DEFINED ASSET FUNDS--REGISTERED TRADEMARK--
----------------------------------------------------
MUNICIPAL INVESTMENT TRUST FUND
INTERMEDIATE TERM SERIES--312
(A UNIT INVESTMENT TRUST)
- PORTFOLIO OF SHORT-INTERMEDIATE TERM MUNICIPAL
BONDS
- DESIGNED FOR INCOME FREE FROM REGULAR FEDERAL
INCOME TAX
- MONTHLY INCOME DISTRIBUTIONS
SPONSORS:
MERRILL LYNCH, -----------------------------------------------------
PIERCE, FENNER & SMITH The Securities and Exchange Commission has not
INCORPORATED approved or disapproved these Securities or passed
SALOMON SMITH BARNEY INC. upon the adequacy of this prospectus. Any
PAINEWEBBER INCORPORATED representation to the contrary is a criminal offense.
DEAN WITTER REYNOLDS INC. Prospectus dated May 19, 2000.
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Defined Asset Funds--Registered Trademark--
Defined Asset Funds-Registered Trademark- is America's oldest and largest family
of unit investment trusts, with over $160 billion sponsored over the last 28
years. Defined Asset Funds has been a leader in unit investment trust research
and product innovation. Our family of Funds helps investors work toward their
financial goals with a full range of quality investments, including municipal,
corporate and government bond portfolios, as well as domestic and international
equity portfolios.
Defined Asset Funds offer a number of advantages:
- A disciplined strategy of buying and holding with a long-term view is the
cornerstone of Defined Asset Funds.
- Fixed portfolio: Defined Funds follow a buy and hold investment strategy;
funds are not managed and portfolio changes are limited.
- Defined Portfolios: We choose the stocks and bonds in advance, so you know
what you're investing in.
- Professional research: Our dedicated research team seeks out stocks or bonds
appropriate for a particular fund's objectives.
- Ongoing supervision: We monitor each portfolio on an ongoing basis.
No matter what your investment goals, tolerance for risk or time horizon,
there's probably a Defined Asset Fund that suits your investment style. Your
financial professional can help you select a Defined Asset Fund that works best
for your investment portfolio.
THE FINANCIAL INFORMATION IN THIS PROSPECTUS IS AS OF THE EVALUATION DATE,
JANUARY 31, 2000.
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CONTENTS
PAGE
----
Risk/Return Summary.................. 3
What You Can Expect From Your
Investment......................... 7
Monthly Income..................... 7
Return Figures..................... 7
Records and Reports................ 7
The Risks You Face................... 8
Interest Rate Risk................. 8
Call Risk.......................... 8
Reduced Diversification Risk....... 8
Liquidity Risk..................... 8
Concentration Risk................. 8
Bond Quality Risk.................. 9
Insurance Related Risk............. 9
Litigation and Legislation Risks... 9
Selling or Exchanging Units.......... 10
Sponsors' Secondary Market......... 10
Selling Units to the Trustee....... 10
Exchange Option.................... 11
How The Fund Works................... 11
Pricing............................ 11
Evaluations........................ 11
Income............................. 12
Expenses........................... 12
Portfolio Changes.................. 12
Fund Termination................... 13
Certificates....................... 13
Trust Indenture.................... 13
Legal Opinion...................... 14
Auditors........................... 14
Sponsors........................... 14
Trustee............................ 14
Underwriters' and Sponsors'
Profits.......................... 15
Public Distribution................ 15
Code of Ethics..................... 15
Year 2000 Issues................... 15
Taxes................................ 15
Supplemental Information............. 17
Financial Statements................. D-1
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2
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RISK/RETURN SUMMARY
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1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is
exempt from regular federal income taxes
by investing in a fixed portfolio
consisting primarily of municipal
revenue bonds with an estimated average
life of 4 years.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued
by states, municipalities and public
authorities to finance the cost of
buying, building or improving various
projects intended to generate revenue,
such as airports, health care
facilities, housing and municipal
electric, water and sewer utilities.
Generally, payments on these bonds
depend solely on the revenues generated
by the projects, excise taxes or state
appropriations, and are not backed by
the government's taxing power.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
- The Fund plans to hold to maturity 16
short-intermediate term tax-exempt
municipal bonds with a current aggregate
face amount of $11,515,000.
