AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 9, 1994
REGISTRATION NO. 33-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------------
FORM S-6
------------------------------------------
FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
------------------------------------------
A. EXACT NAME OF TRUST:
DEFINED ASSET FUNDS
FLORIDA INSURED SERIES
B. NAMES OF DEPOSITORS:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
SMITH BARNEY INC.
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
DEAN WITTER REYNOLDS INC.
C. COMPLETE ADDRESSES OF DEPOSITORS' PRINCIPAL EXECUTIVE OFFICES:
MERRILL LYNCH, PIERCE, FENNER & SMITH SMITH BARNEY INC.
INCORPORATED TWO WORLD TRADE CENTER--101ST FLOOR
P.O. BOX 9051 NEW YORK, N.Y. 10048
PRINCETON, N.J. 08543-9051
PAINEWEBBER INCORPORATED PRUDENTIAL SECURITIES DEAN WITTER REYNOLDS INC.
1285 AVENUE OF THE INCORPORATED TWO WORLD TRADE
AMERICAS ONE SEAPORT PLAZA CENTER--59TH FLOOR
NEW YORK, N.Y. 10019 199 WATER STREET NEW YORK, N.Y. 10048
NEW YORK, N.Y. 10292
D. NAMES AND COMPLETE ADDRESSES OF AGENTS FOR SERVICE:
TERESA KONCICK, ESQ. LEE B. SPENCER, JR. THOMAS D. HARMAN, ESQ.
P.O. BOX 9051 ONE SEAPORT PLAZA 388 GREENWICH STREET
PRINCETON, N.J. 8543-9051 199 WATER STREET NEW YORK, NY 10013
NEW YORK, N.Y. 10292
COPIES TO:
ROBERT E. HOLLEY DOUGLAS LOWE, ESQ. PIERRE DE SAINT PHALLE,
1200 HARBOR BLVD. 130 LIBERTY STREET--29TH ESQ.
WEEHAWKEN, N.J. 07087 FLOOR 450 LEXINGTON AVENUE
NEW YORK, N.Y. 10019 NEW YORK, N.Y. 10017
E. TITLE AND AMOUNT OF SECURITIES BEING REGISTERED:
An indefinite number of Units of Beneficial Interest pursuant to Rule 24f-2
promulgated under the Investment Company Act of 1940, as amended.
F. PROPOSED MAXIMUM OFFERING PRICE TO THE PUBLIC OF THE SECURITIES BEING
REGISTERED: Indefinite
G. AMOUNT OF FILING FEE: $500 (as required by Rule 24f-2)
H. APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC:
As soon as practicable after the effective date of the registration statement.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
DEFINED ASSET FUNDS
FLORIDA INSURED SERIES
CROSS REFERENCE SHEET
Pursuant to Rule 404(c) of Regulation C under the Securities Act of 1933 (Form
N-8B-2 Items Required by Instruction 1 as to Prospectus on Form S-6)
Form N-8B-2 Item Number Form S-6 Heading in Prospectus
- ----------------------------------------------------------------------------
I. Organization and General Information
1. (a) Name of Trust..................Part A - Front Cover
(b) Title of securities issued.....Part A - Statement of Condition
2. Name and address of Depositor......Part A - Back Cover
3. Name and address of Trustee........Part A - Back Cover
4. Name and address of principal
underwriter........................Part A - Back Cover
5. Organization of trust..............Part B - Trust Indenture
6. Execution and termination of Trust
Indenture and Agreement..........Part A - Defined Portfolio and
Defining Your Investment
Part B - Risk Factors--Fund
Termination
7. Changes of Name....................*
8. Fiscal year........................*
9. Material Litigation................*
II. General Description of the Trust and Securities of the Trust
10. General information regarding
trust's securities.................Part A - Selling Your Investment
Defining Your Income
Part B - Fund Description - Bond
Portfolio
Supervision
How To Buy Units - Certificates
How To Sell Units
Income, Distributions and
Reinvestment
Records and Reports
Trust Indenture
11. Types of securities comprising
units..............................Part A - Investment Objective
Types of Bonds
AAA-Rated and Insured
Part B - Fund Description - Bond
Portfolio
Selection
Risk Factors
12. Certain information regarding
periodic payment certificates....*
13. (a) Load, fees, expenses, etc......Part A - Defining Your Investment
Defining Your Costs
Back Cover
Part B - How to Buy Units - Public
Offering Price
Income, Distributions and
Reinvestment
(b) Certain information regarding
periodic payment certificates....*
(c) Certain percentages............Part A - Defining Your Costs
Part B - How To Buy Units - Public
Offering Price
Income, Distributions and
Reinvestment
Appendix B
(d) Price to affiliates............Part B - How To Buy Units - Public
Offering Price
(e) Other expenses and fees........*
(f) Certain profits receivable by
the depositor, principal
underwriter, trustee or affiliated
persons Part A - Defining Your Investment
Part B - Income, Distributions and
(g) Ratio of annual charges to
income.............................*
14. Issuance of trust's securities.....Part A - Low Minimum Investment
Defining Your Investment
Defining Your Costs
Part B - How To Buy Units
15. Receipt and handling of payments
from purchasers....................Part B - How To Buy Units
16. Acquisition and disposition of
underlying securities Part A - Professional Selection -
Supervision
Part B - Fund Description
<PAGE>
17. Withdrawal or redemption...........Part A - Selling Your Investment
Back Cover
Part B - How To Sell Units
18. (a) Receipt and disposition of
income.............................Part A - Principal Distributions
Defining Your Income
Part B - Income, Distributions and
Reinvestment
(b) Reinvestment of
distributions......................Part B - Income, Distributions and
Reinvestment
(c) Reserves or special funds......Part B - Income, Distributions and
Reinvestment
(d) Schedule of distributions......*
19. Records, accounts and reports......Part B - Records and Reports
20. (a) Amendments.....................Part B - Trust Indenture
(b) Extension or Termination.......Part A - Defining Your Investment -
Termination
Part B - Trust Indenture
(c) and (d) Removal or Resignation
of Trustee.........................Part B - Trust Indenture
(e) and (f) Removal or Resignation
of Sponsor.........................Part B - Trust Indenture
21. Loans to security holders..........*
22. Limitations on liability...........Part B - Trust Indenture
23. Bonding arrangements...............*
24. Other material provisions of Trust
Indenture Agreement..............*
III. Organization, Personnel and Affiliated Persons of Depositor
25. Organization of Depositor..........Part B - Miscellaneous - Sponsors
26. Fees received by Depositor.........Part A - Defining Your Investment -
Sponsors' Profit
(Loss) on Deposit
27. Business of Depositor..............Part B - Miscellaneous - Sponsors
28. Certain information as to officials
and affiliated persons of
Depositor........................Part II - A.II
29. Voting securities of Depositor.....Part B - Miscellaneous - Sponsors
30. Person controlling Depositor.......*
31. Payments by depositor for certain
services render to trust.........*
32. Remuneration of directors of
Depositor for certain services
rendered to trust..................*
33. Remuneration of directors of
Depositor for certain services
rendered to trust..................*
34. Remuneration of other persons for
certain services rendered to
trust............................*
IV. Distribution and Redemption of Securities
35. Distribution of trust's securities
by States..........................Part B - Miscellaneous - Public
Distribution
36. Suspension of sales of trust's
securities.........................*
37. Revocation of authority to
distribute.........................*
38. (a) Method of distribution.........Part A - Back Cover - Underwriting
Account
Part B - How To Buy Units
Miscellaneous - Public Distribution
(b) Underwriting agreements........Part A - Back Cover
Part B - Miscellaneous - Public
Distribution
(c) Selling agreements.............Part B - How To Buy Units
Miscellaneous - Public Distribution
Appendix B
39. (a) Organization of principal
underwriter........................Part B - Miscellaneous - Sponsors
(b) N.A.S.D. membership by
principal underwriter..............Part B - Miscellaneous - Sponsors
40. Certain fees received by principal
underwriter........................*
41. (a) Business of principal
underwriter........................*
(b) Branch offices of principal
underwriter........................*
(c) Salesmen of principal
underwriter........................*
42. Ownership of trust's securities by
certain persons....................*
43. Certain brokerage commissions
received by principal
underwriter......................*
44. (a) Method of valuation............Part A - Defining Your Investment -
Public Offering
Price
Part B - How To Buy Units
(b) Schedule as to offering
price..............................Part A - Defining Your Investment -
Public Offering
(c) Variation in offering price....Part B - How to Buy Units - Public
Offering Price
Appendix B
45. Suspension of redemption rights....*
<PAGE>
46. (a) Redemption valuation...........Part B - How to Sell Units
How to Buy Units - Evaluations
(b) Schedule as to redemption
price..............................*
47. Maintenance of position in
underlying securities..............Part A - Back Cover - Underwriting
Account
V. Information Concerning the Trustee or Custodian
48. Organization and regulation of
Trustee............................Part A - Back Cover
Part B - Miscellaneous - Trustee
49. Fees and expenses of Trustee.......Part A - Defining Your Costs
Part B - Income, Distributions and
Reinvestment
50. Trustee's Lien.....................Part B - Income, Distributions and
Reinvestment
VI. Information Concerning Insurance of Holders
51. Insurance of Holders...............*
VII. Policy of Registrant
52. Method of Selection of
Securities.........................Part B - Fund Description - Bond
Portfolio Selection
Fund Description - Bond Portfolio
Supervision
53. Regulated Investment Company.......Part B - Taxes
VIII. Financial and Statistical Information
54. Information on Outstanding
Securities.........................*
55. Issuers of Periodic Payment
Plans..............................*
59. Financial Statements (Instruction
1(b) to Form S-6) Part A - Report of Independent
Public Accountants,
Statement of Condition, Defined
Portfolio
- ------------------------------------
* Inapplicable, omitted, answer negative or not required.
<PAGE>
DEFINED ASSET FUNDSSM
- --------------------------------------------------------------------------------
FLORIDA INSURED X.XX% ESTIMATED CURRENT RETURN shows the estimated
SERIES annual cash to be received from interest-bearing
(A UNIT INVESTMENT bonds in the Portfolio (net of estimated annual
TRUST) expenses) divided by the Public Offering Price
- ------------------------------(including the maximum sales charge).
/ / DESIGNED FOR X.XX% ESTIMATED LONG TERM RETURN is a measure of
TAX-FREE INCOME the estimated return over the estimated life of
/ / DEFINED PORTFOLIO OF the Fund. This represents an average of the yields
INSURED MUNICIPAL BONDS to maturity (or in certain cases, to an earlier
/ / MONTHLY INCOME call date) of the individual bonds in the
/ / AAA-RATED Portfolio, adjusted to reflect the maximum sales
X.XX% charge and estimated expenses. The average yield
ESTIMATED CURRENT RETURN for the Portfolio is derived by weighting each
AS OF DECEMBER , 1994 bond's yield by its market value and the time
X.XX% remaining to the call or maturity date, depending
ESTIMATED LONG TERM RETURN on how the bond is priced. Unlike Estimated
AS OF DECEMBER , 1994 Current Return, Estimated Long Term Return takes
into account maturities, discounts and premiums of
the underlying bonds.
Each figure varies with purchase price (including
sales charges), changes in Portfolio composition,
changes in interest income and changes in fees and
expenses. These figures may not be directly
comparable to yield figures used to measure other
investments, and since they are based on various
assumptions and variables, your actual return may
be higher or lower.
No return estimate can be predictive of your
actual return because it will depend on many
factors, including the value of the underlying
bonds when you purchase and sell Units and how
long you hold the Units. Therefore, Estimated
Current Return and Estimated Long Term Return are
designed to be comparative rather than predictive.
A yield calculation which is more comparable to an
individual bond may be higher or lower than
Estimated Current Return or Estimated Long Term
Return which are more comparable to return
calculations used by other investment products.
-------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE
SPONSORS: COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
Merrill Lynch, Pierce, Fenner HAS THE COMMISSION OR ANY STATE SECURITIES
& COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
Smith Incorporated OF THIS DOCUMENT. ANY REPRESENTATION TO THE
Smith Barney Inc. CONTRARY IS A CRIMINAL OFFENSE.
PaineWebber Incorporated Inquiries should be directed to the Trustee at
Prudential Securities 1-800-323-1508.
Incorporated Prospectus Part A dated December , 1994.
Dean Witter Reynolds Inc. READ AND RETAIN DOCUMENT FOR FUTURE REFERENCE.
<PAGE>
- --------------------------------------------------------------------------------
Def ined Asset FundsSM
Defined Asset Funds is America's oldest and largest family of unit investment
trusts, with over $90 billion sponsored since 1970. Each Defined Asset Fund is a
portfolio of preselected securities. The portfolio is divided into 'units'
representing equal shares of the underlying assets. Each unit receives an equal
share of income and principal distributions.
