the Interest and Principal Accounts. Due to the
minimum principal amount in which Securities may be required to be sold,
the proceeds of such sales may exceed the amount necessary for the
payment of such fees and expenses.
Unless the Sponsor determines that such an audit is not required, the
Indenture requires the accounts of a Trust shall be audited on an annual
basis at the expense of such Trust by independent auditors selected by
the Sponsor. So long as the Sponsor is making a secondary market for
Units, the Sponsor shall bear the cost of such annual audits to the
extent such cost exceeds $.50 per 1,000 Units. Unit holders of a Trust
covered by an audit may obtain a copy of the audited financial
statements from the Trustee upon request.
What is the Tax Status of Unit Holders?
In the opinion of Chapman and Cutler, counsel for the Sponsor, under
existing law:
1. Each Trust is not an association taxable as a corporation for
Federal income tax purposes; each Unit holder will be treated as the
owner of a pro rata portion of a Trust under the Internal Revenue Code
of 1986, as amended (the "Code") and income of such Trust will be
treated as the income of the Unit holders under the Code. Each Unit
holder will be considered to have received his or her pro rata share of
income derived from each Trust asset when such income is considered to
be received by the Trust.
2. Each Unit holder will have a taxable event when a Trust disposes of
a Security, or when the Unit holder redeems or sells his Units. Unit
holders must reduce the tax basis of their Units for their share of
accrued interest received by a Trust, if any, on Securities delivered
after the Unit holders pay for their Units to the extent that such
interest accrued on such Securities before the date the Trust acquired
ownership of the Securities (and the amount of this reduction may exceed
the amount of accrued interest paid to seller) and, consequently, such
Unit holders may have an increase in taxable gain or reduction in
capital loss upon the disposition of such Units. It should be noted that
certain legislative proposals have been made which could effect the
calculation of basis for Unit holders holding securities that are
substantially identical to the Securities. Unit holders should consult
their own tax advisors with regard to calculation of basis. Gain or loss
upon the sale or redemption of Units is measured by comparing the
proceeds of such sale or redemption with the adjusted basis of the
Units. If the Trustee disposes of Securities (whether by sale, payment
on maturity, redemption or otherwise), gain or loss is recognized to the
Unit holder. The amount of such gain or loss is measured by comparing
the Unit holder's pro rata share of the total proceeds from such
disposition with the Unit holder's basis for his or her fractional
interest in the asset disposed of. In the case of a Unit holder who
Page 6
purchases Units, such basis (before adjustment for earned original issue
discount, amortized bond premium and accrued market discount (if the
Unit holder has elected to include such market discount in income as it
accrues), if any) is determined by apportioning the cost of the Units
among each of the Trust's assets ratably according to value as of the
date of acquisition of the Units. The tax basis reduction requirements
of the Code relating to amortization of bond premium may, under some
circumstances, result in the Unit holder realizing a taxable gain when
his Units are sold or redeemed for an amount equal to or less than his
original cost.
3. The basis of each Unit and of each Security which was issued with
original issue discount must be increased by the amount of accrued
original issue discount and the basis of each Unit and of each Security
which was purchased by a Trust at a premium must be reduced by the
annual amortization of bond premium which the Unit holder has properly
elected to amortize under Section 171 of the Code. A Trust may contain
certain "zero coupon" Securities (the "Stripped Treasury Securities")
that are treated as bonds that were originally issued at an original
issue discount provided, pursuant to a Treasury Regulation (the
"Regulation") issued on December 28, 1992, that the amount of original
issue discount determined under Section 1286 of the Code is not less
than a de minimis amount as determined thereunder. Because the Stripped
Treasury Securities represent interests in "stripped" U.S. Treasury
bonds, a Unit holder's initial cost for his pro rata portion of each
Stripped Treasury Security held by a Trust (determined at the time he
acquires his Units, in the manner described above) shall be treated as
its "purchase price" by the Unit holder. Original issue discount is
effectively treated as interest for Federal income tax purposes, and the
amount of original issue discount in this case is generally the
difference between the bond's purchase price and its stated redemption
price at maturity. A Unit holder will be required to include in gross
income for each taxable year the sum of his daily portions of original
issue discount attributable to the Stripped Treasury Securities held by
a Trust as such original issue discount accrues and will, in general, be
subject to Federal income tax with respect to the total amount of such
original issue discount that accrues for such year even though the
income is not distributed to the Unit holders during such year to the
extent it is not less than a de minimis amount as determined under the
Regulation. To the extent that the amount of such discount is less than
the respective de minimis amount, such discount shall be treated as
zero. In general, original issue discount accrues daily under a constant
interest rate method which takes into account the semi-annual
compounding of accrued interest. In the case of the Stripped Treasury
Securities, this method will generally result in an increasing amount of
income to the Unit holders each year. Unit holders should consult their
tax advisers regarding the Federal income tax consequences and accretion
of original issue discount.
4. The Unit holder's aliquot share of the total proceeds received on
the disposition of, or principal paid with respect to, a Security held
by a Trust will constitute ordinary income (which will be treated as
interest income for most purposes) to the extent it does not exceed the
accrued market discount on such Security that has not previously been
included in taxable income by such Unit holder. A Unit holder may
generally elect to include market discount in income as such discount
accrues. In general, market discount is the excess, if any, of the Unit
holder's pro rata portion of the outstanding principal balance of a
Security over the Unit holder's initial tax basis for such pro rata
portion, determined at the time such Unit holder acquires his Units.
However, market discount with respect to any Security will generally be
considered zero if it amounts to less than 0.25% of the obligation's
stated redemption price at maturity times the number of years to
maturity. The market discount rules do not apply to Stripped Treasury
Securities because they are stripped debt instruments subject to special
original issue discount rules as discussed above. If a Unit holder sells
his Units, gain, if any, will constitute ordinary income to the extent
of the aggregate of the accrued market discount on the Unit holder's pro
rata portion of each Security that is held by a Trust that has not
previously been included in taxable income by such Unit holder. In
general, market discount accrues on a ratable basis unless the Unit
holder elects to accrue such discount on a constant interest rate basis.