- The Fund is a unit investment trust
which means that, unlike a mutual fund,
the Fund's portfolio is not managed.
- When the bonds were initially deposited
(February 6, 1998), they were rated A or
better by Standard & Poor's, Moody's or
Fitch, or in the opinion of the agent
for the Sponsors had similar credit
quality to bonds rated A or better. THE
CREDIT QUALITY OF THE BONDS MAY
CURRENTLY BE LOWER.
- Many of the bonds can be called at a
premium declining over time to par
value. Some bonds may be called earlier
at par for extraordinary reasons.
- 12% of the bonds are backed by bank
letters of credit.
- 25% of the bonds are insured by
insurance companies.
Letters of credit and insurance
guarantee timely payments of principal
and interest on the bonds (but not Fund
units or the market value of the bonds
before they mature).
The Portfolio consists of municipal
bonds of the following types:
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- Cooperatives 9%
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- General Obligation 4%
- Hospitals/Health Care 37%
- Housing 25%
- Lease Rental 10%
- Miscellaneous 3%
- Refunded Bonds 11%
- Special Tax 1%
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4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE
FUND. THIS CAN HAPPEN FOR VARIOUS
REASONS, INCLUDING:
- Rising interest rates, an issuer's
worsening financial condition or a drop
in bond ratings can reduce the price of
your units.
- Because the Fund is concentrated in
hospital/health care and housing bonds,
adverse developments in these sectors
may affect the value of your units.
- Assuming no changes in interest rates,
when you sell your units, they will
generally be worth less than your cost
because your cost included a sales fee.
- The Fund will receive early returns of
principal if bonds are called or sold
before they mature. If this happens your
income will decline and you may not be
able to reinvest the money you receive
at as high a yield or as long a
maturity.
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5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want monthly income free
from regular federal income tax. You
will benefit from a professionally
selected and supervised portfolio whose
risk is reduced by investing in bonds of
several different issuers.
The Fund is NOT appropriate for you if
you want a speculative investment that
changes to take advantage of market
movements, if you do not want a
tax-advantaged investment, if you are
subject to AMT or if you cannot tolerate
any risk.
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3
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DEFINING YOUR INCOME
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WHAT YOU MAY EXPECT (PAYABLE ON THE 25TH DAY
OF EACH MONTH):
Regular Monthly Income per unit $ 3.69
Annual Income per unit $44.31
RECORD DAY: 10th day of each month
THESE FIGURES ARE ESTIMATES ON THE EVALUATION DATE;
ACTUAL PAYMENTS MAY VARY.
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6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses
you may pay, directly or indirectly,
when you invest in the Fund.
INVESTOR FEES
Maximum Sales Fee (Load) on new
purchases (as a percentage of $1,000
invested) 2.50%
Employees of some of the Sponsors and
their affiliates may be charged a
reduced sales fee of no less than $5.00
per unit.
The maximum sales fee is reduced if you
invest at least $100,000, as follows:
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<CAPTION>
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
-------------- ------------
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Less than $100,000 2.50%
$100,000 to $249,999 2.25%
$250,000 to $499,999 2.00%
$500,000 to $999,999 1.75%
$1,000,000 and over 1.50%
Maximum Exchange Fee 1.50%
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<TABLE>
$0.71
Trustee's Fee
$0.56
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses)
<CAPTION>
ESTIMATED ANNUAL FUND OPERATING EXPENSES
AMOUNT
PER UNIT
--------
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$0.11
Evaluator's Fee
$0.20
Organization Costs
$0.14
Other Operating Expenses
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$1.72
TOTAL
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The Sponsors historically paid organization
costs and updating expenses.
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7. HOW HAVE SIMILAR FUNDS PERFORMED IN THE
PAST?
IN THE FOLLOWING CHART WE SHOW PAST
PERFORMANCE OF PRIOR SHORT-INTERMEDIATE
SERIES, WHICH HAD THE SAME INVESTMENT
OBJECTIVES, STRATEGIES AND TYPES OF
BONDS AS THIS FUND. These prior
Short-Intermediate Series were offered
after 1987 and were outstanding on March
31, 2000. OF COURSE, PAST PERFORMANCE OF
PRIOR SERIES IS NO GUARANTEE OF FUTURE
RESULTS OF THIS FUND.