Defined Asset Funds offer several defined 'distinctives'. You know in advance
what you are investing in and that changes in the portfolio are limited - a
defined portfolio. Most defined bond funds pay interest monthly - defined
income.
Your financial professional can help you select a Defined Asset Fund to meet
your personal investment objectives. Our size and market presence enable us to
offer a wide variety of investments. The Defined Asset Funds family offers:
o Municipal portfolios
o Corporate portfolios
o Government portfolios
o Equity portfolios
o International portfolios
Termination dates are as short as one year or as long as 30 years. Special funds
are available including: insured funds, double and triple tax-free funds and
funds with 'laddered maturities' to help protect against changing interest
rates. Defined Asset Funds are offered by prospectus only.
DEFINED FLORIDA INSURED SERIES
Our defined portfolio of municipal bonds offers investors a simple and
convenient way to earn tax-free monthly income. And by purchasing Defined Asset
Funds, investors not only receive professional selection but also gain the
advantage of reduced risk by investing in insured bonds of several different
issuers.
INVESTMENT OBJECTIVE
To provide interest income exempt from regular federal income taxes and certain
state and local taxes in the state of Florida through investment in a fixed
portfolio consisting primarily of insured long-term bonds issued by or on behalf
of the State of Florida and its local governments.
DIVERSIFICATION
The Portfolio is diversified among (xx) bond issues. Spreading your investment
among different securities and issuers reduces your risk, but does not eliminate
it. Because of maturities, sales or other dispositions of bonds, the size,
composition and return of the Portfolio will change over time.
- ----------------------------------------------------------------
Defining Your Portfolio
- ----------------------------------------------------------------
PROFESSIONAL SELECTION AND SUPERVISION
The Fund contains a variety of securities selected by experienced buyers and
research analysts. The Fund is not actively managed. However, the Portfolio is
regularly reviewed and a security can be sold if retaining it is considered
detrimental to investors' interests.
TYPES OF BONDS
The Portfolio consists of municipal revenue bonds which are payable from the
income generated by a specific project or authority:
SOURCE OF REVENUE
/ / Hospitals/Health Care Facilities xx%
/ / Housing xx%
/ / Industrial Development Revenue xx%
/ / Lease Rental Appropriation xx%
/ / State/Local Municipal Utilities xx%
/ / Colleges/Universities xx%
AAA-RATED AND INSURED
The bonds included in the Portfolio are insured. This insurance guarantees the
timely payment of principal and interest of the bonds, but does not guarantee
the value of the bonds or the Fund units. As a result of the insurance the units
of the Fund are AAA-rated by Standard & Poor's Ratings Group. Insurance does not
cover accelerated payments of principal or any increase in interest payments or
premiums payable on mandatory redemptions, including if interest on a bond is
determined to be taxable. The percentage of the aggregate face amount insured by
each insurance company is as follows:
INSURANCE COMPANY PORTFOLIO PERCENTAGE
Name of Insurance Company] xx%
BOND CALL FEATURES
It is possible that during periods of falling interest rates, a bond with a
coupon higher than current market rates will be prepaid or 'called', at the
option of the bond issuer, before its expected maturity. When bonds are
initially callable, the price is usually at a premium to par which then declines
to par over time. Bonds may also be subject to a mandatory sinking fund or have
extraordinary redemption provisions. For example, if the bond's proceeds are not
able to be used as intended the bond may be redeemed. This redemption and the
sinking fund are often at par.
CALL PROTECTION
Although each of the bonds is subject to optional refunding or call provisions,
we have selected bonds with call protection. This call protection means that any
bond in the Portfolio generally cannot be called for a number of years and
thereafter at a declining premium over par.
2
<PAGE>
NO UP-FRONT SALES CHARGE
The Fund does not have an up-front sales charge when initially offered. Units
sold in the first five years of the Fund are subject to a combination of a
periodic deferred sales charge of $2.75 per unit payable quarterly from
distributions through about the fifth anniversary of the Fund and a contingent
deferred sales charge initially of $25.00 per unit declining to zero after the
fourth year of the Fund. Units sold after the first year of the Fund will also
be subject to an up-front sales charge. If you hold your units for the first
five years of the Fund, your total sales charge will be $55. This sales charge
will be paid from interest on $55 of Bonds reserved for that purpose and the
periodic sale of the Bonds. Any principal remaining after the first five year
period will remain in the Fund. Interest on the reserved Bonds accrues to you
and is not included in the Fund's return figures.
PRINCIPAL DISTRIBUTIONS
Principal from sales, redemptions and maturities of bonds in the Fund not needed
to pay the deferred sales charge will be distributed to investors periodically
when the amount to be distributed is more than $5.00 per unit.
LOW MINIMUM INVESTMENT
You can get started with a minimum purchase of $1,000.
REINVESTMENT OPTION
You can elect to automatically reinvest your distributions into a separate
portfolio of federally tax-exempt bonds. Reinvesting helps to compound your
income tax-free.
TAX INFORMATION
Based on the opinion of bond counsel, income from the bonds held by this Fund is
generally 100% exempt under existing laws from regular federal income tax and
from certain state and local personal income taxes. Any gain on a disposition of
the underlying bonds or units will be subject to tax.
- ----------------------------------------------------------------
Defining Your Risks
- ----------------------------------------------------------------
RISK FACTORS
Unit price fluctuates and could be adversely affected by increasing interest
rates as well as the financial condition of the issuers of the bonds and any
insurance companies backing the bonds. Because of the possible maturity, sale or
other disposition of securities, the size, composition and return of the
portfolio may change at any time. Unit prices could also be adversely affected
if a limited trading market exists in any security to be sold. There is
therefore no guarantee that the Fund will achieve its investment objective.
The Fund is considered to be concentrated in and bonds and housing bonds
and is therefore dependent to a significant degree on revenues generated from
those particular activities. In addition, the Fund is concentrated in Bonds of
Florida issuers and is subject to additional risk from decreased diversification
as well as factors that may be particular to Florida, including dependence on
tourism, agriculture and the construction industry and political, economic and
social issues that arise from Flroida's proximity to Central and South America.
(See Risk Factors in Part B).
SELLING YOUR INVESTMENT
You may sell your units at any time. Your price is based on the Fund's then
current net asset value as determined by an independent evaluator (based on the
offer side evaluation of the bonds during the initial public offering period and
the lower, bid side evaluation thereafter). If you sell your units before the
fourth anniversary of the Fund, you will pay a contingent deferred sales charge
initially of $25 per unit which is reduced each year. Because of the sales
charges, returns of principal and fluctuations in unit price, among other
reasons, the sale price will generally be less than the cost of your units.
<TABLE><CAPTION>
- --------------------------------------------------------------------------------
TAX-FREE VS. TAXABLE INCOME
A Comparison Of Taxable and Tax-Free Yields For Florida Residents
- ---------------------------------------------------------------------------------------------------------------------------
EFFECTIVE
TAXABLE INCOME 1994* % TAX TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN BRACKET 3% 3.5% 4% 4.5% 5% 5.5%
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 22,100 $ 0- 36,900 15.00 3.53 4.12 4.71 5.29 5.88 6.47
$ 22,100- 53,500 $ 36,900- 89,150 28.00 4.17 4.86 5.56 6.25 6.94 7.64
$ 53,500-115,000 $ 89,150-140,000 31.00 4.35 5.07 5.80 6.52 7.25 7.97
$ 115,000-250,000 $ 140,000-250,000 36.00 4.69 5.47 6.25 7.03 7.81 8.59
OVER $250,000 OVER $250,000 39.60 4.97 5.79 6.62 7.45 8.28 9.11
<CAPTION>
TAXABLE INCOME 1994*
SINGLE RETURN 6% 6.5% 7%
<S> <C> <C> <C>
$ 0- 22,100 7.06 7.65 8.24
$ 22,100- 53,500 8.33 9.03 9.72
$ 53,500-115,000 8.70 9.42 10.14
$ 115,000-250,000 9.38 10.16 10.94
OVER $250,000 9.93 10.76 11.59
</TABLE>
To compare the yield of a taxable security with the yield of a tax-free
security, find your taxable income and read across. The table incorporates
current federal income tax rates and assumes that all income would otherwise be
taxed at the investor's highest tax rate. Yield figures are for example only.
*Based upon net amount subject to federal income tax after deductions and
exemptions. This table does not reflect the possible effect of other tax
factors, such as alternative minimum tax, personal exemptions, the phase out of
the tax benefit of exemptions, itemized deductions or the possible partial
disallowance of deductions. Consequently, holders are urged to consult their own
tax advisers in this regard.
3
<PAGE>
- --------------------------------------------------------------------------------
DEFINED PORTFOLIO
- --------------------------------------------------------------------------------
Florida Insured Series On the Initial Date of Deposit December , 1994
<TABLE><CAPTION>
OPTIONAL SINKING
RATING REFUNDING FUND COST
PORTFOLIO TITLE OF ISSUES (1) REDEMPTIONS (2) REDEMPTIONS (2) TO FUND (3)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
[Face Amount, Title of Bond,
Coupon, Maturity & Name of
Insurance Company] $
-----------------
$
-----------------
-----------------
</TABLE>
- ------------------------------------
(1) All ratings are by Standard & Poor's Ratings Group. (See Appendix A to
Prospectus Part B.)
(2) Bonds are first subject to optional redemptions (which may be exercised in
whole or in part) on the dates and at the prices indicated under the Optional
Refunding Redemptions column. In subsequent years, bonds are redeemable at
declining prices, but typically not below par value. Some issues may be subject
to sinking fund redemption or extraordinary redemption with premium prior to the
dates shown.
(3) Evaluation of the bonds by the Evaluator is made on the basis of current
offer side evaluation.
(4) It is anticipated that the interest on $ ] face amount of this bond
will be applied to the payment of the Fund's deferred sales charge and,
therefore, this amount has not been included in the Fund's calculation of
Estimated Current Return and Estimated Long Term Return.
4
<PAGE>
- ------------------------------------------------------------------
Defining Your Investment
- ------------------------------------------------------------------
As of December , 1994, the business day prior to the Initial Date of Deposit.
PUBLIC OFFERING PRICE PER UNIT $1,000.00
The Public Offering Price during the initial offering period is based on the
aggregate offer side value of the underlying bonds in the Fund ($ ), the
price at which they can be directly purchased by the public assuming they were
available, plus cash ($ ), divided by the number of units outstanding
( ). The Public Offering Price on the initial date of deposit, and
subsequent dates will vary. An amount equal to net accrued but undistributed
interest on the unit is added to the Public Offering Price for sales made after
the initial date of deposit.
EVALUATION TIME 3:30 p.m. Eastern Time
FACE AMOUNT OF THE BONDS: $ xx
NUMBER OF UNITS: xx
REDEMPTION PRICE/SECONDARY MARKET
REPURCHASE PRICE:
(Based on bid side evaluation and
deducting the currently payable
contingent deferred sales charge) $ xx.xx/unit
(plus
accrued
interest)
($ less than the Public Offering Price)
PREMIUM AND DISCOUNT ISSUES IN THE PORTFOLIO
(Based on the offer side face amount evaluation)
Over Par: xx%
At Par: xx%
At a Discount From Par: xx%
SPONSORS' PROFIT (LOSS) ON DEPOSIT: $xx,xxx.xx
TERMINATION DATE
The Fund will generally terminate following the maturity date of the last
maturing bond listed in the Portfolio. The Fund may be terminated if the value
is less than 40% of the face amount of bonds deposited.
- ----------------------------------------------------------------
Defining Your Income
- ----------------------------------------------------------------
MONTHLY FEDERALLY TAX-FREE INTEREST INCOME
The Fund pays monthly income, even though the bonds generally pay interest
semi-annually.
WHAT YOU MAY EXPECT
(PAYABLE ON THE 25TH DAY OF (MONTH, 1995) TO HOLDERS OF RECORD ON THE 10TH DAY
OF (MONTH, 1995):
First Distribution: $ xx.xx
Regular Monthly Income
(Beginning on (date)): $ xx.xx
Annual Income: $ xx.xx
Actual payments may vary.
Estimated cash flows are available upon request from the Sponsors.
- ----------------------------------------------------------------
Defining Your Costs
- ----------------------------------------------------------------
TRANSACTION EXPENSES
This Fund has no up-front sales charge when initially offered. However, the
maximum sales charges that may be levied over time is 5.5% or $55 per $1,000
invested. This is collected annually at 1.1% per year for 5 years. After the
fifth year, no periodic deferred sales charge will be deducted from the Fund.
As a Percentage
of Initial Public Amount per
Offering Price $1,000 Invested
------------------- ---------------
Maximum Sales Charges 5.5% $ 55.00
ESTIMATED ANNUAL FUND OPERATING EXPENSES
Trustee's Fee x% $ xx.xx
Maximum Portfolio Supervision,
Bookkeeping and Administrative
Fees x% $ xx.xx
Evaluator's Fee x% $ xx.xx
Other Operating Expenses x% $ xx.xx
------------------- ---------------
TOTAL XX% $ XX.XX
Although the Fund is a unit investment trust rather than mutual fund, this
information is presented to permit a comparison of fees and an understanding of
the direct or indirect costs and expenses that you pay.