However, a Unit holder should consult his own tax adviser regarding the
Page 7
accrual of market discount. The deduction by a Unit holder for any
interest expense incurred to purchase or carry Units will be reduced by
the amount of any accrued market discount that has not yet been included
in taxable income by such Unit holder. In general, the portion of any
interest expense which is not currently deductible would be ultimately
deductible when the accrued market discount is included in income.
5. The Code provides that "miscellaneous itemized deductions" are
allowable only to the extent that they exceed two percent of an
individual taxpayer's adjusted gross income. Miscellaneous itemized
deductions subject to this limitation under present law include a Unit
holder's pro rata share of expenses paid by the applicable Trust,
including fees of the Trustee and the Evaluator but does not include
amortizable bond premium on Securities held by a Trust.
The Revenue Reconciliation Act of 1993" (the "Tax Act") raised tax rates
on ordinary income while capital gains remain subject to a 28% maximum
stated rate for taxpayers other than corporations. Because some or all
capital gains are taxed at a comparatively lower rate under the Tax Act,
the Tax Act includes a provision that recharacterizes capital gains as
ordinary income in the case of certain financial transactions that are
"conversion transactions" effective for transactions entered into after
April 30, 1993. Unit holders and prospective investors should consult
with their tax advisers regarding the potential effect of this provision
on their investment in Units.
Legislative proposals have been made that would treat certain
transactions designed to reduce or eliminate risk of loss and
opportunities for gain as constructive sales for purposes of recognition
of gain (but not loss). Unit holders should consult their own tax
advisors with regard to any such constructive sales rules.
A Unit holder of a Trust who is not a citizen or resident of the United
States or a United States domestic corporation (a "Foreign Investor")
will not be subject to U.S. Federal income taxes, including withholding
taxes on amounts distributed from a Trust (including any original issue
discount) on, or any gain from the sale or other disposition of, his
Units or the sale or disposition of any Securities by the Trustee,
provided that (i) the interest income or gain is not effectively
connected with the conduct by the Foreign Investor of a trade or
business within the United States, (ii) with respect to any gain, the
Foreign Investor (if an individual) is not present in the United States
for 183 days or more during the taxable year, and (iii) the Foreign
Investor provides the required certification of his status and of the
matters contained in clauses (i) and (ii) above, and further provided
that the exemption from withholding for U.S. Federal income taxes for
interest on any U.S. Securities shall only apply to the extent the
Securities were issued after July 18, 1984.
Unless an applicable treaty exemption applies and proper certification
is made, amounts otherwise distributable by a Trust to a Foreign
Investor will generally be subject to withholding taxes under Section
1441 of the Code unless the Unit holder timely provides his financial
representative or the Trustee with a statement that (i) is signed by the
Unit holder under penalties of perjury, (ii) certifies that such Unit
holder is not a United States person, or in the case of an individual,
that he is neither a citizen nor a resident of the United States, and
(iii) provides the name and address of the Unit holder. The statement
may be made, at the option of the person otherwise required to withhold,
on Form W-8 or on a substitute form that is substantially similar to
Form W-8. If the information provided on the statement changes, the
beneficial owner must so inform the person otherwise required to
withhold within 30 days of such change.
Each Unit holder (other than a foreign investor who has properly
provided the certifications described above) will be requested to
provide the Unit holder's taxpayer identification number to the Trustee
and to certify that the Unit holder has not been notified that payments
to the Unit holder are subject to back-up withholding. If the proper
taxpayer identification number and appropriate certification are not
provided when requested, distributions by a Trust to such Unit holder
will be subject to back-up withholding.
Investment in a Trust may be particularly well suited for purchase by
funds and accounts of individual investors that are exempt from Federal
income taxes such as Individual Retirement Accounts, Keogh Plans,
pension funds and other tax-deferred retirement plans (see "Why are
Investments in a Trust Suitable for Retirement Plans?").
The foregoing discussions relate only to Federal income taxes in
distributions by a Trust. Foreign Unit holders should consult their own
tax advisers with respect to the foreign and United States Federal tax
consequences of ownership of Units.
Page 8
The Sponsor believes that Unit holders who are individuals will not be
subject to any state personal income taxes on the interest received by a
Trust and distributed to them. However, Unit holders (including
individuals) may be subject to state and local taxes on any capital
gains (or market discount treated as ordinary income) derived from a
Trust and to other state and local taxes (including corporate income or
franchise taxes, personal property or intangible taxes, and estate or
inheritance taxes) on their Units or the income derived therefrom. In
addition, individual Unit holders (and any other Unit holders which are
not subject to state and local taxes on the interest income derived from
a Trust) will probably not be entitled to a deduction for state and
local tax purposes for their share of the fees and expenses paid by a
Trust, for any amortized bond premium or for any interest on
indebtedness incurred to purchase or carry their Units. Therefore, even
though the Sponsor believes that interest income from a Trust is exempt
from state personal income taxes in all states, Unit holders should
consult their own tax advisers with respect to state and local taxation.
It should be remembered that even if distributions are reinvested they
are still treated as distributions for income tax purposes (see "How Can
Distributions to Unit Holders be Reinvested?").
It should also be remembered that Unit holders may be required for
Federal income tax purposes to include amounts in ordinary gross income
in advance of the receipt of the cash attributable to such income.
The market discount rules do not apply to stripped Treasury Securities
because they are stripped debt instruments subject to special original
issue discount rules. Unit holders should consult their tax advisers as
to the amount of original issue discount which accrues.
If a Unit holder does not elect to annually include accrued market
discount in taxable income as it accrues, deduction for any interest
expense incurred by the Unit holder which is incurred to purchase or
carry his Units will be reduced by such accrued market discount. In
general, the portion of any interest expense which was not currently
deductible would ultimately be deductible when the accrued market
discount is included in income. Unit holders should consult their tax
advisers regarding whether an election should be made to include market
discount in income as it accrues and as to the amount of interest
expense which may not be currently deductible.