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
FOR PRIOR SERIES
REFLECTING ALL EXPENSES. FOR PERIODS
ENDED 3/31/00.
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<CAPTION>
WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 1 YEAR 5 YEARS
<S> <C> <C> <C> <C>
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High 3.68 4.58% 4.65% 5.30%
Average 0.85 3.93 2.25 4.60
Low -3.58 3.46 -1.15 4.10
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managed and bonds are not sold because of market
changes. Rather, experienced Defined Asset Funds
financial analysts regularly review the bonds in the
Fund. The Fund may sell a bond if certain adverse
credit or other conditions exist.
9. HOW DO I BUY UNITS?
The minimum investment is one unit.
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You can buy units from any of the Sponsors and other
broker-dealers. The Sponsors are listed later in this
prospectus. Some banks may offer units for sale
through special arrangements with the Sponsors,
although certain legal restrictions may apply.
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4
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UNIT PRICE PER UNIT $1,000.97
(as of January 31, 2000)
Unit price is based on the net asset value of the Fund
plus the sales fee. An amount equal to any principal
cash, as well as net accrued but undistributed
interest on the unit, is added to the unit price. An
independent evaluator prices the bonds at 3:30 p.m.
Eastern time every business day. Unit price changes
every day with changes in the prices of the bonds in
the Fund.
10. HOW DO I SELL UNITS?
You may sell your units at any time to any Sponsor or
the Trustee for the net asset value determined at the
close of business on the date of sale. You will not
pay any other fee when you sell your units.
11. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income monthly. In the opinion of bond
counsel when each bond was issued, interest on the
bonds in this Fund is generally 100% exempt from
regular federal income tax.
Interest on approximately 28% of the bonds will be
taken into account in determining your preference
items for alternative minimum tax purposes. A portion
of the income may also be exempt from state and local
personal income taxes, depending on where you live.
You will also receive principal payments if bonds are
sold or called or mature, when the cash available is
more than $5.00 per unit. You will be subject to tax
on any gain realized by the Fund on the disposition of
bonds.
12. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT
You will receive your monthly income in cash unless
you choose to compound your income by reinvesting with
no sales fee in the Municipal Fund Investment
Accumulation Program, Inc. This program is an open-end
mutual fund with a comparable investment objective.
Income from this program will generally be subject to
state and local income taxes. FOR MORE COMPLETE
INFORMATION ABOUT THE PROGRAM, INCLUDING CHARGES AND
FEES, ASK THE TRUSTEE FOR THE PROGRAM'S PROSPECTUS.
READ IT CAREFULLY BEFORE YOU INVEST. THE TRUSTEE MUST
RECEIVE YOUR WRITTEN ELECTION TO REINVEST AT LEAST 10
DAYS BEFORE THE RECORD DAY OF AN INCOME PAYMENT.
EXCHANGE PRIVILEGES
You may exchange units of this Fund for units of
certain other Defined Asset Funds. You may also
exchange into this Fund from certain other funds. We
charge a reduced sales fee on exchanges.
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5
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TAX-FREE VS. TAXABLE INCOME: A COMPARISON OF TAXABLE AND TAX-FREE YIELDS
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EFFECTIVE
TAXABLE INCOME 2000* % TAX TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN BRACKET 3% 3.5% 4% 4.5% 5% 5.5% 6%
IS EQUIVALENT TO A TAXABLE YIELD OF
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$ 0- 26,250 $ 0- 43,850 15.00 3.53 4.12 4.71 5.29 5.88 6.47 7.06
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$ 26,251- 63,550 $ 43,851-105,950 28.00 4.17 4.86 5.56 6.25 6.94 7.64 8.33
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$ 63,551-132,600 $105,951-161,450 31.00 4.35 5.07 5.80 6.52 7.25 7.97 8.70
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$132,601-288,350 $161,451-288,350 36.00 4.69 5.47 6.25 7.03 7.81 8.59 9.38
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
OVER $288,350 OVER $288,350 39.60 4.97 5.79 6.62 7.45 8.28 9.11 9.93
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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TAXABLE INCOME 20
SINGLE RETURN 6.5%
IS
EQUIVALENT
TO A
TAXABLE
YIELD OF
- -----------------
$ 0- 26,250 7.65
- -----------------
$ 26,251- 63,550 9.03
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$ 63,551-132,600 9.42
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$132,601-288,350 10.16
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OVER $288,350 10.76
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To compare the yield of a taxable security with the yield of a federally
tax-free security, find your taxable income and read across. The table
incorporates 2000 federal income tax rates and assumes that all income would
otherwise be taxed at a U.S. investor's highest tax rate. Yield figures are for
example only.