COSTS OVER TIME
You would pay the following cumulative expenses on a $1,000 investment, assuming
a 5% annual return on the investment throughout the indicated periods and
redemption at the end of the period:
1 Year 3 Years 5 Years 10 Years
$xx $xx $xx $xx
No redemption at the end of the period:
1 Year 3 Years 5 Years 10 Years
$xx $xx $xx $xx
The example assumes reinvestment of all distributions into additional units of
the Fund (a reinvestment option different from that offered by this Fund) and
uses a 5% annual rate of return as mandated by Securities and Exchange
Commission regulations applicable to mutual funds. The Costs Over Time above
reflect both sales charges and operating expenses on an increasing investment
(because the net annual return is reinvested). In addition to the charges above,
when you sell or redeem units in the secondary market (before the Fund
terminates) you will receive a price based on the then-current bid side
evaluation of the underlying securities. The example should not be considered a
representation of past or future expenses or annual rate of return; the actual
expenses and annual rate of return may be more or less than the example.
5
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsors, Trustee and Holders of Defined Asset Funds, Florida Insured Series
(the 'Fund'):
We have audited the accompanying statement of condition and the related
portfolio included in the prospectus of the Fund as of the date hereof. This
financial statement is the responsibility of the Trustee. Our responsibility is
to express an opinion on this financial statement based on our audit.
We conducted our audit 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 statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. Our procedures included
confirmation of the irrevocable letters of credit deposited for the purchase of
securities, as described in the statement of condition, with the Trustee. An
audit also includes assessing the accounting principles used and significant
estimates made by the Trustee, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the financial position of the Fund as of the date hereof
in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, N.Y.
December , 1994
STATEMENT OF CONDITION AS OF INITIAL DATE OF DEPOSIT, DECEMBER , 1994
TRUST PROPERTY
Investments:
Contracts to purchase Bonds(1) $ xxxxxx.xx
Cash xxxxx.xx
Accrued interest to Initial Date of Deposit on underlying
Bonds xxxxx.xx
--------------------
Total $ xxxxxx.xx
--------------------
--------------------
LIABILITY AND INTEREST OF HOLDERS
Liability--Advance by Trustee for accrued interest(2) $ xxxxx.xx
Interest of Holders of xxxx Units of fractional undivided
interest outstanding(3):
Cost to investors(4) xxxxx.xx
--------------------
Total $ xxxxxx.xx
--------------------
--------------------
- ---------------
(1) AGGREGATE COST TO THE FUND OF THE BONDS LISTED UNDER DEFINED
PORTFOLIO IS BASED UPON THE OFFER SIDE EVALUATION DETERMINED BY THE EVALUATOR AT
THE EVALUATION TIME ON THE BUSINESS DAY PRIOR TO THE INITIAL DATE OF DEPOSIT.
THE CONTRACTS TO PURCHASE THE BONDS ARE COLLATERALIZED BY IRREVOCABLE LETTERS OF
CREDIT WHICH HAVE BEEN ISSUED BY (NAME OF ISSUER) IN THE AMOUNT OF $XXXXXXX.XX
AND DEPOSITED WITH THE TRUSTEE. THE AMOUNT OF LETTERS OF CREDIT INCLUDES
$XXXXXX.XX FOR THE PURCHASE OF $XXXXXX.XX FACE AMOUNT OF THE BONDS, PLUS
$XXXXXX.XX FOR ACCRUED INTEREST.
(2) REPRESENTING A SPECIAL DISTRIBUTION BY THE TRUSTEE OF AN AMOUNT
EQUAL TO THE ACCRUED INTEREST ON THE BONDS AS OF THE INITIAL DATE OF DEPOSIT.
(3) BECAUSE THE VALUE OF BONDS BASED ON THE EVALUATION TIME ON THE
INITIAL DATE OF DEPOSIT MAY DIFFER FROM THE AMOUNTS SHOWN IN THIS STATEMENT OF
CONDITION, THE UNITS OFFERED ON THE INITIAL DATE OF DEPOSIT WILL BE ADJUSTED
FROM THE INITIAL NUMBER OF UNITS TO MAINTAIN THE INITIAL $1,000.00 PER UNIT
OFFERING PRICE.
(4) AGGREGATE PUBLIC OFFERING PRICE (EXCLUSIVE OF ACCRUED INTEREST)
COMPUTED ON THE BASIS OF THE OFFER SIDE EVALUATION OF THE UNDERLYING BONDS AS OF
THE EVALUATION TIME ON THE BUSINESS DAY PRIOR TO THE INITIAL DATE OF DEPOSIT.
(5) A DEFERRED SALES CHARGE OF $2.75 PER UNIT WILL BE PAID QUARTERLY BY
THE TRUSTEE ON BEHALF OF THE INVESTORS UP TO AN AGGREGATE OF $55.00 PER UNIT
OVER A FIVE YEAR PERIOD. SHOULD AN INVESTOR REDEEM UNITS PRIOR TO THE END OF THE
FOURTH ANNIVERSARY OF THE FUND, A CONTINGENT DEFERRED SALES CHARGE (INITIALLY
$25.00 PER UNIT) WILL BE DEDUCTED FROM REDEMPTION PROCEEDS AND PAID TO THE
SPONSORS.
6
<PAGE>
UNDERWRITING ACCOUNT
None of the Sponsors have participated as sole underwriter, managing underwriter
or member of an underwriting syndicate from which any of the bonds in the
Portfolio were acquired.
SPONSORS
MERRILL LYNCH, PIERCE, FENNER & SMITH, INCORPORATED
P.O. Box 9051,
Princeton, NJ 08543-9051 xx%
SMITH BARNEY INC.
Two World Trade Center, 101st Floor,
New York, NY 10048 xx%
PAINEWEBBER INCORPORATED
1285 Avenue of the Americas,
New York, NY 10019 xx%
PRUDENTIAL SECURITIES INCORPORATED
One Seaport Plaza--199 Water Street,
New York, NY 10292 xx%
DEAN WITTER REYNOLDS INC.
Two World Trade Center--59th Floor,
New York, NY 10048 xx%
OTHER UNDERWRITERS xx%
----
100%
----
------------------
DEFINED ASSET FUND
FLORIDA INSURED SERIES
I want to learn more about automatic
reinvestment in the Investment
Accumulation Program. Please send me
information about participation in the
Municipal Accumulation
Program, Inc. and a current Prospectus.
- -------------------------------------
NAME
- -------------------------------------
ADDRESS
- -------------------------------------
CITY
- -------------------------------------
STATE ZIP
- -------------------------------------
PHONE
- -------------------------------------
This card is a self mailer.
Please remove along perforation and mail.
<PAGE>
EVALUATOR:
Kenny S&P Evaluation Services
65 Broadway, New York, NY 10019
TRUSTEE:
The Chase Manhattan Bank, N.A.
(a National Banking Association)
Unit Trust Department
Box 2051
New York, NY 10048
Units of this Fund may no longer be available and therefore information
contained herein may be subject to amendment. A registration statement relating
to securities of a future series has been filed with the Securities and Exchange
Commission. These securities may not be sold nor may offers to buy be accepted
prior to the time the registration statement becomes effective. This document
shall not constitute an offer to sell or the solicitation of an offer to buy nor
shall there be any sale of these securities in any State in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such State.
For more complete information about the Fund, including additional information
on charges and expenses, please call or write for Part B of the Prospectus. Read
both Parts A and B before you invest or send money.
<PAGE>
BUSINESS REPLY MAIL NO POSTAGE
FIRST CLASS PERMIT NO. 644 NEW YORK, NY NECESSARY
IF MAILED
POSTAGE WILL BE PAID BY ADDRESSEE IN THE
THE CHASE MANHATTAN BANK, N.A. UNITED STATES
UNIT TRUST DEPARTMENT
BOX 2051
NEW YORK, NY 10081
<PAGE>
DEFINED ASSET FUNDSSM
PROSPECTUS--PART B
MUNICIPAL SERIES
THIS PART B OF THE PROSPECTUS MAY NOT BE DISTRIBUTED UNLESS ACCOMPANIED OR
PRECEDED BY PART A.
FURTHER DETAIL REGARDING ANY OF THE INFORMATION PROVIDED IN THE PROSPECTUS MAY
BE OBTAINED
WITHIN FIVE DAYS OF WRITTEN OR TELEPHONIC REQUEST TO THE TRUSTEE, THE ADDRESS
AND
TELEPHONE NUMBER OF WHICH ARE SET FORTH ON THE BACK COVER OF PART A OF THIS
PROSPECTUS.
Index
PAGE
---------
Fund Description...................................... 1
Risk Factors.......................................... 2
How to Buy Units...................................... 6
How to Sell Units..................................... 7
Income, Distributions and Reinvestment................ 8
Fund Expenses......................................... 9
Fund Performance...................................... 9
Taxes................................................. 10
PAGE
---------
Records and Reports................................... 11
Trust Indenture....................................... 11
Miscellaneous......................................... 12
Supplemental Information.............................. 13
Appendix A--Description of Ratings.................... a-1
Appendix B--Sales Charge Schedules.................... b-1
Appendix C--Florida Disclosure........................ c-1
FUND DESCRIPTION
DEFINED ASSET FUNDS
Defined Asset Funds is the oldest and largest family of unit investment
trusts. For decades informed investors have purchased unit investment trusts for
dependability and professional selection of investments. Defined Asset Funds
offers an array of simple and convenient investment choices, suited to fit a
wide variety of personal financial goals--a buy and hold strategy for capital
accumulation, such as for children's education or retirement, or attractive,
regular current income consistent with the preservation of principal. Unit
investment trusts are particularly suited for the many investors who prefer to
seek long-term income by purchasing sound investments and holding them, rather
than through active trading. Few individuals have the knowledge, resources or
capital to buy and hold a diversified portfolio on their own; it would generally
take a considerable sum of money to obtain the breadth and diversity that
Defined Asset Funds offer. One's investment objectives may call for a
combination of Defined Asset Funds.
BOND PORTFOLIO SELECTION
Professional buyers and research analysts for Defined Asset Funds selected
the Bonds for the Portfolio after considering the Fund's investment objective as
well as the quality of the Bonds (all Bonds in the Portfolio are initially rated
in the category A or better by at least one nationally recognized rating
organization or have comparable credit characteristics), the yield and price of
the Bonds compared to similar securities, the maturities of the Bonds and the
diversification of the Portfolio. No leverage or borrowing is used nor does the
Portfolio contain other kinds of securities to enhance yield. A summary of the
Bonds in the Portfolio appears under Defined Portfolio in Part A of the
Prospectus.
Yields on bonds depend on many factors including general conditions of the
bond markets, the size of a particular offering and the maturity and quality
rating of the particular issues. Yields can vary among bonds with similar
maturities, coupons and ratings. Ratings represent opinions of the rating
organizations as to the quality of the bonds rated, based on the credit of the
issuer or any guarantor, insurer or other credit provider, but these ratings are
general standards of quality (see Appendix A).
The Sponsors and the Trustee are not liable for any default or defect in a
Bond. If a contract to purchase any Bond fails, the Sponsors may generally
deposit a replacement bond so long as it is a tax-exempt bond, has a fixed
maturity or disposition date substantially similar to the failed Bond and is
rated A or better by at least one
1
<PAGE>
nationally recognized rating organization or has comparable credit
characteristics. A replacement bond must be deposited within 110 days after
deposit of the failed contract, at a cost that does not exceed the funds
reserved for purchasing the failed Bond and at a yield to maturity and
current return substantially equivalent (considering then current market
conditions and relative creditworthiness) to those of the failed Bond, as of
the date the failed contract was deposited.
Because each Defined Asset Fund is a preselected portfolio of bonds,
purchasers know the securities, maturities, call dates and ratings before they
invest. Of course, the Portfolio will change somewhat over time, as Bonds
mature, are redeemed or are sold to meet Unit redemptions or in other limited
circumstances.
BOND PORTFOLIO SUPERVISION
The Fund follows a buy and hold investment strategy in contrast to the
frequent portfolio changes of a managed fund based on economic, financial and
market analyses. The Fund may retain an issuer's bonds despite adverse financial
developments. Experienced financial analysts regularly review the Portfolio and
a Bond may be sold in certain circumstances including the occurrence of a
default in payment or other default on the Bond, a decline in the projected
income pledged for debt service on a revenue bond, institution of certain legal
proceedings, if the Bond becomes taxable or is otherwise inconsistent with the
Fund's investment objectives, a decline in the price of the Bond or the
occurrence of other market or credit factors (including advance refunding) that,
in the opinion of Defined Asset Funds research analysts, makes retention of the
Bond detrimental to the interests of investors. The Trustee must generally
reject any offer by an issuer of a Bond to exchange another security pursuant to
a refunding or refinancing plan.