The tax basis of a Unit holder with respect to his interest in a
Security is increased by the amount of original issue discount (and
market discount, if the Unit holder elects to include market discount,
if any, on the Securities held by a Trust in income as it accrues)
thereon properly included in the Unit holder's gross income as
determined for Federal income tax purposes and reduced by the amount of
any amortized acquisition premium which the Unit holder has properly
elected to amortize under Section 171 of the Code. A Unit holder's tax
basis in his Units will equal his tax basis in his pro rata portion of
all of the assets of the Trust.
A Unit holder will recognize taxable capital gain (or loss) when all or
part of his pro rata interest in a Security is disposed of in a taxable
transaction for an amount greater (or less) than his tax basis therefor.
Any gain recognized on a sale or exchange and not constituting a
realization of accrued "market discount," and any loss will, under
current law, generally be capital gain or loss except in the case of a
dealer or financial institution. As previously discussed, gain realized
on the disposition of the interest of a Unit holder in any Security
deemed to have been acquired with market discount will be treated as
ordinary income to the extent the gain does not exceed the amount of
accrued market discount not previously taken into income. Any capital
gain or loss arising from the disposition of a Security by the Trust or
the disposition of Units by a Unit holder will be short-term capital
gain or loss unless the Unit holder has held his Units for more than one
year in which case such capital gain or loss will be long term. The tax
basis reduction requirements of the Code relating to amortization of
bond premium may under some circumstances, result in the Unit holder
realizing taxable gain when his Units are sold or redeemed for an amount
equal to or less than his original cost.
If the Unit holder disposes of a Unit, he is deemed thereby to have
disposed of his entire pro rata interest in all Trust assets including
his pro rata portion of the Securities represented by the Unit. This may
result in a portion of the gain, if any, on such sale being taxable as
ordinary income under the market discount rules (assuming no election
was made by the Unit holder to include market discount in income as it
accrues) as previously discussed.
Page 9
Why are Investments in a Trust Suitable for Retirement Plans?
A Trust may be well suited for purchase by Individual Retirement
Accounts, Keogh Plans, pension funds and other tax-deferred retirement
plans. Generally, the federal income tax relating to capital gains and
income received in each of the foregoing plans is deferred until
distributions are received. Distributions from such plans are generally
treated as ordinary income but may, in some cases, be eligible for
special averaging or tax-deferred rollover treatment. Investors
considering participation in any such plan should review specific tax
laws related thereto and should consult their attorneys or tax advisers
with respect to the establishment and maintenance of any such plan. Such
plans are offered by brokerage firms and other financial institutions.
The Trust will waive the $1,000 minimum investment requirement for tax-
deferred retirement plan accounts. The minimum investment is $250 for
tax-deferred retirement plans such as IRA accounts. Fees and charges
with respect to such plans may vary.
How Can Distributions to Unit Holders be Reinvested?
Universal Distribution Option. Unit holders may elect participation in a
Universal Distribution Option which permits a Unit holder to direct the
Trustee to distribute principal and interest payments to any other
investment vehicle of which the Unit holder has an existing account. For
example, at a Unit holder's direction, the Trustee would distribute
automatically on the applicable distribution date interest income,
capital gains or principal on the participant's Units to, among other
investment vehicles, a Unit holder's checking, bank savings, money
market, insurance, reinvestment or any other account. All such
distributions, of course, are subject to the minimum investment and
sales charges, if any, of the particular investment vehicle to which
distributions are directed. The Trustee will notify the participant of
each distribution pursuant to the Universal Distribution Option. The
Trustee will distribute directly to the Unit holder any distributions
which are not accepted by the specified investment vehicle. A
participant may at any time, by so notifying the Trustee in writing,
elect to terminate his participation in the Universal Distribution
Option and receive directly future distributions on his Units.
PUBLIC OFFERING
How is the Public Offering Price Determined?
Units are offered at the Public Offering Price. The Public Offering
Price is based on the Evaluator's determination of the aggregate bid
price of the Securities in a Trust, including any money in the Principal
Account other than money required to redeem tendered Units, plus the
amount of Purchased Interest for Series 2 of the Trust and also includes
a sales charge as indicated in Part One. Also added to the Public
Offering Price is a proportionate share of interest accrued but unpaid
on the Securities after the First Settlement Date to the date of
settlement of Units (see "How are Purchased Interest and Accrued
Interest Treated?").
Investors who purchase Units through registered broker/dealers who
charge periodic fees for financial planning, investment advisory or
asset management services or provide such services in connection with
the establishment of an investment account for which a comprehensive
"wrap fee" charge is imposed may purchase Units at the Public Offering
Price less the concession the Sponsor typically would allow such
broker/dealer. See "Public Offering-How are Units Distributed?"
The aggregate price of the Securities in a Trust is determined by
Securities Evaluation Service, Inc. acting as evaluator (the
"Evaluator") on the basis of bid prices (1) on the basis of current
market prices for the Securities obtained from dealers or brokers who
customarily deal in Securities comparable to those held by such Trust;
(2) if such prices are not available for any of the Securities, on the
basis of current market prices for comparable securities; (3) by
determining the value of the Securities by appraisal; or (4) by any
combination of the above.
The secondary market Public Offering Price will be equal to the bid
price per Unit of the Securities in a Trust and, if applicable, the
amount of Purchased Interest for Series 2 of the Trust per 1,000 Units
plus the applicable sales charge.
Although payment is normally made three business days following the
order for purchase (the "date of settlement"), payment may be made prior
thereto. A person will become owner of the Units on the date of
Page 10
settlement provided payment has been received. Cash, if any, made
available to the Sponsor prior to the date of settlement for the
purchase of Units may be used in the Sponsor's business and may be
deemed to be a benefit to the Sponsor, subject to the limitations of the
Securities Exchange Act of 1934. Delivery of Certificates representing
Units so ordered will be made three business days following such order
or shortly thereafter. Initial transaction statements for Units held in
uncertificated form representing Units so ordered will be issued to the
registered owner of such Units within two business days of the issuance
of such Units. See "Rights of Unit Holders-How May Units be Redeemed?"
for information regarding the ability to redeem Units ordered for
purchase.
How are Units Distributed?