*Based upon net amount subject to federal income tax after deductions and
exemptions. This table does not reflect the possible effect of other tax
factors, such as alternative minimum tax, personal exemptions, the phase-out of
exemptions, itemized deductions, the possible partial disallowance of deductions
or state and local taxation. Consequently, investors are urged to consult their
own tax advisers in this regard.
MUNICIPAL BONDS AND THE ALTERNATIVE MINIMUM TAX
<TABLE>
INCOME+ MAXIMUM "PREFERENCE" INCOME
WITHOUT TRIGGERING AMT
(STATE INCOME TAX RATES)
SINGLE ++ JOINT ++ 0% 7% 11%
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$50,000 $20,000 $15,000 $13,000
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$30,000 $19,000 $16,000 $14,000
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$100,000 $24,000 $15,000 $11,000
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$55,000 $21,000 $16,000 $13,000
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$225,000 $30,000 $12,000 $ 3,000
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$205,000 $30,000 $14,000 $ 6,000
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NOTES:
+ Regular taxable income plus state income taxes
and personal exemptions.
++ Assuming no dependents.
Under federal tax law, interest income on certain municipal bonds, although
exempt from regular income tax, is treated as a "preference" item for purposes
of AMT. The table above shows amounts of such municipal bond "preference"
interest income, assuming no other "preference" or similar items apply, that
individual taxpayers could receive in 2000 without becoming subject to the AMT.
The table gives information for single and joint returns of U.S. individuals
having no dependents. The table provides three income levels and three
hypothetical state income tax rates. The table further assumes that the stated
amount of municipal bond 'preference' interest income is subject to state income
taxes.
6
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WHAT YOU CAN EXPECT FROM YOUR INVESTMENT
MONTHLY INCOME
The Fund will pay you regular monthly income. Your monthly income may vary
because of:
- elimination of one or more bonds from the Fund's portfolio because of calls,
redemptions or sales;
- a change in the Fund's expenses; or
- the failure by a bond's issuer to pay interest.
Changes in interest rates generally will not affect your monthly income because
the portfolio is fixed.
Along with your monthly income, you will receive your share of any available
bond principal.
RETURN FIGURES
We cannot predict your actual return, which will vary with unit price, how long
you hold your investment and changes in the portfolio, interest income and
expenses.
ESTIMATED CURRENT RETURN equals the estimated annual cash to be received from
the bonds in the Fund less estimated annual Fund expenses, divided by the Unit
Price (including the maximum sales fee):
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Estimated Annual Estimated
Interest Income - Annual Expenses
- -------------------------------------
Unit Price
</TABLE>
ESTIMATED LONG TERM RETURN is a measure of the estimated return over the
estimated life of the Fund. Unlike Estimated Current Return, Estimated Long Term
Return reflects maturities, discounts and premiums of the bonds in the Fund. It
is an average of the yields to maturity (or in certain cases, to an earlier call
date) of the individual bonds in the portfolio, adjusted to reflect the Fund's
maximum sales fee and estimated expenses. We calculate the average yield for the
portfolio by weighting each bond's yield by its market value and the time
remaining to the call or maturity date.
Yields on individual bonds depend on many factors including general conditions
of the bond markets, the size of a particular offering and the maturity and
quality rating of the particular issues. Yields can vary among bonds with
similar maturities, coupons and ratings.
These return quotations are designed to be comparative rather than predictive.