RISK FACTORS
An investment in the Fund entails certain risks, including the risk that
the value of your investment will decline with increases in interest rates.
Generally speaking, bonds with longer maturities will fluctuate in value more
than bonds with shorter maturities. In recent years there have been wide
fluctuations in interest rates and in the value of fixed-rate bonds generally.
The Sponsors cannot predict the direction or scope of any future fluctuations.
Certain of the Bonds may have been deposited at a market discount or
premium principally because their interest rates are lower or higher than
prevailing rates on comparable debt securities. The current returns of market
discount bonds are lower than comparably rated bonds selling at par because
discount bonds tend to increase in market value as they approach maturity. The
current returns of market premium bonds are higher than comparably rated bonds
selling at par because premium bonds tend to decrease in market value as they
approach maturity. Because part of the purchase price is returned through
current income payments and not at maturity, an early redemption at par of a
premium bond will result in a reduction in yield to the Fund. Market premium or
discount attributable to interest rate changes does not indicate market
confidence or lack of confidence in the issue.
The Fund generally is 'at risk' for Bonds purchased on a when-issued or
delayed delivery basis because the purchase price is determined prior to
purchase and either a gain or loss may result from fluctuations in the value of
the Bonds from the date the price is determined. Additionally, if the value of
the bonds reserved for payment of the periodic deferred sales charge, together
with the interest thereon, were to become insufficient to pay these charges,
additional bonds would be required to be sold.
The Fund may be concentrated in one or more of types of Bonds.
Concentration in a State may involve additional risk because of the decreased
diversification of economic, political, financial and market risks. Set forth
below is a brief description of certain risks associated with bonds which may be
held by the Fund. Additional information is contained in the Information
Supplement which is available from the Trustee at no charge to the investor.
GENERAL OBLIGATION BONDS
Certain of the Bonds may be general obligations of a governmental entity.
General obligation bonds are backed by the issuer's pledge of its full faith,
credit and taxing power for the payment of principal and interest. However, the
taxing power of any governmental entity may be limited by provisions of state
constitutions or laws and its credit will depend on many factors, including an
erosion of the tax base resulting from population declines, natural disasters,
declines in the state's industrial base or an inability to attract new
industries, economic limits on the ability to tax without eroding the tax base
and the extent to which the entity relies on federal or state
2
<PAGE>
aid, access to capital markets or other factors beyond the entity's control.
In addition, political restrictions on the ability to tax and budgetary
constraints affecting state governmental aid may have an adverse impact on the
creditworthiness of cities, counties, school districts and other local
governmental units.
As a result of the recent recession's adverse impact upon both revenues and
expenditures, as well as other factors, many state and local governments have
confronted deficits which were the most severe in recent years. Many issuers are
facing highly difficult choices about significant tax increases and spending
reductions in order to restore budgetary balance. The failure to implement these
actions on a timely basis could force these issuers to issue additional debt to
finance deficits or cash flow needs and could lead to a reduction of their bond
ratings and the value of their outstanding bonds.
MORAL OBLIGATION BONDS
The Portfolio may include 'moral obligation' bonds. If an issuer of moral
obligation bonds is unable to meet its obligations, the repayment of the bonds
becomes a moral commitment but not a legal obligation of the state or local
government in question. Even though the state or local government may be called
on to restore any deficits in capital reserve funds of the agencies or
authorities which issued the bonds, any restoration generally requires
appropriation by the state or local legislature and does not constitute a
legally enforceable obligation or debt of the state or local government. The
agencies or authorities generally have no taxing power.
REFUNDED BONDS
Refunded Bonds are typically secured by direct obligations of the U.S.
Government or in some cases obligations guaranteed by the U.S. Government placed
in an escrow account maintained by an independent trustee until maturity or a
predetermined redemption date. These obligations are generally noncallable prior
to maturity or the predetermined redemption date. In a few isolated instances,
however, bonds which were thought to be escrowed to maturity have been called
for redemption prior to maturity.
MUNICIPAL REVENUE BONDS
Municipal revenue bonds are tax-exempt securities issued by states,
municipalities, public authorities or similar entities to finance the cost of
acquiring, constructing or improving various projects. Municipal revenue bonds
are not general obligations of governmental entities backed by their taxing
power and payment is generally solely dependent upon the creditworthiness of the
public issuer or the financed project or state appropriations. Examples of
municipal revenue bonds are:
Municipal utility bonds, including electrical, water and sewer revenue
bonds, whose payments are dependent on various factors, including the rates
the utilities may charge, the demand for their services and their operating
costs, including expenses to comply with environmental legislation and
other energy and licensing laws and regulations. Utilities are particularly
sensitive to, among other things, the effects of inflation on operating and
construction costs, the unpredictability of future usage requirements, the
costs and availability of fuel and, with certain electric utilities, the
risks associated with the nuclear industry;
Lease rental bonds which are generally issued by governmental financing
authorities with no direct taxing power for the purchase of equipment or
construction of buildings that will be used by a state or local government.
Lease rental bonds are generally subject to an annual risk that the lessee
government might not appropriate funds for the leasing rental payments to
service the bonds and may also be subject to the risk that rental
obligations may terminate in the event of damage to or destruction or
condemnation of the equipment or building;
Multi-family housing revenue bonds and single family mortgage revenue
bonds which are issued to provide financing for various housing projects
and which are payable primarily from the revenues derived from mortgage
loans to housing projects for low to moderate income families or notes
secured by mortgages on residences; repayment of this type of bonds is
therefore dependent upon, among other things, occupancy levels, rental
income, the rate of default on underlying mortgage loans, the ability of
mortgage insurers to pay claims, the continued availability of federal,
state or local housing subsidy programs, economic conditions in local
markets, construction costs, taxes, utility costs and other operating
expenses and the managerial ability of project managers. Housing bonds are
generally prepayable at any time and therefore their average life will
ordinarily be less than their stated maturities;
Hospital and health care facility bonds whose payments are dependent
upon revenues of hospitals and other health care facilities. These revenues
come from private third-party payors and government programs,
3
<PAGE>
including the Medicare and Medicaid programs, which have generally
undertaken cost containment measures to limit payments to health care
facilities. Hospitals and health care facilities are subject to various
legal claims by patients and others and are adversely affected by
increasing costs of insurance;
Airport, port, highway and transit authority revenue bonds which are
dependent for payment on revenues from the financed projects, including
user fees from ports and airports, tolls on turnpikes and bridges, rents
from buildings, transit fare revenues and additional financial resources
including federal and state subsidies, lease rentals paid by state or local
governments or a pledge of a special tax such as a sales tax or a property
tax. In the case of the air travel industry, airport income is largely
affected by the airlines' ability to meet their obligations under use
agreements which in turn is affected by increased competition among
airlines, excess capacity and increased fuel costs, among other factors.
Solid waste disposal bonds which are generally payable from dumping and
user fees and from revenues that may be earned by the facility on the sale
of electrical energy generated in the combustion of waste products and
which are therefore dependent upon the ability of municipalities to fully
utilize the facilities, sufficient supply of
waste for disposal, economic or population growth, the level of
construction and maintenance costs, the existence of lower-cost alternative
modes of waste processing and increasing environmental regulation. A recent
decision of the U.S. Supreme Court limiting a municipality's ability to
require use of its facilities may have an adverse affect on the credit
quality of various issues of these bonds;
Special tax bonds which are not secured by general tax revenues but are
only payable from and secured by the revenues derived by a municipality
from a particular tax--for example, a tax on the rental of a hotel room, on
the purchase of food and beverages, on the rental of automobiles or on the
consumption of liquor and may therefore be adversely affected by a
reduction in revenues resulting from a decline in the local economy or
population or a decline in the consumption, use or cost of the goods and
services that are subject to taxation;
University and college bonds, the payments on which are dependent upon
various factors, including the size and diversity of their sources of
revenues, enrollment, reputation, the availability of endowments and other
funds and, in the case of public institutions, the financial condition of
the relevant state or other governmental entity and its policies with
respect to education; and
Tax increment and tax allocation bonds, which are secured by ad valorem
taxes imposed on the incremental increase of taxable assessed valuation of
property within a jurisdiction above an established base of assessed value.
The issuers of these bonds do not have general taxing authority and the tax
assessments on which the taxes used to service the bonds are based may be
subject to devaluation due to market price declines or governmental action.
Puerto Rico. Certain Bonds may be affected by general economic conditions
in the Commonwealth of Puerto Rico. Puerto Rico's economy is largely dependent
for its development on federal programs and current federal budgetary policies
suggest that an expansion of its programs is unlikely. Reductions in federal tax
benefits or incentives or curtailment of spending programs could adversely
affect the Puerto Rican economy.
Industrial Development Revenue Bonds. Industrial development revenue bonds
are municipal obligations issued to finance various privately operated projects
including pollution control and manufacturing facilities. Payment is generally
solely dependent upon the creditworthiness of the corporate operator of the
project and, in certain cases, an affiliated or third party guarantor and may be
affected by economic factors relating to the particular industry as well as
varying degrees of governmental regulation. In many cases industrial revenue
bonds do not have the benefit of covenants which would prevent the corporations
from engaging in capital restructurings or borrowing transactions which could
reduce their ability to meet their obligations and result in a reduction in the
value of the Portfolio.
BONDS BACKED BY LETTERS OF CREDIT OR INSURANCE
Certain Bonds may be secured by letters of credit issued by commercial
banks or savings banks, savings and loan associations and similar thrift
institutions or are direct obligations of banks or thrifts. The letter of credit
may be drawn upon, and the Bonds redeemed, if an issuer fails to pay amounts due
on the Bonds or, in certain cases, if the interest on the Bond becomes taxable.
Letters of credit are irrevocable obligations of the issuing institutions. The
profitability of a financial institution is largely dependent upon the credit
quality of its loan portfolio which, in turn, is affected by the institution's
underwriting criteria, concentrations within the portfolio and specific industry
and general economic conditions. The operating performance of financial
institutions is also
4
<PAGE>
impacted by changes in interest rates, the availability and cost of funds, the
intensity of competition and the degree of governmental regulation.
Certain Bonds may be insured or guaranteed by insurance companies listed
below. The claims-paying ability of each of these companies, unless otherwise
indicated, was rated AAA by Standard & Poor's or another nationally recognized
rating organization at the time the insured Bonds were purchased by the Fund.
The ratings are subject to change at any time at the discretion of the rating
agencies. In the event that the rating of an Insured Fund is reduced, the
Sponsors are authorized to direct the Trustee to obtain other insurance on
behalf of the Fund. The insurance policies guarantee the timely payment of
principal and interest on the Bonds but do not guarantee their market value or
the value of the Units. The insurance policies generally do not provide for
accelerated payments of principal or cover redemptions resulting from events of
taxability.
The following summary information relating to the listed insurance
companies has been obtained from publicly available information:
<TABLE><CAPTION>
FINANCIAL INFORMATION
AS OF DECEMBER 31, 1993
(IN MILLIONS OF DOLLARS)
-------------------------------------
POLICY HOLDER
NAME DATE ESTABLISHED ADMITTED ASSETS SURPLUS
- ----------------------------------------------------- ----------------- --------------- --------------------
<S> <C> <C> <C>
AMBAC Indemnity Corporation.......................... 1970 $ 1,956 $ 737
Asset Guaranty Insurance Co. (AA by S&P)............. 1988 138 73
Capital Guaranty Insurance Company................... 1986 285 168
Capital Markets Assurance Corp....................... 1987 182 146
Connie Lee Insurance Company......................... 1987 182 105
Financial Guaranty Insurance Company................. 1984 1,947 777
Financial Security Assurance Inc..................... 1984 748 357
Municipal Bond Investors Assurance Corporation....... 1986 3,051 978
</TABLE>
Insurance companies are subject to extensive regulation and supervision
where they do business by state insurance commissioners who regulate the
standards of solvency which must be maintained, the nature of and limitations on
investments, reports of financial condition, and requirements regarding reserves
for unearned premiums, losses and other matters. A significant portion of the
assets of insurance companies are required by law to be held in reserve against
potential claims on policies and is not available to general creditors. Although
the federal government does not regulate the business of insurance, federal
initiatives including pension regulation, controls on medical care costs,
minimum standards for no-fault automobile insurance, national health insurance,
tax law changes affecting life insurance companies and repeal of the antitrust
exemption for the insurance business can significantly impact the insurance
business.
STATE RISK FACTORS
Investment in a single State Trust, as opposed to a Fund which invests in
the obligations of several states, may involve some additional risk due to the
decreased diversification of economic, political, financial and market risks. A
brief description of the factors which may affect the financial condition of the
applicable State for any State Trust, together with a summary of tax
considerations relating to that State, appear in Appendix C to this Part B and
further information is contained in the Information Supplement.