Units repurchased in the secondary market may be offered by this Part
Two Prospectus at the secondary market public offering price determined
in the manner described above.
The Sponsor reserves the right to change the amount of the concession to
dealers and others from time to time. Certain commercial banks are
making Units of the Trusts available to their customers on an agency
basis. A portion of the sales charge paid by these customers is retained
by or remitted to the banks. Under the Glass-Steagall Act, banks are
prohibited from underwriting Trust Units; however, the Glass-Steagall
Act does permit certain agency transactions and the banking regulators
have not indicated that these particular agency transactions are not
permitted under such Act.
What are the Profits of the Sponsor?
In maintaining a market for the Units, the Sponsor will realize profits
or sustain losses in the amount of any difference between the price at
which Units are purchased (based on the bid prices of the Securities in
a Trust) and the price at which Units are resold (which price is also
based on the bid prices of the Securities in such Trust and includes a
sales charge as indicated in Part One for each Trust) or redeemed. The
secondary market public offering price of Units may be greater or less
than the cost of such Units to the Sponsor.
RIGHTS OF UNIT HOLDERS
How is Evidence of Ownership Issued and Transferred?
The Trustee is authorized to treat as the record owner of Units that
person who is registered as such owner on the books of the Trustee.
Ownership of Units may be evidenced by registered certificates executed
by the Trustee and the Sponsor. Delivery of certificates representing
Units ordered for purchase is normally made three business days
following such order or shortly thereafter. Certificates are
transferable by presentation and surrender to the Trustee properly
endorsed or accompanied by a written instrument or instruments of
transfer. Certificates to be redeemed must be properly endorsed or
accompanied by a written instrument or instruments of transfer. A Unit
holder must sign exactly as his name appears on the face of the
certificate with the signature guaranteed by a participant in the
Securities Transfer Agents Medallion Program ("STAMP") or such other
signature guaranty program in addition to, or in substitution for,
STAMP, as may be accepted by the Trustee. In certain instances the
Trustee may require additional documents such as, but not limited to,
trust instruments, certificates of death, appointments as executor or
administrator or certificates of corporate authority. Record ownership
may occur before settlement.
Certificates will be issued in fully registered form, transferable only
on the books of the Trustee in denominations of one Unit or any multiple
thereof, numbered serially for purposes of identification.
Unit holders may elect to hold their Units in uncertificated form. The
Trustee will maintain an account for each such Unit holder and will
credit each such account with the number of Units purchased by that Unit
holder. Within two business days of the issuance or transfer of Units
held in uncertificated form, the Trustee will send to the registered
owner of Units a written initial transaction statement containing a
description of a Trust; the number of Units issued or transferred; the
name, address and taxpayer identification number, if any, of the new
registered owner; a notation of any liens and restrictions of the issues
and any adverse claims to which such Units are or may be subject or a
statement that there are no such liens, restrictions or adverse claims;
and the date the transfer was registered. Uncertificated Units are
Page 11
transferable through the same procedures applicable to Units evidenced
by certificates (described above), except that no certificate need be
presented to the Trustee and no certificate will be issued upon transfer
unless requested by the Unit holder. A Unit holder may at any time
request the Trustee to issue certificates for Units.
Although no such charge is now made or contemplated, a Unit holder may
be required to pay $2.00 to the Trustee per certificate reissued or
transferred, and to pay any governmental charge that may be imposed in
connection with each such transfer or exchange. For new certificates
issued to replace destroyed, stolen or lost certificates, the Unit
holder may be required to furnish indemnity satisfactory to the Trustee
and pay such expenses as the Trustee may incur. Mutilated certificates
must be surrendered to the Trustee for replacement.
How are Interest and Principal Distributed?
The pro rata share of cash in the Principal Account will be computed as
of the fifteenth day of each month and distributions to the Unit holders
as of such Record Date will be made as indicated in Part One for each
Trust. Proceeds from the disposition of any of the Securities or amounts
representing principal on the Securities received after such Record Date
and prior to the following Distribution Date will be held in the
Principal Account and not distributed until the next Distribution Date.
The Trustee is not required to pay interest on funds held in the
Principal or Interest Account (but may itself earn interest thereon and
therefore benefits from the use of such funds) nor to make a
distribution from the Principal Account unless the amount available for
distribution shall equal at least $1.00 per 1,000 Units (or $1.00 per
100 Units for Units with an Initial Public Offering Price of $10.00).
The Trustee will credit to the Interest Account all interest received by
a Trust, including moneys representing penalties for the failure to make
timely payments on Securities or liquidated damages for default or
breach of any condition or term of the Securities and that part of the
proceeds of any disposition of Securities which represents accrued
interest. Other receipts will be credited to the Principal Account.
Persons who purchase Units between a Record Date and a Distribution Date
will receive their first distribution on the second Distribution Date
after the purchase.
As of the fifteenth day of each month, the Trustee will deduct from the
Interest Account and, to the extent funds are not sufficient therein,
from the Principal Account, amounts necessary to pay the expenses of a
Trust. The Trustee also may withdraw from said accounts such amounts, if
any, as it deems necessary to establish a reserve for any governmental
charges payable out of a Trust. Amounts so withdrawn shall not be
considered a part of the assets of such Trust until such time as the
Trustee shall return all or any part of such amounts to the appropriate
account. In addition, the Trustee may withdraw from the Interest Account
and the Principal Account such amounts as may be necessary to cover
redemption of Units by the Trustee.
Record Dates for monthly distributions will be the fifteenth day of each
month. Distributions will be made as indicated in Part One for each
Trust. Distributions for an IRA, Keogh, pension fund or other tax-
deferred retirement plan will not be sent to the individual Unit holder;
these distributions will go directly to the custodian of the plan to
avoid the penalties associated with premature withdrawals from such
accounts.
What Reports Will Unit Holders Receive?