RECORDS AND REPORTS
You will receive:
- - a monthly statement of income payments and any principal payments;
- - a notice from the Trustee when new bonds are deposited in exchange or
substitution for bonds originally deposited;
- - an annual report on Fund activity; and
- - annual tax information. THIS WILL ALSO BE SENT TO THE IRS. YOU MUST REPORT THE
AMOUNT OF TAX-EXEMPT INTEREST RECEIVED DURING THE YEAR.
You may request:
- - copies of bond evaluations to enable you to comply with federal and state tax
reporting requirements; and
- - audited financial statements of the Fund.
You may inspect records of Fund transactions at the Trustee's office during
regular business hours.
7
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THE RISKS YOU FACE
INTEREST RATE RISK
Investing involves risks, including the risk that your investment will decline
in value if interest rates rise. Generally, bonds with longer maturities will
change in value more than bonds with shorter maturities. Bonds in the Fund are
more likely to be called when interest rates decline. This would result in early
returns of principal to you and may result in early termination of the Fund. Of
course, we cannot predict how interest rates may change.
CALL RISK
Many bonds can be prepaid or "called" by the issuer before their stated
maturity. For example, some bonds may be required to be called pursuant to
mandatory sinking fund provisions.
Also, an issuer might call its bonds during periods of falling interest rates,
if the issuer's bonds have a coupon higher than current market rates.
An issuer might call its bonds in extraordinary cases, including if:
- it no longer needs the money for the original purpose;
- the project is condemned or sold;
- the project is destroyed and insurance proceeds are used to redeem the
bonds;
- any related credit support expires and is not replaced; or
- interest on the bonds become taxable.
If the bonds are called, your income will decline and you may not be able to
reinvest the money you receive at as high a yield or as long a maturity. An
early call at par of a premium bond will reduce your return.
REDUCED DIVERSIFICATION RISK
If many investors sell their units, the Fund will have to sell bonds. This could
reduce the diversification of your investment and increase your share of Fund
expenses.
LIQUIDITY RISK
The bonds will generally trade in the over-the-counter market. We cannot assure
you that a liquid trading market will exist, especially since current law may
restrict the Fund from selling bonds to any Sponsor. The value of the bonds, and
of your investment, may be reduced if trading in bonds is limited or absent.
CONCENTRATION RISK
When a certain type of bond makes up 25% or more of the portfolio, the Fund is
said to be "concentrated" in that bond type, which makes the Fund less
diversified.
Here is what you should know about the Fund's concentration in housing bonds.
Multi-family housing revenue bonds and single family mortgage revenue bonds are
issued to provide financing for various housing projects. These bonds are
payable primarily from the revenue derived from mortgage loans to housing
projects for low to moderate income familities or notes secured by mortgages on
residences. Repayment of these bonds is dependent upon, among other things:
- occupany levels;
- rental income;
- the default rate on the underlying mortgage loans;
- the ability of mortgage insurers to pay claims;
- the continued availability of federal, state or local housing subsidiary
programs;
- economic conditions in local markets;
8
<PAGE>
- construction costs;
- taxes;
- utility costs;
- the level of operating expenses; and
- the managerial ability of project managers.
Housing bonds generally may be prepaid at any time. Therefore, their average
life will ordinarily be less then their stated maturity.
Here is what you should know about the Fund's concentration in hospital and
health care bonds:
- payment for these bonds depends on revenues from private third-party payors
and government programs, including Medicare and Medicaid, which have
generally undertaken cost containment measures to limit payments to health
care providers;
- hospitals face increasing competition resulting from hospital mergers and
affiliations;
- hospitals need to reduce costs as HMOs increase market penetration and
hospital supply and drug companies raise prices; and
- hospitals and health care providers are subject to various legal claims by
patients and others and are adversely affected by increasing costs of
insurance.
- many hospitals are aggressively buying physician practices and assuming risk
contracts to gain market share. If revenues do not increase accordingly,
this practice could reduce profits;
- Medicare is changing its reimbursement system for nursing homes. Many
nursing home providers are not sure how they will be treated. In many cases,
the providers may receive lower reimbursements and these would have to cut
expenses to maintain profitabilit; and
- most retirement/nursing home providers rely on entrance fees for operating
revenues. If people live longer than expected and turnover is lower than
budgeted, operating revenues would be adversely affected by less than
expected entrance fees.