LITIGATION AND LEGISLATION
The Sponsors do not know of any pending litigation as of the Initial Date
of Deposit which might reasonably be expected to have a material adverse effect
upon the Fund. At any time after the Initial Date of Deposit, litigation may be
initiated on a variety of grounds, or legislation may be enacted, affecting the
Bonds in the Fund. Litigation, for example, challenging the issuance of
pollution control revenue bonds under environmental protection statutes may
affect the validity of certain Bonds or the tax-free nature of their interest.
While the outcome of litigation of this nature can never be entirely predicted,
opinions of bond counsel are delivered on the date of issuance of each Bond to
the effect that it has been validly issued and that the interest thereon is
exempt from federal income tax. Also, certain proposals, in the form of state
legislative proposals or voter initiatives, seeking to limit real property taxes
have been introduced in various states, and an amendment to the constitution of
the State of California, providing for strict limitations on real property
taxes, has had a significant impact on the taxing powers of local governments
and on the financial condition of school districts and local governments in
5
<PAGE>
California. In addition, other factors may arise from time to time which
potentially may impair the ability of issuers to make payments due on the Bonds.
Under the Federal Bankruptcy Code, for example, municipal bond issuers, as well
as any underlying corporate obligors or guarantors, may proceed to restructure
or otherwise alter the terms of their obligations.
From time to time Congress considers proposals to prospectively and
retroactively tax the interest on state and local obligations, such as the
Bonds. The Supreme Court clarified in South Carolina v. Baker (decided on April
20, 1988) that the U.S. Constitution does not prohibit Congress from passing a
nondiscriminatory tax on interest on state and local obligations. This type of
legislation, if enacted into law, could require investors to pay income tax on
interest from the Bonds and could adversely affect an investment in Units. See
Taxes.
PAYMENT OF THE BONDS AND LIFE OF THE FUND
The size and composition of the Portfolio will change over time. Most of
the Bonds are subject to redemption prior to their stated maturity dates
pursuant to optional refunding or sinking fund redemption provisions or
otherwise. In general, optional refunding redemption provisions are more likely
to be exercised when the value of a Bond is at a premium over par than when it
is at a discount from par. Some Bonds may be subject to sinking fund and
extraordinary redemption provisions which may commence early in the life of the
Fund. Additionally, the size and composition of the Fund will be affected by the
level of redemptions of Units that may occur from time to time. Principally,this
will depend upon the number of investors seeking to sell or redeem their Units
and whether or not the Sponsors are able to sell the Units acquired by them in
the secondary market. Factors that the Sponsors will consider in determining
whether or not to sell Units acquired in the secondary market include the
diversity of the Portfolio, the size of the Fund relative to its original size,
the ratio of Fund expenses to income, the Fund's current and long-term returns,
the degree to which Units may be selling at a premium over par and the cost of
maintaining a current prospectus for the Fund. These factors may also lead the
Sponsors to seek to terminate the Fund earlier than its mandatory termination
date.
FUND TERMINATION
The Fund will be terminated no later than the mandatory termination date
specified under Defining Your Investment in Part A of the Prospectus. It will
terminate earlier upon the disposition of the last Bond or upon the consent of
investors holding 51% of the Units. The Fund may also be terminated earlier by
the Sponsors once the total assets of the Fund have fallen below the minimum
value specified under Defining Your Investment in Part A of the Prospectus. A
decision by the Sponsors to terminate the Fund early will be based on factors
similar to those considered by the Sponsors in determining whether to continue
the sale of Units in the secondary market.
Notice of impending termination will be provided to investors and
thereafter units will no longer be redeemable. On or shortly before termination,
the Fund will seek to dispose of any Bonds remaining in the Portfolio although
any Bond unable to be sold at a reasonable price may continue to be held by the
Trustee in a liquidating trust pending its final disposition. A proportional
share of the expenses associated with termination, including brokerage costs in
disposing of Bonds, will be borne by investors remaining at that time. This may
have the effect of reducing the amount of proceeds those investors are to
receive in any final distribution.
LIQUIDITY
Up to 40% of the value of the Portfolio may be attributable to guarantees
or similar security provided by corporate entities. These guarantees or other
security may constitute restricted securities that cannot be sold publicly by
the Trustee without registration under the Securities Act of 1933, as amended.
The Sponsors nevertheless believe that, should a sale of the Bonds guaranteed or
secured be necessary in order to meet redemption of Units, the Trustee should be
able to consummate a sale with institutional investors.
The principal trading market for the Bonds will generally be in the
over-the-counter market and the existence of a liquid trading market for the
Bonds may depend on whether dealers will make a market in them. There can be no
assurance that a liquid trading market will exist for any of the Bonds,
especially since the Fund may be restricted under the Investment Company Act of
1940 from selling Bonds to any Sponsor. The value of the Portfolio will be
adversely affected if trading markets for the Bonds are limited or absent.
HOW TO BUY UNITS
Units are available from any of the Sponsors, Underwriters and other
broker-dealers at the Public Offering Price plus accrued interest on the Units
and (after the Fund's first anniversary) an up-front sales charge at time of
6
<PAGE>
purchase. The Public Offering Price varies each Business Day with changes in the
value of the Portfolio and other assets and liabilities of the Fund. To allow
Units to be priced at $1,000, the Units outstanding as of the Evaluation Time on
the Initial Date of Deposit (all of which are held by the Sponsors) will be
split (or split in reverse).
PUBLIC OFFERING PRICE
In the initial offering period, the Public Offering Price (and the Initial
Repurchase Price) is based on the higher, offer side evaluation of the Bonds at
the next Evaluation Time after the order is received. In the secondary market
(after the initial offering period), the Public Offering Price (and the
Sponsors' Repurchase Price and the Redemption Price) is based on the lower, bid
side evaluation of the Bonds. In the past, the bid prices of publicly offered
tax-exempt issues have been lower than the offer prices by as much as 3 1/2% or
more of face amount in the case of inactively traded issues and as little as
1/2 of 1% in the case of actively traded issues, but the difference between the
offer and bid prices has averaged between 1 and 2% of face amount.
Investors will be subject to differing types and amounts of sales charge
depending upon the timing of their purchases and redemptions of Units. A
periodic deferred sales charge in the amount of $2.75 per Unit will be payable
quarterly through about the fifth anniversary of the Fund from a portion of the
interest on and principal of Bonds reserved for that purpose. Commencing on the
first anniversary of the Fund, the Public Offering Price will also include
an up-front sales charge applied to the value of the Bonds in the Portfolio.
Lastly, investors redeeming their Units prior to the fourth anniversary of the
Fund will be charged a contingent deferred sales charge payable out of the
redemption proceeds of their Units. A complete schedule of sales charges payable
during the first two years of the Fund appears in Appendix B. The Sponsors have
received an opinion of their counsel that the deferred sales charge described in
this Prospectus is consistent with an exemptive order received from the SEC.
Because accrued interest on the Bonds is not received by the Fund at a
constant rate throughout the year, any monthly income distribution may be more
or less than the interest actually received by the Fund. To eliminate
fluctuations in the monthly income distribution, a portion of the Public
Offering Price consists of an advance to the Trustee of an amount necessary to
provide approximately equal distributions. Upon the sale or redemption of Units,
investors will receive their proportionate share of the Trustee advance. In
addition, if a Bond is sold, redeemed or otherwise disposed of, the Fund will
periodically distribute the portion of the Trustee advance that is attributable
to the Bond to investors.
The regular monthly income distribution stated under Defining Your Income
in Part A of the Prospectus is based on the financial data on the business day
prior to the Initial Date of Deposit, after deducting estimated Fund expenses,
and will change as the composition of the Portfolio changes over time.
EVALUATIONS
Evaluations are determined by the independent Evaluator on each Business
Day. This excludes Saturdays, Sundays and the following holidays as observed by
the New York Stock Exchange: New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas. Bond
evaluations are based on closing sales prices (unless the Evaluator deems these
prices inappropriate). If closing sales prices are not available, the evaluation
is generally determined on the basis of current bid or offer prices for the
Bonds or comparable securities or by appraisal or by any combination of these
methods. Neither the Sponsors, the Trustee or the Evaluator will be liable for
errors in the Evaluator's judgment. The fees of the Evaluator will be borne by
the Fund.
CERTIFICATES
Certificates for Units are issued upon request and may be transferred by
paying any taxes or governmental charges and by complying with the requirements
for redeeming Certificates (see Redemption). Certain Sponsors collect additional
charges for registering and shipping Certificates to purchasers. Lost or
mutilated Certificates can be replaced upon delivery of satisfactory indemnity
and payment of costs.
HOW TO SELL UNITS
SPONSORS' MARKET FOR UNITS
You can sell your Units at any time without a fee. The Sponsors (although
not obligated to do so) will normally buy any Units offered for sale at the
repurchase price next computed after receipt of the order. Primarily
7
<PAGE>
because of the sales charge and fluctuations in the market value of the Bonds,
the sale price may be less than the cost of your Units. You should consult your
financial professional for current market prices to determine if other
broker-dealers or banks are offering higher prices for Units.
The Sponsors may discontinue this market without prior notice if the supply
of Units exceeds demand or for other business reasons; in that event, the
Sponsors may still purchase Units at the redemption price as a service to
Holders. The Sponsors may reoffer or redeem Units repurchased.
TRUSTEE'S REDEMPTION OF UNITS
You may redeem your Units by sending the Trustee a redemption request
together with any certificates you hold. Certificates must be properly endorsed
or accompanied by a written transfer instrument with signatures guaranteed by an
eligible institution. In certain instances, additional documents may be required
such as a certificate of death, trust instrument, certificate of corporate
authority or appointment as executor, administrator or guardian. If the Sponsors
are maintaining a market for Units, they will purchase any Units tendered at the
price described above. If they do not purchase Units tendered, the Trustee is
authorized in its discretion to sell Units in the over-the-counter market if it
believes it will obtain a higher net price for the redeeming Holder.
By the seventh calendar day after tender you will be mailed an amount equal
to the Redemption Price per Unit. Because of market movements or changes in the
Portfolio, this price may be more or less than the cost of your Units. The
Redemption Price per Unit is computed each Business Day by adding the bid side
value of the Bonds, net accrued interest, cash and the value of any other Fund
assets; deducting unpaid taxes or other governmental charges, accrued but unpaid
Fund expenses, unreimbursed Trustee advances, cash held to redeem Units or for
distribution to investors and the value of any other Fund liabilities; and
dividing the result by the number of outstanding Units.
If cash is not available in the Fund's Income and Capital Accounts to pay
redemptions, the Trustee may sell Bonds selected by the Agent for the Sponsors
based on market and credit factors determined to be in the best interest of the
Fund. These sales are often made at times when the Bonds would not otherwise be
sold and may result in lower prices than might be realized otherwise and will
also reduce the size and diversity of the Fund.
Redemptions may be suspended or payment postponed if the New York Stock
Exchange is closed other than for customary weekend and holiday closings, if the
SEC determines that trading on that Exchange is restricted or that an emergency
exists making disposal or evaluation of the Bonds not reasonably practicable, or
for any other period permitted by the SEC.
INCOME, DISTRIBUTIONS AND REINVESTMENT
INCOME
Some of the Bonds may have been purchased on a when-issued basis or may
have a delayed delivery. Since interest on these Bonds does not begin to accrue
until the date of their delivery to the Fund, the Trustee's annual fee and
expenses may be reduced to provide tax-exempt income to investors for this
non-accrual period. If a when-issued Bond is not delivered until later than
expected and the amount of the Trustee's annual fee and expenses is insufficient
to cover the additional accrued interest, the Sponsors will treat the contracts
as failed Bonds. The Trustee is compensated for its fee reduction by drawing on
the letter of credit deposited by the Sponsors before the settlement date for
these Bonds and depositing the proceeds in a non-interest bearing account for
the Fund.
Interest received is credited to an Income Account and other receipts to a
Capital Account. A Reserve Account may be created by withdrawing from the Income
and Capital Accounts amounts considered appropriate by the Trustee to reserve
for any material amount that may be payable out of the Fund.
DISTRIBUTIONS
Each Unit receives an equal share of monthly distributions of interest
income net of estimated expenses. Interest on the Bonds is generally received by
the Fund on a semi-annual or annual basis. Because interest on the Bonds is not
received at a constant rate throughout the year, any Monthly Income Distribution
may be more or less than the interest actually received. To eliminate
fluctuations in the Monthly Income Distribution, the Trustee will advance
amounts necessary to provide approximately equal interest distributions; it will
be reimbursed, without interest, from interest received on the Bonds, but the
Trustee is compensated, in part, by holding the Fund's cash balances in
non-interest bearing accounts. Along with the Monthly Income Distributions, the
Trustee
8
<PAGE>
will distribute the investor's pro rata share of principal received from
any disposition of a Bond to the extent available for distribution. In addition,
distributions of amounts necessary to pay the deferred portion of the sales
charge will be made from the Capital and Income Accounts to an account
maintained by the Trustee for purposes of satisfying investors' sales charge
obligations.