The Trustee shall furnish Unit holders in connection with each
distribution a statement of the amount of interest, if any, and the
amount of other receipts, if any, which are being distributed, expressed
in each case as a dollar amount per 1,000 Units (or 100 Units, for Units
with an Initial Public Offering Price of $10.00). Within a reasonable
time after the end of each calendar year, the Trustee will furnish to
each person who at any time during the calendar year was a Unit holder
of record, a statement as to (1) the Interest Account: interest received
(including amounts representing interest received upon any disposition
of Securities, penalties for the failure to make timely payments on
Securities or liquidated damages for default or breach of any condition
or term of the Securities), deductions for payment of applicable taxes
and for fees and expenses of a Trust, redemption of Units and the
balance remaining after such distributions and deductions, expressed
both as a total dollar amount and as a dollar amount representing the
Page 12
pro rata share per 1,000 Units (or 100 Units, for Units with an Initial
Public Offering Price of $10.00) outstanding on the last business day of
such calendar year; (2) the Principal Account: payments of principal on
Securities, the dates of disposition of any Securities and the net
proceeds received therefrom (excluding any portion representing
interest), deduction for payment of applicable taxes and for fees and
expenses of a Trust, redemptions of Units, and the balance remaining
after such distributions and deductions expressed both as a total dollar
amount and as a dollar amount per 1,000 Units (or 100 Units, for Units
with an Initial Public Offering Price of $10.00); (3) the Securities
held and the number of Units outstanding on the last business day of
such calendar year; (4) the Redemption Price per 1,000 Units (or 100
Units, for Units with an Initial Public Offering Price of $10.00) based
upon the last computation thereof made during such calendar year; (5)
the dollar amounts actually distributed during such calendar year from
the Interest Account and from the Principal Account, separately stated;
and (6) such other information as the Trustee may deem appropriate. Unit
holders of Units in uncertificated form shall receive no less frequently
than once each year a dated written statement containing the name,
address and taxpayer identification number, if any, of the registered
owner, the number of Units registered in the name of the registered
owner on the date of the statement and certain other information, that
will be provided as required under applicable law.
In order to comply with Federal and state tax reporting requirements,
Unit holders will be furnished, upon request to the Trustee, evaluations
of the Securities furnished to it by the Evaluator.
How May Units be Redeemed?
A Unit holder may redeem all or a portion of his Units by tender to the
Trustee at its corporate trust office in the City of New York of the
certificates representing the Units to be redeemed, or, in the case of
uncertificated Units, delivery of a request for redemption, duly
endorsed or accompanied by proper instruments of transfer with signature
guaranteed as explained above (or by providing satisfactory indemnity,
as in connection with lost, stolen or destroyed certificates), and
payment of applicable governmental charges, if any. No redemption fee
will be charged. On the third business day following such tender, the
Unit holder will be entitled to receive in cash an amount for each Unit
equal to the Redemption Price per Unit next computed after receipt by
the Trustee of such tender of Units. The "date of tender" is deemed to
be the date on which Units are received by the Trustee (if such day is a
day on which the New York Stock Exchange is open for trading), except
that as regards Units received after the close of trading on the New
York Stock Exchange (generally 4:00 p.m. Eastern time or as of any
earlier closing time on a day on which the New York Stock Exchange is
scheduled in advance to close at such earlier time), the date of tender
is the next day on which such Exchange is open for trading and such
Units will be deemed to have been tendered to the Trustee on such day
for redemption at the redemption price computed on that day. Units so
redeemed shall be canceled.
Purchased Interest (if any) and any other accrued interest to the
settlement date paid on redemption shall be withdrawn from the Interest
Account or, if the balance therein is insufficient, from the Principal
Account. All other amounts paid on redemption shall be withdrawn from
the Principal Account.
The Redemption Price per Unit will be determined on the basis of the bid
price of the Securities in a Trust and the amount of Purchased Interest
for Series 2 of the Trust. The Redemption Price per 1,000 Units (or 100
Units, for Units with an Initial Public Offering Price of $10.00) is the
pro rata share of each Unit determined by the Trustee on the basis of
(1) the cash on hand in such Trust or moneys in the process of being
collected, (2) the value of the Securities in a Trust based on the bid
prices of the Securities and (3) Purchased Interest for Series 2 of the
Trust and any other interest accrued thereon, less (a) amounts
representing taxes or other governmental charges payable out of a Trust
and (b) the accrued expenses of a Trust. The Evaluator may determine the
value of the Securities in a Trust (1) on the basis of current bid
prices of the Securities obtained from dealers or brokers who
customarily deal in securities comparable to those held by a Trust, (2)
on the basis of bid prices for securities comparable to any securities
for which bid prices are not available, (3) by determining the value of
the Securities by appraisal, or (4) by any combination of the above.
The difference between the bid and offering prices of such Securities
may be expected to average 1/16 to 1/4 of 1% of the principal amount of
such Securities. Therefore, the price at which Units may be redeemed
could be less than the price paid by the Unit holder.
Page 13
The Trustee is empowered to sell underlying Securities in order to make
funds available for redemption. To the extent that Securities are sold,
the size and diversity of a Trust will be reduced. Such sales may be
required at a time when Securities would not otherwise be sold and might
result in lower prices than might otherwise be realized.
The right of redemption may be suspended and payment postponed for any
period during which the New York Stock Exchange is closed, other than
for customary weekend and holiday closings, or during which the
Securities and Exchange Commission determines that trading on that
Exchange is restricted or an emergency exists, as a result of which
disposal or evaluation of the Securities is not reasonably practicable,
or for such other periods as the Securities and Exchange Commission may
by order permit. Under certain extreme circumstances, the Sponsor may
apply to the Securities and Exchange Commission for an order permitting
a full or partial suspension of the right of Unit holders to redeem
their Units. The Trustee is not liable to any person in any way for any
loss or damage which may result from any such suspension or postponement.
How May Units be Purchased by the Sponsor?
The Trustee shall notify the Sponsor of any tender of Units for
redemption. If the Sponsor's bid in the secondary market at that time
equals or exceeds the Redemption Price per Unit, which includes
Purchased Interest for Series 2 of the Trust, it may purchase such Units
by notifying the Trustee before the close of business on the second
succeeding business day and by making payment therefor to the Unit
holder not later than the day on which the Units would otherwise have
been redeemed by the Trustee. Units held by the Sponsor may be tendered
to the Trustee for redemption as any other Units.