The initial estimated annual income per Unit, after deducting estimated
annual Fund expenses and the portion of the deferred sales charge payable from
interest income, as stated in Defining Your Income in Part A of the Prospectus
will change as Bonds mature, are called or sold or otherwise disposed of, as
replacement bonds are deposited and as Fund expenses change. Because the
Portfolio is not actively managed, income distributions will generally not be
affected by changes in interest rates. Depending on the financial conditions of
the issuers of the Bonds, the amount of income should be substantially
maintained as long as the Portfolio remains unchanged; however, optional bond
redemptions or other Portfolio changes may occur more frequently when interest
rates decline, which would result in early returns of principal and possibly
earlier termination of the Fund.
REINVESTMENT
Distributions will be paid in cash unless the investor elects to have
distributions reinvested without sales charge in the Municipal Fund Accumulation
Program, Inc. The Program is an open-end management investment company whose
investment objective is to obtain income exempt from regular federal income
taxes by investing in a diversified portfolio of state, municipal and public
authority bonds rated A or better or with comparable credit characteristics.
Reinvesting compounds earnings free from federal tax. Holders participating in
the Program will be subject to state and local income taxes to the same extent
as if the distributions had been received in cash, and most of the income on the
Program is subject to state and local income taxes. For more complete
information about the Program, including charges and expenses, return the card
enclosed in Part A of the Prospectus for the Program's prospectus. Read it
carefully before you decide to participate. Written notice of election to
participate must be received by the Trustee at least ten days before the Record
Day for the first distribution to which the election is to apply.
FUND EXPENSES
Estimated annual Fund expenses are listed under Defining Your Costs in Part
A of the Prospectus; if actual expenses exceed the estimate, the excess will be
borne by the Fund. The Trustee's annual fee is payable in monthly installments.
The Trustee also benefits when it holds cash for the Fund in non-interest
bearing accounts. Possible additional charges include Trustee fees and expenses
for extraordinary services, costs of indemnifying the Trustee and the Sponsors,
costs of action taken to protect the Fund and other legal fees and expenses,
Fund termination expenses and any governmental charges. The Trustee has a lien
on Fund assets to secure reimbursement of these amounts and may sell Bonds for
this purpose if cash is not available. The Sponsors receive an annual fee of a
maximum of $0.35 per $1,000 face amount to reimburse them for the cost of
providing Portfolio supervisory services to the Fund. While the fee may exceed
their costs of providing these services to the Fund, the total supervision fees
from all Defined Asset Funds will not exceed their costs for these services to
all of those Series during any calendar year. The Sponsors may also be
reimbursed for their costs of providing bookkeeping and administrative services
to the Fund, currently estimated at $0.10 per Unit. The Trustee's, Sponsors' and
Evaluator's fees may be adjusted for inflation without investors' approval.
All expenses in establishing the Fund will be paid from the Underwriting
Account at no charge to the Fund. Sales charges on Defined Asset Funds range
from under 1.0% to 5.5%. This may be less than you might pay to buy and hold a
comparable managed fund. Defined Asset Funds can be a cost-effective way to
purchase and hold investments. Annual operating expenses are generally lower
than for managed funds. Because Defined Asset Funds have no management fees,
limited transaction costs and no ongoing marketing expenses, operating expenses
are generally less than 0.25% a year. When compounded annually, small
differences in expense ratios can make a big difference in your investment
results.
FUND PERFORMANCE
Information on the performance of the Fund for various periods, on the
basis of changes in Unit price plus the amount of income and principal
distributions reinvested, may be included from time to time in advertisements,
sales literature, reports and other information furnished to current or
prospective investors. Total return figures are not averaged, and may not
reflect deduction of the sales charge, which would decrease the return. Average
annualized return figures reflect deduction of the maximum sales charge. No
provision is made for any income taxes payable.
9
<PAGE>
Past performance may not be indicative of future results. The Fund is not
actively managed. Unit price and return fluctuate with the value of the Bonds in
the Portfolio, so there may be a gain or loss when Units are sold.
Fund performance may be compared to performance on the same basis (with
distributions reinvested) of Moody's Municipal Bond Averages or performance data
from publications such as Lipper Analytical Services, Inc., Morningstar
Publications, Inc., Money Magazine, The New York Times, U.S. News and World
Report, Barron's Business Week, CDA Investment Technology, Inc., Forbes Magazine
or Fortune Magazine. As with other performance data, performance comparisons
should not be considered representative of the Fund's relative performance for
any future period.
TAXES
The following discussion addresses only the tax consequences under current
law of Units held as capital assets and does not address the tax consequences of
Units held by dealers, financial institutions or insurance companies or other
investors with special circumstances.
In the opinion of Davis Polk & Wardwell, special counsel for the Sponsors,
under existing law:
The Fund is not an association taxable as a corporation for federal
income tax purposes. Each investor will be considered the owner of a pro
rata portion of each Bond in the Fund under the grantor trust rules of
Sections 671-679 of the Internal Revenue Code of 1986, as amended (the
'Internal Revenue Code'). Each investor will be considered to have received
the interest and accrued the original issue discount, if any, on his pro
rata portion of each Bond when interest on the Bond is received or original
issue discount is accrued by the Fund. The investor's basis in his Units
will be equal to the cost of his Units, including any up-front sales
charge.
The investor's basis in his Units will be equal to the cost of his Units
including any up-front sales charge and any deferred sales charges to which
the investor's Units are subject. When the Fund pays the deferred sales
charge on behalf of an investor, the investor will be treated as if the
Fund had actually distributed to the investor an amount equal to the
deferred sales charge and as if the investor had paid such charge directly.
When an investor pays for accrued interest, the investor's confirmation
of purchase will report to him the amount of accrued interest for which he
paid. These investors will receive the accrued interest amount as part of
their first monthly distribution. Accordingly, these investors should
reduce their tax basis by the accrued interest amount after the first
monthly distribution.
An investor will recognize taxable gain or loss when all or part of his
pro rata portion of a Bond is disposed of by the Fund. An investor will
also be considered to have disposed of all or a portion of his pro rata
portion of each Bond when he sells or redeems all or some of his Units. An
investor who is treated as having acquired his pro rata portion of a Bond
at a premium will be required to amortize the premium over the term of the
Bond. The amortization is only a reduction of basis for the investor's pro
rata portion of the Bond and does not result in any deduction against the
investor's income. Therefore, under some circumstances, an investor may
recognize taxable gain when his pro rata portion of a Bond is disposed of
for an amount equal to or less than his original tax basis therefor.
Under Section 265 of the Internal Revenue Code, a non-corporate investor
is not entitled to a deduction for his pro rata share of fees and expenses
of the Fund, because the fees and expenses are incurred in connection with
the production of tax-exempt income. Further, if borrowed funds are used by
an investor to purchase or carry Units of the Fund, interest on this
indebtedness will not be deductible for federal income tax purposes. In
addition, under rules used by the Internal Revenue Service, the purchase of
Units may be considered to have been made with borrowed funds even though
the borrowed funds are not directly traceable to the purchase of Units.
Under the income tax laws of the State and City of New York, the Fund is
not an association taxable as a corporation and income received by the Fund
will be treated as the income of the investors in the same manner as for
federal income tax purposes, but will not necessarily be tax-exempt.
The foregoing discussion relates only to federal and certain aspects of
New York State and City income taxes. Depending on their state of
residence, investors may be subject to state and local taxation and should
consult their own tax advisers in this regard.
10
<PAGE>
* * *
In the opinion of bond counsel rendered on the date of issuance of each
Bond, the interest on each Bond is excludable from gross income under existing
law for regular federal income tax purposes (except in certain circumstances
depending on the investor) but may be subject to state and local taxes, and
interest on some or all of the Bonds may become subject to regular federal
income tax, perhaps retroactively to their date of issuance, as a result of
changes in federal law or as a result of the failure of issuers (or other users
of the proceeds of the Bonds) to comply with certain ongoing requirements. If
the interest on a Bond should be determined to be taxable, the Bond would
generally have to be sold at a substantial discount. In addition, investors
could be required to pay income tax on interest received prior to the date on
which the interest is determined to be taxable.
Neither the Sponsors nor Davis Polk & Wardwell have made or will make any
review of the proceedings relating to the issuance of the Bonds or the basis for
these opinions and there can be no assurance that the issuer (and other users)
will comply with any ongoing requirements necessary for a Bond to maintain its
tax-exempt character.
RECORDS AND REPORTS
The Trustee keeps a register of the names, addresses and holdings of all
investors. The Trustee also keeps records of the transactions of the Fund,
including a current list of the Bonds and a copy of the Indenture, and
supplemental information on the operations of the Fund and the risks associated
with the Bonds held by the Fund, which may be inspected by investors at
reasonable times during business hours.
With each distribution, the Trustee includes a statement of the interest
and any other receipts being distributed. Within five days after deposit of
Bonds in exchange or substitution for Bonds (or contracts) previously deposited,
the Trustee will send a notice to each investor, identifying both the Bonds
removed and the replacement bonds deposited. The Trustee sends each investor of
record an annual report summarizing transactions in the Fund's accounts and
amounts distributed during the year and Bonds held, the number of Units
outstanding and the Redemption Price at year end, the interest received by the
Fund on the Bonds, the gross proceeds received by the Fund from the disposition
of any Bond (resulting from redemption or payment at maturity or sale of any
Bond), and the fees and expenses paid by the Fund, among other matters. The
Trustee will also furnish annual information returns to each investor and to the
Internal Revenue Service. Investors are required to report to the Internal
Revenue Service the amount of tax-exempt interest received during the year.
Investors may obtain copies of Bond evaluations from the Trustee to enable them
to comply with federal and state tax reporting requirements. Fund accounts are
audited annually by independent accountants selected by the Sponsors. Audited
financial statements are available from the Trustee on request.
TRUST INDENTURE
The Fund is a 'unit investment trust' created under New York law by a Trust
Indenture among the Sponsors, the Trustee and the Evaluator. This Prospectus
summarizes various provisions of the Indenture, but each statement is qualified
in its entirety by reference to the Indenture.
The Indenture may be amended by the Sponsors and the Trustee without
consent by investors to cure ambiguities or to correct or supplement any
defective or inconsistent provision, to make any amendment required by the SEC
or other governmental agency or to make any other change not materially adverse
to the interest of investors (as determined in good faith by the Sponsors). The
Indenture may also generally be amended upon consent of investors holding 51% of
the Units. No amendment may reduce the interest of any investor in the Fund
without the investor's consent or reduce the percentage of Units required to
consent to any amendment without unanimous consent of investors. Investors will
be notified on the substance of any amendment.
The Trustee may resign upon notice to the Sponsors. It may be removed by
investors holding 51% of the Units at any time or by the Sponsors without the
consent of investors if it becomes incapable of acting or bankrupt, its affairs
are taken over by public authorities, or if under certain conditions the
Sponsors determine in good faith that its replacement is in the best interest of
the investors. The Evaluator may resign or be removed by the Sponsors and the
Trustee without the investors' consent. The resignation or removal of either
becomes effective upon acceptance of appointment by a successor; in this case,
the Sponsors will use their best efforts to appoint a successor promptly;
however, if upon resignation no successor has accepted appointment within 30
days after notification, the resigning Trustee or Evaluator may apply to a court
of competent jurisdiction to appoint a successor.
Any Sponsor may resign so long as one Sponsor with a net worth of
$2,000,000 remains and is agreeable to the resignation. A new Sponsor may be
appointed by the remaining Sponsors and the Trustee to assume
11
<PAGE>
the duties of the resigning Sponsor. If there is only one Sponsor and it fails
to perform its duties or becomes incapable of acting or bankrupt or its affairs
are taken over by public authorities, the Trustee may appoint a successor
Sponsor at reasonable rates of compensation, terminate the Indenture and
liquidate the Fund or continue to act as Trustee without a Sponsor. Merrill
Lynch, Pierce, Fenner & Smith Incorporated has been appointed as Agent for the
Sponsors by the other Sponsors.
The Sponsors, the Trustee and the Evaluator are not liable to investors or
any other party for any act or omission in the conduct of their responsibilities
absent bad faith, willful misfeasance, negligence (gross negligence in the case
of a Sponsor or the Evaluator) or reckless disregard of duty. The Indenture
contains customary provisions limiting the liability of the Trustee.
MISCELLANEOUS
LEGAL OPINION
The legality of the Units has been passed upon by Davis Polk & Wardwell,
450 Lexington Avenue, New York, New York 10017, as special counsel for the
Sponsors.
AUDITORS
The Statement of Condition in Part A of the Prospectus was audited by
Deloitte & Touche LLP, independent accountants, as stated in their opinion. It
is included in reliance upon that opinion given on the authority of that firm as
experts in accounting and auditing.