The offering price of any Units acquired by the Sponsor will be in
accord with the Public Offering Price described in the then currently
effective prospectus describing such Units. Any profit or loss resulting
from the resale or redemption of such Units will belong to the Sponsor.
How May Securities be Removed from the Trusts?
The Sponsor is empowered, but not obligated, to direct the Trustee to
dispose of Securities in the event certain events occur that adversely
affect the value of Securities including default in payment of interest
or principal, default in payment of interest or principal of other
obligations guaranteed or backed by the full faith and credit of the
United States of America, institution of legal proceedings, default
under other documents adversely affecting debt service, decline in price
or the occurrence of other market or credit factors.
If any default in the payment of principal or interest on any Security
occurs and if the Sponsor fails to instruct the Trustee to sell or to
hold such Security within thirty days after notification by the Trustee
to the Sponsor of such default, the Trustee may, in its discretion, sell
the defaulted Security and not be liable for any depreciation or loss
thereby incurred. The Trustee may, from time to time, retain and pay
compensation to the Sponsor (or an affiliate of the Sponsor) to act as
agent for a Trust with respect to selling Securities from a Trust. In
acting in such capacity, the Sponsor or its affiliate will be held
subject to the restrictions under the Investment Company Act of 1940, as
amended.
The Trustee is also empowered to sell, for the purpose of redeeming
Units tendered by any Unit holder, and for the payment of expenses for
which funds may not be available, such of the Securities in a list
furnished by the Sponsor as the Trustee in its sole discretion may deem
necessary. The acquisition by a Trust of any securities other than the
Securities deposited during the primary offering period is prohibited.
INFORMATION AS TO SPONSOR, TRUSTEE AND EVALUATOR
Who is the Sponsor?
Nike Securities L.P., the Sponsor, specializes in the underwriting,
trading and distribution of unit investment trusts and other securities.
Nike Securities L.P., an Illinois limited partnership formed in 1991,
acts as Sponsor for successive series of The First Trust Combined
Series, The First Trust Special Situations Trust, The First Trust
Insured Corporate Trust, The First Trust of Insured Municipal Bonds, The
First Trust GNMA, Templeton Growth and Treasury Trust, Templeton Foreign
Fund & U.S. Treasury Securities Trust and The Advantage Growth and
Treasury Securities Trust. First Trust introduced the first insured unit
Page 14
investment trust in 1974 and to date more than $9 billion in First Trust
unit investments trusts have been deposited. The Sponsor's employees
include a team of professionals with many years of experience in the
unit investment trust industry. The Sponsor is a member of the National
Association of Securities Dealers, Inc. and Securities Investor
Protection Corporation and has its principal offices at 1001 Warrenville
Road, Lisle, Illinois 60532; telephone number (630) 241-4141. As of
December 31, 1996, the total partners' capital of Nike Securities L.P.
was $9,005,203 (audited). (This paragraph relates only to the Sponsor
and not to a Trust or to any series thereof or to any other Underwriter.
The information is included herein only for the purpose of informing
investors as to the financial responsibility of the Sponsor and its
ability to carry out its contractual obligations. More detailed
financial information will be made available by the Sponsor upon request.)
Who is the Trustee?
The Trustee is The Chase Manhattan Bank, with its principal executive
office located at 270 Park Avenue, New York, New York 10017 and its unit
investment trust office at 4 New York Plaza, 6th floor, New York, New
York 10004-2413. Unit holders who have questions regarding the Trusts
may call the Customer Service Help Line at 1-800-682-7520. The Trustee
is subject to supervision by the Superintendent of Banks of the State of
New York, the Federal Deposit Insurance Corporation and the Board of
Governors of the Federal Reserve System.
The Trustee, whose duties are ministerial in nature, has not
participated in the selection of the Securities. For information
relating to the responsibilities of the Trustee under the Indenture,
reference is made to the material set forth under "Rights of Unit
Holders."
The Trustee and any successor trustee may resign by executing an
instrument in writing and filing the same with the Sponsor and mailing a
copy of a notice of resignation to all Unit holders. Upon receipt of
such notice, the Sponsor is obligated to appoint a successor trustee
promptly. If the Trustee becomes incapable of acting or becomes bankrupt
or its affairs are taken over by public authorities, the Sponsor may
remove the Trustee and appoint a successor as provided in the Indenture.
If upon resignation of a trustee no successor has accepted the
appointment within 30 days after notification, the retiring trustee may
apply to a court of competent jurisdiction for the appointment of a
successor. The resignation or removal of a trustee becomes effective
only when the successor trustee accepts its appointment as such or when
a court of competent jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which it may
be consolidated, or any corporation resulting from any merger or
consolidation to which a Trustee shall be a party, shall be the
successor Trustee. The Trustee must be a banking corporation organized
under the laws of the United States or any State and having at all times
an aggregate capital, surplus and undivided profits of not less than
$5,000,000.
Limitations on Liabilities of Sponsor and Trustee
The Sponsor and Trustee shall be under no liability to Unit holders for
taking any action or for refraining from taking any action in good faith
pursuant to the Indenture, or for errors in judgment, but shall be
liable only for their own willful misfeasance, bad faith, gross
negligence (ordinary negligence in the case of the Trustee) or reckless
disregard of their obligations and duties. The Trustee shall not be
liable for depreciation or loss incurred by reason of the sale by the
Trustee of any of the Securities. In the event of the failure of the
Sponsor to act under the Indenture, the Trustee may act thereunder and
shall not be liable for any action taken by it in good faith under the
Indenture.
The Trustee shall not be liable for any taxes or other governmental
charges imposed upon or in respect of the Securities or upon the
interest thereon or upon it as Trustee under the Indenture or upon or in
respect of a Trust which the Trustee may be required to pay under any
present or future law of the United States of America or of any other
taxing authority having jurisdiction. In addition, the Indenture
contains other customary provisions limiting the liability of the Trustee.
If the Sponsor shall fail to perform any of its duties under the
Indenture or become incapable of acting or become bankrupt or its
affairs are taken over by public authorities, then the Trustee may (a)
appoint a successor Sponsor at rates of compensation deemed by the
Trustee to be reasonable and not exceeding amounts prescribed by the
Page 15
Securities and Exchange Commission, or (b) terminate the Indenture and
liquidate the Trust as provided herein, or (c) continue to act as
Trustee without terminating the Indenture.
Who is the Evaluator?
The Evaluator is Securities Evaluation Service, Inc., 531 East Roosevelt
Road, Suite 200, Wheaton, Illinois 60187. The Evaluator may resign or
may be removed by the Sponsor and the Trustee, in which event the
Sponsor and the Trustee are to use their best efforts to appoint a
satisfactory successor. Such resignation or removal shall become
effective upon the acceptance of appointment by the successor Evaluator.
If upon resignation of the Evaluator no successor has accepted
appointment within 30 days after notice of resignation, the Evaluator
may apply to a court of competent jurisdiction for the appointment of a
successor.
The Trustee, Sponsor and Unit holders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for the
accuracy thereof. Determinations by the Evaluator under the Indenture
shall be made in good faith upon the basis of the best information
available to it, provided, however, that the Evaluator shall be under no
liability to the Trustee, Sponsor or Unit holders for errors in
judgment. This provision shall not protect the Evaluator in any case of
willful misfeasance, bad faith, gross negligence or reckless disregard
of its obligations and duties.
OTHER INFORMATION
How May the Indenture be Amended or Terminated?
The Sponsor and the Trustee have the power to amend the Indenture
without the consent of any of the Unit holders when such amendment is
(1) to cure any ambiguity or to correct or supplement any provision of
the Indenture which may be defective or inconsistent with any other
provision contained therein, or (2) to make such other provisions as
shall not adversely affect the interest of the Unit holders (as
determined in good faith by the Sponsor and the Trustee), provided that
the Indenture is not amended to increase the number of Units issuable
thereunder or to permit the deposit or acquisition of securities either
in addition to or in substitution for any of the Securities initially
deposited in a Trust. In the event of any amendment, the Trustee is
obligated to notify promptly all Unit holders of the substance of such
amendment.
A Trust may be liquidated at any time by consent of 100% of the Unit
holders or by the Trustee when the principal amount of the Securities
owned by such Trust as shown by any evaluation, is less than the lower
of $1,000,000 or 10% of the total principal amount of the Securities
deposited in such Trust or in the event that Units not yet sold
aggregating more than 60% of the Units initially deposited are tendered
for redemption by the Sponsor. If a Trust is liquidated because of the
redemption of unsold Units by the Sponsor, the Sponsor will refund to
each purchaser of Units the entire sales charge paid by such purchaser.
The Indenture will terminate upon the redemption, sale or other
disposition of the last Security held thereunder. In the event of
termination, written notice thereof will be sent by the Trustee to all
Unit holders. Within a reasonable period after termination, the Trustee
will sell any Securities remaining in a Trust, and, after paying all
expenses and charges incurred by a Trust, will distribute to each Unit
holder (including the Sponsor if it then holds any Units), upon
surrender for cancellation of his Units, his pro rata share of the
balances remaining in the Interest and Principal Accounts, all as
provided in the Indenture.
Legal Opinions
The legality of the Units offered hereby has been passed upon by Chapman
and Cutler, 111 West Monroe Street, Chicago, Illinois 60603, as counsel
for the Sponsor. Carter, Ledyard & Milburn, 2 Wall Street, New York, New
York 10005, acts as counsel for the Trustee.
Experts
The statement of net assets, including the portfolio, of each Trust
contained in Part One of the Prospectus and Registration Statement has
been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon appearing elsewhere herein and in the Registration
Statement, and is included in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
Page 16
DESCRIPTION OF STANDARD & POOR'S RATING*
A Standard & Poor's rating on the units of an investment trust
(hereinafter referred to collectively as "units" and "trust") is a
current assessment of creditworthiness with respect to the investments
held by such trust. This assessment takes into consideration the
financial capacity of the issuers and of any guarantors, insurers,
lessees or mortgagors with respect to such investments. The assessment,
however, does not take into account the extent to which trust expenses
or portfolio asset sales for less than the trust's purchase price will
reduce payment to the Unit holder of the interest and principal required
to be paid on the portfolio assets. In addition, the rating is not a
recommendation to purchase, sell, or hold units, inasmuch as the rating
does not comment as to market price of the units or suitability for a
particular investor.
Trusts rated "AAA" are composed exclusively of assets that are rated
"AAA" by Standard & Poor's or, have, in the opinion of Standard &
Poor's, credit characteristics comparable to assets rated "AAA," or
certain short-term investments. Standard & Poor's defines its "AAA"
rating for such assets as the highest rating assigned by Standard &
Poor's to a debt obligation. Capacity to pay interest and repay
principal is very strong.
[FN]
_________________
* As described by Standard & Poor's.
Page 17
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Page 18
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Page 19
CONTENTS:
First Trust U.S. Treasury Securities Trust,
Short-Intermediate Series;
First Trust U.S. Treasury Securities Trust,
Short-Term Series
The First Trust Special Situations Trust:
What is the First Trust Special Situations Trust? 2
What is the Rating of the Units? 3
What are Estimated Current Return and
Estimated Long-Term Return? 4
How are Purchased Interest and Accrued
Interest Treated? 4
What are the Expenses and Charges? 5
What is the Tax Status of Unit Holders? 6
Why are Investments in a Trust
Suitable for Retirement Plans? 10
How Can Distributions to Unit Holders
be Reinvested? 10
Public Offering:
How is the Public Offering Price Determined? 10
How are Units Distributed? 11
What are the Profits of the Sponsor? 11
Rights of Unit Holders:
How is Evidence of Ownership Issued
and Transferred? 11
How are Interest and Principal Distributed? 12
What Reports Will Unit Holders Receive? 12
How May Units be Redeemed? 13
How May Units be Purchased by the Sponsor? 14
How May Securities be Removed from the Trusts? 14
Information as to Sponsor, Trustee and Evaluator:
Who is the Sponsor? 14
Who is the Trustee? 15
Limitations on Liabilities of Sponsor and Trustee 15
Who is the Evaluator? 16
Other Information:
How May the Indenture be Amended or
Terminated? 16
Legal Opinions 16
Experts 16
Description of Standard & Poor's Rating 17
__________
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION
OF AN OFFER TO BUY, SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM
IT IS NOT LAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION.