TRUSTEE
The Trustee and its address is stated on the back cover of Part A of the
Prospectus. The Trustee is subject to supervision by the Federal Deposit
Insurance Corporation, the Board of Governors of the Federal Reserve System and
either the Comptroller of the Currency or state banking authorities.
SPONSORS
Each Sponsor is a Delaware corporation and is engaged directly or
indirectly in the investment advisory business, and the underwriting, securities
and commodities brokerage business and is a member of the New York Stock
Exchange, Inc., other major securities exchanges and commodity exchanges, and
the National Association of Securities Dealers, Inc. Merrill Lynch, Pierce,
Fenner & Smith Incorporated is a wholly-owned subsidiary of Merrill Lynch Co.
Inc. Smith Barney Inc. is an indirect wholly-owned subsidiary of The Travelers
Inc. Prudential Securities Incorporated is an indirect wholly-owned subsidiary
of the Prudential Insurance Company of America. Dean Witter Reynolds Inc. is the
principal operating subsidiary of Dean Witter, Discover & Co. PaineWebber
Incorporated is a wholly-owned subsidiary of PaineWebber Group Inc. Each
Sponsor, or one of its predecessor corporations, has acted as Sponsor of a
number of series of unit investment trusts. Each Sponsor has acted as principal
underwriter and managing underwriter of other investment companies. The
Sponsors, in addition to participating as members of various selling groups or
as agents of other investment companies, execute orders on behalf of investment
companies for the purchase and sale of securities of these companies and sell
securities to these companies in their capacities as brokers or dealers in
securities.
PUBLIC DISTRIBUTION
In the initial offering period Units will be distributed to the public
through the Underwriting Account and dealers who are members of the National
Association or Securities Dealers, Inc. The initial offering period is 30 days
or less if all Units are sold. If some Units initially offered have not been
sold, the Sponsors may extend the initial offering period for up to four
additional successive 30-day periods.
The Sponsors intend to qualify Units for sale in all states in which
qualification is deemed necessary through the Underwriting Account and by
dealers who are members of the National Association of Securities Dealers, Inc.;
however, Units of a State trust will be offered for sale only in the State for
which the trust is named, except that Units of a New Jersey trust will also be
offered in Connecticut, and Units of a New York trust will also be offered in
Connecticut, Florida and Puerto Rico. The Sponsors do not intend to qualify
Units for sale in any foreign countries and this Prospectus does not constitute
an offer to sell Units in any country where Units cannot lawfully be sold. Sales
to dealers and to introducing dealers, if any, will initially be made at prices
which represent a concession from the Public Offering Price, but the Agent for
the Sponsors reserves the right to change the rate of any concession from time
to time. Any dealer or introducing dealer may reallow a concession up to the
concession to dealers.
12
<PAGE>
UNDERWRITERS' AND SPONSORS' PROFITS
Upon sale of the Units, the Underwriters will be entitled to receive sales
charges. The Sponsors also realize a profit or loss on deposit of the Bonds
equal to the difference between the cost of the Bonds to the Fund (based on the
offer side evaluation on the Initial Date of Deposit) and the Sponsors' cost of
the Bonds. In addition, a Sponsor or Underwriter may realize profits or sustain
losses on Bonds it deposits in the Fund which were acquired from underwriting
syndicates of which it was a member. During the initial offering period, the
Underwriting Account also may realize profits or sustain losses as a result of
fluctuations after the Initial Date of Deposit in the Public Offering Price of
the Units. In maintaining a secondary market for Units, the Sponsors will also
realize profits or sustain losses in the amount of any difference between the
prices at which they buy Units and the prices at which they resell these Units
(which include the sales charge) or the prices at which they redeem the Units.
Cash, if any, made available by buyers of Units to the Sponsors prior to a
settlement date for the purchase of Units may be used in the Sponsors'
businesses to the extent permitted by Rule 15c3-3 under the Securities Exchange
Act of 1934 and may be of benefit to the Sponsors.
SUPPLEMENTAL INFORMATION
Upon written or telephonic request to the Trustee listed on the back cover
of Part A of this Prospectus, investors will receive at no cost to the investor
supplemental information about the Fund, which has been filed with the
Securities and Exchange Commission and is hereby incorporated by reference. The
supplemental information includes more detailed risk factor disclosure about the
types of Bonds that may be part of the Fund's Portfolio, general risk disclosure
concerning any letters of credit or insurance securing certain Bonds, and
general information about the structure and operation of the Fund.
13
<PAGE>
APPENDIX A
DESCRIPTION OF RATINGS (AS DESCRIBED BY THE RATING COMPANIES THEMSELVES)
STANDARD & POOR'S RATINGS GROUP, A DIVISION OF MCGRAW-HILL, INC.
AAA--Debt rated AAA has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA--Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in small degree.
A--Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
BBB--Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.
BB, B, CCC, CC--Debt rated BB, B, CCC and CC is regarded, on balance, as
predominately speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. BB indicates the
lowest degree of speculation and CC the highest degree of speculation. While
such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.
The ratings may be modified by the addition of a plus or minus sign to show
relative standing within the major rating categories.
A provisional rating, indicated by 'p' following a rating, assumes the
successful completion of the project being financed by the issuance of the debt
being rated and indicates that payment of debt service requirements is largely
or entirely dependent upon the successful and timely completion of the project.
This rating, however, while addressing credit quality subsequent to completion
of the project, makes no comment on the likelihood of, or the risk of default
upon failure of, such completion.
NR--Indicates that no rating has been requested, that there is insufficient
information on which to base a rating or that Standard & Poor's does not rate a
particular type of obligation as a matter of policy.
MOODY'S INVESTORS SERVICE, INC.
Aaa--Bonds which are rated Aaa are judged to be the best quality. They
carry the smallest degree of investment risk and are generally referred to as
'gilt edge'. Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa--Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.
A--Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving security
to principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Baa--Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba--Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate, and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
a-1
<PAGE>
B--Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Rating symbols may include numerical modifiers 1, 2 or 3. The numerical
modifier 1 indicates that the security ranks at the high end, 2 in the
mid-range, and 3 nearer the low end, of the generic category. These modifiers of
rating symbols give investors a more precise indication of relative debt quality
in each of the historically defined categories.
Conditional ratings, indicated by 'Con.', are sometimes given when the
security for the bond depends upon the completion of some act or the fulfillment
of some condition. Such bonds are given a conditional rating that denotes their
probable credit stature upon completion of that act or fulfillment of that
condition.
NR--Should no rating be assigned, the reason may be one of the following:
(a) an application for rating was not received or accepted; (b) the issue or
issuer belongs to a group of securities that are not rated as a matter of
policy; (c) there is a lack of essential data pertaining to the issue or issuer
or (d) the issue was privately placed, in which case the rating is not published
in Moody's publications.
FITCH INVESTORS SERVICE, INC.
AAA--These bonds are considered to be investment grade and of the highest
quality. The obligor has an extraordinary ability to pay interest and repay
principal, which is unlikely to be affected by reasonably foreseeable events.
AA--These bonds are considered to be investment grade and of high quality.
The obligor's ability to pay interest and repay principal, while very strong, is
somewhat less than for AAA rated securities or more subject to possible change
over the term of the issue.
A--These bonds are considered to be investment grade and of good quality.
The obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
BBB--These bonds are considered to be investment grade and of satisfactory
quality. The obligor's ability to pay interest and repay principal is considered
to be adequate. Adverse changes in economic conditions and circumstances,
however are more likely to weaken this ability than bonds with higher ratings.
A '+' or a '-' sign after a rating symbol indicates relative standing in
its rating.
DUFF & PHELPS CREDIT RATING CO.
AAA--Highest credit quality. The risk factors are negligible, being only
slightly more than for risk-free U.S. Treasury debt.
AA--High credit quality. Protection factors are strong. Risk is modest but
may vary slightly from time to time because of economic condtions.
A--Protection factors are average but adequate. However, risk factors are
more variable and greater in periods of economic stress.
A '+' or a '-' sign after a rating symbol indicates relative standing in
its rating.
a-2
<PAGE>
APPENDIX B
SALES CHARGE SCHEDULES
DEFERRED SALES CHARGES. Units purchased during the first year of the Fund
will be subject to periodic deferred and contingent deferred sales charges.
Units purchased in the second year will be subject to an up-front sales charge
as well as periodic deferred and contingent deferred sales charges. During the
first five years of the Fund, a fixed periodic deferred sales charge of $2.75
per Unit is payable on 20 quarterly payment dates occurring on the 10th day of
February, May, August and November, commencing no earlier than ]
days after the Initial Date of Deposit. Investors purchasing Units on the
Initial Date of Deposit and holding for at least five years, for example, would
incur total periodic deferred sales charges of $55.00 per Unit. Because of the
time value of money, however, as of the Initial Date of Deposit this periodic
deferred sales charge obligation would, at current interest rates, equate to an
up-front sales charge of approximately 4.75%.
On the Fund's initial offering date, the Public Offering Price per Unit
will be $1,000. Subsequently, the Public Offering Price per Unit will fluctuate.
As the periodic deferred sales charge is a fixed dollar amount irrespective of
the Public Offering Price, it will represent a varying percentage of the Public
Offering Price Price. An up-front sales charge will be imposed on all unit
purchases after the first year of the Fund. The following table illustrates the
combined maximum up-front and periodic deferred sales charges that would be
incurred by an investor purchasing Units at the beginning of each of the first
two years of the Fund (based on a constant Unit price) and holds them through
the fifth year of the Fund:
<TABLE><CAPTION>
TOTAL
--------------------
UP-FRONT AND
UP-FRONT SALES CHARGE MAXIMUM PERIODIC
AMOUNT DEFERRED SALES
DEFERRED PER CHARGES
$1,000 INVESTED PER $1,000 INVESTED
----------------------------------------------------------- --------------- --------------------
YEAR OF UNIT AS PERCENT OF PUBLIC AS PERCENT OF NET AMOUNT PER
PURCHASE OFFERING PRICE AMOUNT INVESTED $1,000 INVESTED
- ----------------- --------------------- ------------------- ---------------
<S> <C> <C> <C> <C> <C>
1 None None None $ 55.00 $ 55.00
2 1.10% 1.11% $ 11.00 44.00 55.00
</TABLE>
CONTINGENT DEFERRED SALES CHARGE. Units redeemed or repurchased within 4
years after the Fund's Initial Date of Deposit will not only incur the periodic
deferred sales charge until the quarter of redemption or repurchase but will
also be subject to a contingent deferred sales charge:
YEAR SINCE FUND'S CONTINGENT DEFERRED
INITIAL DATE OF SALES CHARGE PER
DEPOSIT UNIT
- -------------------- --------------------
1 $ 25.00
2 15.00
3 10.00
4 5.00
5 and thereafter None
The contingent deferred sales charge is waived on any redemption or
repurchase of Units after the death (including the death of a single joint
tenant with rights of survivorship) or disability (as defined in the Internal
Revenue Code) of an investor, provided the redemption or repurchase is requested
within one year of the death or initial determination of disability. The
Sponsors may require receipt of satisfactory proof of disability before
releasing the portion of the proceeds representing the amount of the contingent
deferred sales charge waived.
To assist investors in understanding the total costs of purchasing units
during the first two years of the Fund and disposing of those units by the fifth
year, the following tables set forth the maximum combined up-front, periodic and
contingent deferred sales charges that would be incurred (assuming a constant
Unit price) by an investor:
UNITS PURCHASED ON INITIAL OFFERING DATE
<TABLE><CAPTION>
YEAR OF UNIT DEFERRED SALES CONTINGENT DEFERRED
DISPOSITION UP-FRONT SALES CHARGE CHARGE SALES CHARGE TOTAL SALES CHARGES
- ------------------- --------------------- ---------------- ------------------- -------------------
<S> <C> <C> <C> <C>
1 None $ 11.00 $ 25.00 $ 36.00
2 None 22.00 15.00 37.00
3 None 33.00 10.00 43.00
4 None 44.00 5.00 49.00
5 None 55.00 0.00 55.00
UNITS PURCHASED ON FIRST ANNIVERSARY OF FUND
YEAR OF UNIT DEFERRED SALES CONTINGENT DEFERRED
DISPOSITION UP-FRONT SALES CHARGE CHARGE SALES CHARGE TOTAL SALES CHARGES
- ----------------- --------------------- ---------------- ------------------- -------------------
2 $ 11.00 $ 11.00 $ 15.00 $ 37.00
3 11.00 22.00 10.00 43.00
4 11.00 33.00 5.00 49.00
5 11.00 44.00 0.00 55.00
</TABLE>
b-1
<PAGE>
APPENDIX C
FLORIDA DISCLOSURE
FLORIDA RISK FACTORS
The financial condition of the State of Florida is affected by various
national, economic, social and environmental policies and conditions.