THIS PROSPECTUS DOES NOT CONTAIN ALL THE INFORMATION SET FORTH IN THE
REGISTRATION STATEMENTS AND EXHIBITS RELATING THERETO, WHICH THE FUND
HAS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WASHINGTON, D.C.
UNDER THE SECURITIES ACT OF 1933 AND THE INVESTMENT COMPANY ACT OF 1940,
AND TO WHICH REFERENCE IS HEREBY MADE.
FIRST TRUST (registered trademark)
First Trust U.S. Treasury Securities Trust,
Short-Intermediate Series;
First Trust U.S. Treasury Securities Trust,
Short-Term Series
The First Trust Special
Situations Trust
Prospectus
Part Two
March 31, 1997
First Trust (registered trademark)
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-630-241-4141
Trustee:
The Chase Manhattan Bank
4 New York Plaza, 6th floor
New York, New York 10004-2413
1-800-682-7520
THIS PART TWO MUST BE
ACCOMPANIED BY PART ONE
PLEASE RETAIN THIS PROSPECTUS
FOR FUTURE REFERENCE
Page 20
CONTENTS OF POST-EFFECTIVE AMENDMENT
OF REGISTRATION STATEMENT
This Post-Effective Amendment of Registration Statement
comprises the following papers and documents:
The facing sheet
The prospectus
The signatures
The Consent of Independent Auditors
Financial Data Schedule
S-1
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES
113 FIRST TRUST U.S. TREASURY SECURITIES TRUST, SHORT-TERM SERIES
5 AND FIRST TRUST U.S. TREASURY SECURITIES TRUST, SHORT-
INTERMEDIATE SERIES 6, certifies that it meets all of the
requirements for effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has
duly caused this Post-Effective Amendment of its Registration
Statement to be signed on its behalf by the undersigned thereunto
duly authorized in the Village of Lisle and State of Illinois on
April 30, 1997.
THE FIRST TRUST SPECIAL SITUATIONS TRUST,
SERIES 113
FIRST TRUST U.S. TREASURY SECURITIES TRUST,
SHORT-TERM SERIES 5 AND FIRST TRUST U.S.
TREASURY SECURITIES TRUST, SHORT-
INTERMEDIATE SERIES 6
(Registrant)
By NIKE SECURITIES L.P.
(Depositor)
By Robert M. Porcellino
Vice President
Pursuant to the requirements of the Securities Act of 1933,
this Post-Effective Amendment of Registration Statement has been
signed below by the following person in the capacity and on the
date indicated:
Signature Title Date
Robert D. Van Kampen Sole Director of )
Nike Securities )
Corporation, ) April 30, 1997
the General Partner )
of Nike Securities L.P. )
)
) Robert M. Porcellino
) Attorney-in-Fact**
*The title of the person named herein represents his capacity in
and relationship to Nike Securities L.P., Depositor.
**An executed copy of the related power of attorney was filed
with the Securities and Exchange Commission in connection
with the Amendment No. 1 to Form S-6 of The First Trust
Combined Series 258 (File No. 33-63483) and the same is
hereby incorporated herein by this reference.
S-2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption
"Experts" and to the use of our report dated March 28, 1997 in
this Post-Effective Amendment to the Registration Statement and
related Prospectus of The First Trust Special Situations Trust
dated April 25, 1997.
ERNST & YOUNG LLP
Chicago, Illinois
April 24, 1997
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from
Post Effective Amendment to form S-6 and is qualified in its entirety
by reference to such Post Effective Amendment to form S-6.
</LEGEND>
<SERIES>
<NUMBER> 005
<NAME> U.S. TREASURY SECURITIES SHORT-TERM TRUST
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 6,948,679
<INVESTMENTS-AT-VALUE> 6,880,825
<RECEIVABLES> 230,070
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 7,110,895
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 175,273
<TOTAL-LIABILITIES> 175,273
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 6,948,679
<SHARES-COMMON-STOCK> 11,248,469
<SHARES-COMMON-PRIOR> 13,801,823
<ACCUMULATED-NII-CURRENT> 54,797
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (67,854)
<NET-ASSETS> 6,935,622
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 673,322
<OTHER-INCOME> 0
<EXPENSES-NET> 27,641
<NET-INVESTMENT-INCOME> 645,681
<REALIZED-GAINS-CURRENT> 50,119
<APPREC-INCREASE-CURRENT> (251,345)
<NET-CHANGE-FROM-OPS> 444,455
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 655,811
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 5,250,650
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 2,553,354
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (7,233,588)
<ACCUMULATED-NII-PRIOR> 25,960
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from
Post Effective Amendment to form S-6 and is qualified in its entirety
by reference to such Post Effective Amendment to form S-6.
</LEGEND>
<SERIES>
<NUMBER> 006
<NAME> U.S. TREASURY SECURITIES SHORT-INTERMEDIATE TRUST
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 12,392,887
<INVESTMENTS-AT-VALUE> 12,372,493
<RECEIVABLES> 293,164
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 12,665,657
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 248,475
<TOTAL-LIABILITIES> 248,475
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 12,392,887
<SHARES-COMMON-STOCK> 12,027,652
<SHARES-COMMON-PRIOR> 13,200,000
<ACCUMULATED-NII-CURRENT> 44,689
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (20,394)
<NET-ASSETS> 12,417,182
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 893,719
<OTHER-INCOME> 0
<EXPENSES-NET> 25,894
<NET-INVESTMENT-INCOME> 867,825
<REALIZED-GAINS-CURRENT> 1,074
<APPREC-INCREASE-CURRENT> (405,158)
<NET-CHANGE-FROM-OPS> 463,741
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 866,841
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 1,172,348
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (1,616,196)
<ACCUMULATED-NII-PRIOR> 50,433
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