Additionally, limitations placed by the State's Constitution on the State and
its local governments covering income taxes, ad valorem taxes, bond indebtedness
and other matters, as well as various statutory limitations, may constrain the
revenue-generating capacity of the State and its local governments and,
therefore, the ability of the issuers of the Bonds to satisfy their obligations.
The economic vitality of the State and its various regions and, therefore,
the ability of the State and its local govenments to satisfy the Bonds, are
affected by numerous factors. South Florida is susceptible to international
trade and currency imbalances and to economic problems in Central and South
America due to its geographical location and its involvement with foreign trade,
tourism and investment capital. The central and northern portions of the State,
on the other hand, could be impacted by problems in the agricultural sector,
including crop failures, severe weather conditions or other agriculture-related
problems, particularly with regard to the citrus and sugar industries. The
State's economy also has historically been somewhat dependent on the tourism and
construction industries and is sensitive to trends in those sectors.
General obligation bonds of the State are currently rated Aa by Moody's
Investors Service and AA by Standard & Poor's.
FLORIDA TAXES
In the opinion of Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel,
P.A., Miami, Florida, special counsel on Florida tax matters, under
existing Florida law:
1. The Fund will not be subject to income, franchise or other taxes of a
similar nature imposed by the State of Florida or its subdivisions,
agencies or instrumentalities.
2. Because Florida does not impose a personal income tax, non-corporate
investors in Units of the Fund will not be subject to any Florida income
taxes with respect to (i) amounts received by the Fund on the Bonds it
holds; (ii) amounts which are distributed by the Fund to non-corporate
investors in Units of the Fund or (iii) any gain realized on the sale or
redemption of Bonds by the Fund or of a Unit of the Fund by a non-corporate
investor. However, corporations as defined in Chapter 220, Florida Statutes
(1991), which are otherwise subject to Florida income taxation will be
subject to tax on their respective share of any income and gain realized by
the Fund and on any gain realized by a corporate investor on the sale or
redemption of Units of the Fund by the corporate investor.
3. The Units will be subject to Florida estate taxes only if held by
Florida residents, or if held by non-residents deemed to have business
sites in Florida. The Florida estate tax is limited to the amount of the
credit for state death taxes provided for in Section 2011 of the Internal
Revenue Code.
4. Bonds issued by the State of Florida or its political subdivisions
are exempt from Florida intangible personal property taxation under Chapter
199, Florida Statutes (1991), as amended. Bonds issued by the Government of
Puerto Rico or by the Government of Guam, or by their authority, are exempt
by Federal statute from taxes such as the Florida intangible personal
property tax. Thus, the Fund will not be subject to Florida intangible
personal property tax on any Bonds in the Fund issued by the State of
Florida or its political subdivisions, by the Government of Puerto Rico or
by its authority or by the Government of Guam or by its authority. In
addition, the Units of the Fund will not be subject to the Florida
intangible personal property tax if the Fund invests solely in such
Florida, Puerto Rico or Guam debt obligations.
c-1
<PAGE>
PROSPECTUS PARTS A AND B
A propectus for Defined Asset Funds Municipal Series consists of a Part A
and Part B. The Prospectus does not contain all of the information with respect
to the investment company set forth in its registration statement and exhibits
relating thereto which have been 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.
No person is authorized to give any information or to make any
representations with respect to this investment company not contained in the
Prospectus; and any information or representation not contained herein must not
be relied upon as having been authorized. The Prospectus does not constitute an
offer to sell, or a solicitation of an offer to buy, securities in any state to
any person to whom it is not lawful to make such offer in such state.
<PAGE>
PART II
ADDITIONAL INFORMATION NOT INCLUDED IN THE PROSPECTUS
A. The following information relating to the Depositors is incorporated by
reference to the SEC filings indi-
cated and made a part of this Registration Statement.
SEC FILE OR
IDENTIFICATION
NUMBER
--------------------
I. Bonding Arrangements and Date of Organization of the
Depositors filed pursuant to Items A and B of
Part II of the Registration Statement on Form
S-6 under the Securities Act of 1933:
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.................................... 2-52691
Smith Barney Inc................................ 33-29106
PaineWebber Incorporated........................ 2-87965
Prudential Securities Incorporated.............. 2-61418
Dean Witter Reynolds Inc........................ 2-60599
II. Information as to Officers and Directors of the
Depositors filed pursuant to Schedules A and D
of Form BD under Rules 15b1-1 and 15b3-1 of the
Securities Exchange Act of 1934:
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.................................... 8-7721
Smith Barney Inc................................ 8-8177
PaineWebber Incorporated........................ 8-16267
Prudential Securities Incorporated.............. 8-12321
Dean Witter Reynolds Inc........................ 8-14172
III. Charter documents of the Depositors filed as
Exhibits to the Registration Statement on Form
S-6 under the Securities Act of 1933 (Charter,
By-Laws):
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.................................... 2-73866, 2-77549
Smith Barney Inc................................ 33-20499
PaineWebber Incorporated........................ 2-87965, 2-87965
Prudential Securities Incorporated.............. 2-86941, 2-86941
Dean Witter Reynolds Inc........................ 2-60599, 2-86941
B. The Internal Revenue Service Employer Identification
Numbers of the Sponsors and Trustee are as
follows:
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.................................... 13-5674085
Smith Barney Inc................................ 13-1912900
PaineWebber Incorporated........................ 13-2638166
Prudential Securities Incorporated.............. 13-6134767
Dean Witter Reynolds Inc........................ 94-1671384
The Chase Manhattan Bank, N.A................... 13-2633612
UNDERTAKING
The Sponsors undertake that they will not instruct the Trustee to accept from
(i) Asset Guaranty Reinsurance Company, Municipal Bond Investors Assurance
Corporation or any other insurance company affiliated with any of the Sponsors,
in settlement of any claim, less than an amount sufficient to pay any principal
or interest (and, in the case of a taxability redemption, premium) then due on
any Security in accordance with the municipal bond guaranty insurance policy
attached to such Security or (ii) any affiliate of the Sponsors who has any
obligation with respect to any Security, less than the full amount due pursuant
to the obligation, unless such instructions have been approved by the Securities
and Exchange Commission pursuant to Rule 17d-1 under the Investment Company Act
of 1940.
II-1
<PAGE>
The Sponsors undertake that they will not make any amendment to the
Supplement to this Registration Statement which includes material changes
without submitting the amendment for Staff review prior to distribution.
The Sponsors undertake that if, based on the portfolio of any specific
Trust they believe that either financial statements of third parties or
disclosure of the risks of investing in a specific state are required, they will
not seek to go effective with a registration statement for that Trust without
previously submitting the disclosure for Staff review.
II-2
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
The Registration Statement on Form S-6 comprises the following papers and
documents:
The facing sheet of Form S-6.
The Cross-Reference Sheet.
The Prospectus.
Additional Information not included in the Prospectus (Part II).
Consent of independent accountants.
The following exhibits:
*1.1 --Form of Trust Indenture
1.1.1 --Form of Standard Terms and Conditions of Trust Effective October 21,
1993 (incorporated by reference to Exhibit 1.1.1 to the Registration
Statement of Municipal Investment Trust Fund, Multistate Series-48,
1933 Act File No. 33-50247).
1.2 --Form of Master Agreement Among Underwriters (incorporated by reference
to Exhibit 1.2 to the Registration Statement of The Corporate Income
Fund, One Hundred Ninety-Fourth Monthly Payment Series, 1933 Act File
No. 2-90925).
2.1 --Form of Certificate of Beneficial Interest (included in Exhibit
1.1.1).
*3.1 --Opinion of counsel as to the legality of the securities being issued
including their consent to the use of their names under the headings
'Taxes' and 'Miscellaneous--Legal Opinion' in the Prospectus.
*4.1.1 --Consent of the Evaluator.
*4.1.2 --Consent of the Rating Agency.
*9.1 --Form of Information Supplement
- ------------------------------------
* To be filed by amendment.
R-1
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT HAS
DULY CAUSED THIS REGISTRATION STATEMENT OR AMENDMENT TO THE REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY
AUTHORIZED IN THE CITY OF NEW YORK AND STATE OF NEW YORK ON THE 9TH DAY OF
NOVEMBER, 1994.
SIGNATURES APPEAR ON PAGES R-3, R-4, R-5, R-6 AND R-7.
A majority of the members of the Board of Directors of Merrill Lynch,
Pierce, Fenner & Smith Inc. has signed this Registration Statement or Amendment
to the Registration Statement pursuant to Powers of Attorney authorizing the
person signing this Registration Statement or Amendment to the Registration
Statement to do so on behalf of such members.
A majority of the members of the Board of Directors of Smith Barney Inc.
has signed this Registration Statement or Amendment to the Registration
Statement pursuant to Powers of Attorney authorizing the person signing this
Registration Statement or Amendment to the Registration Statement to do so on
behalf of such members.
A majority of the members of the Executive Committee of the Board of
Directors of PaineWebber Incorporated has signed this Registration Statement or
Amendment to the Registration Statement pursuant to Powers of Attorney
authorizing the person signing this Registration Statement or Amendment to the
Registration Statement to do so on behalf of such members.
A majority of the members of the Board of Directors of Prudential
Securities Incorporated has signed this Registration Statement or Amendment to
the Registration Statement pursuant to Powers of Attorney authorizing the person
signing this Registration Statement or Amendment to the Registration Statement
to do so on behalf of such members.
A majority of the members of the Board of Directors of Dean Witter Reynolds
Inc. has signed this Registration Statement or Amendment to the Registration
Statement pursuant to the Powers of Attorney authorizing the person signing this
Registration Statement or Amendment to the Registration Statement to do so on
behalf of such members.
R-2
<PAGE>
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DEPOSITOR
By the following persons, who constitute Powers of Attorney have been filed
a majority of under
the Board of Directors of Merrill Form SE and the following 1933 Act
Lynch, Pierce, File
Fenner & Smith Incorporated: Number: 33-43466
HERBERT M. ALLISON, JR.
BARRY S. FREIDBERG
EDWARD L. GOLDBERG
STEPHEN L. HAMMERMAN
JEROME P. KENNEY
DAVID H. KOMANSKY
DANIEL T. NAPOLI
THOMAS H. PATRICK
JOHN L. STEFFENS
DANIEL P. TULLY
ROGER M. VASEY
ARTHUR H. ZEIKEL
By
ERNEST V. FABIO
(As authorized signatory for Merrill Lynch, Pierce,
Fenner & Smith Incorporated and
Attorney-in-fact for the persons listed above)
R-3
<PAGE>
SMITH BARNEY INC.
DEPOSITOR
By the following persons, who constitute a majority of Powers of Attorney
the Board of Directors of Smith Barney Inc.: have been filed
under the 1933 Act
File Number:
33-49753 and
33-51607
STEVEN D. BLACK
JAMES BOSHART III
ROBERT A. CASE
JAMES DIMON
ROBERT DRUSKIN
ROBERT F. GREENHILL
JEFFREY LANE
JACK L. RIVKIN
By GINA LEMON
(As authorized signatory for
Smith Barney Inc. and
Attorney-in-fact for the persons listed above)
R-4
<PAGE>
PAINEWEBBER INCORPORATED
DEPOSITOR
By the following persons, who constitute Powers of Attorney have been filed
a majority of under
the Executive Committee of the Board the following 1933 Act File
of Directors Number: 33-55073
of PaineWebber Incorporated:
PAUL B. GUENTHER
DONALD B. MARRON
JOSEPH J. GRANO, JR.
LEE FENSTERSTOCK
By
ROBERT E. HOLLEY
(As authorized signatory for PaineWebber Incorporated
and Attorney-in-fact for the persons listed above)
R-5
<PAGE>
PRUDENTIAL SECURITIES INCORPORATED
DEPOSITOR
By the following persons, who constitute Powers of Attorney have been filed
a majority of under Form SE and the following 1933
the Executive Committee of the Board Act File Number: 33-41631
of Directors of
Prudential Securities Incorporated:
ALAN D. HOGAN
HOWARD A. KNIGHT
GEORGE A. MURRAY
LELAND B. PATON
HARDWICK SIMMONS
By
RICHARD R. HOFFMANN
(As authorized signatory for Prudential Securities
Incorporated and Attorney-in-fact for the persons listed above)
R-6
<PAGE>
DEAN WITTER REYNOLDS INC.
DEPOSITOR
By the following persons, who constitute Powers of Attorney have been filed
a majority of under Form SE and the following
the Board of Directors of Dean Witter 1933 Act File Number: 33-17085
Reynolds Inc.:
NANCY DONOVAN
CHARLES A. FIUMEFREDDO
JAMES F. HIGGINS
STEPHEN R. MILLER
PHILIP J. PURCELL
THOMAS C. SCHNEIDER
WILLIAM B. SMITH
By
MICHAEL D. BROWNE
(As authorized signatory for Dean Witter Reynolds Inc.
and Attorney-in-fact for the persons listed above)
R-7