Changes to the portfolio from bond redemptions, maturities and sales may affect
the Fund's concentration over time.
BOND QUALITY RISK
A reduction in a bond's rating may decrease its value and, indirectly, the value
of your investment in the Fund.
INSURANCE RELATED RISK
Some bonds may be backed by insurance companies (as shown under Portfolio).
Insurance policies generally make payments only according to a bond's original
payment schedule and do not make early payments when a bond defaults or becomes
taxable. Although the federal government does not regulate the insurance
business, various state laws and federal initiatives and tax law changes could
significantly affect the insurance business. The claims-paying ability of the
insurance companies is generally rated A or better by Standard & Poor's or
another nationally recognized rating organization. The insurance company ratings
are subject to change at any time at the discretion of the rating agencies.
LITIGATION AND LEGISLATION RISKS
We do not know of any pending litigation that might have a material adverse
effect upon the Fund.
Future tax legislation could affect the value of the portfolio by:
- limiting real property taxes,
- reducing tax rates,
9
<PAGE>
- imposing a flat or other form of tax, or
- exempting investment income from tax.
SELLING OR EXCHANGING UNITS
You can sell your units at any time for a price based on net asset value. Your
net asset value is calculated each business day by:
- ADDING the value of the bonds, net accrued interest, cash and any other Fund
assets;
- SUBTRACTING accrued but unpaid Fund expenses, unreimbursed Trustee advances,
cash held to buy back units or for distribution to investors and any other
Fund liabilities; and
- DIVIDING the result by the number of outstanding units.
Your net asset value when you sell may be more or less than your cost because of
sales fees, market movements and changes in the portfolio.
SPONSORS' SECONDARY MARKET
While we are not obligated to do so, we will buy back units at net asset value
without any other fee or charge. We may resell the units to other buyers or to
the Trustee. You should consult your financial professional for current market
prices to determine if other broker-dealers or banks are offering higher prices.
We have maintained a secondary market continuously for over 28 years, but we
could discontinue it without prior notice for any business reason.
SELLING UNITS TO THE TRUSTEE
Regardless of whether we maintain a secondary market, you can sell your units to
the Trustee at any time by sending the Trustee a letter (with any outstanding
certificates if you hold unit certificates). You must properly endorse your
certificates (or execute a written transfer instrument with signatures
guaranteed by an eligible institution). Sometimes, additional documents are
needed such as a trust document, certificate of corporate authority, certificate
of death or appointment as executor, administrator or guardian.
Within seven days after your request and the necessary documents are received,
the Trustee will mail a check to you. Contact the Trustee for additional
information.
As long as we are maintaining a secondary market, the Trustee will sell your
units to us at a price based on net asset value. If there is no secondary
market, the Trustee may sell your units in the over-the-counter market for a
higher price, but it is not obligated to do so. In that case, you will receive
the net proceeds of the sale.
If the Fund does not have cash available to pay you for units you are selling,
the agent for the Sponsors will select bonds to be sold. Bonds will be selected
based on market and credit factors. These sales could be made at times when the
bonds would not otherwise be sold and may result in your receiving less than the
unit par value and also reduce the size and diversity of the Fund.
If you acquire 25% or more of the outstanding units of the Fund and you sell
units with a value exceeding $250,000, the Trustee may choose to pay you "in
kind" by distributing bonds and cash with a total value equal to the price of
those units. The Trustee will try to distribute bonds in the portfolio pro rata,
but it reserves the right to distribute only one or a few bonds. The Trustee
will act as your agent in an in kind distribution and will either hold the bonds
for your account or sell them as you instruct. You must pay any transaction
costs
10
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as well as transfer and ongoing custodial fees on sales of bonds distributed in
kind.
There could be a delay in paying you for your units:
- if the New York Stock Exchange is closed (other than customary weekend and
holiday closings);
- if the SEC determines that trading on the New York Stock Exchange is
restricted or that an emergency exists making sale or evaluation of the
bonds not reasonably practicable; and
- for any other period permitted by SEC order.
EXCHANGE OPTION
You may exchange units of certain Defined Asset Funds for units of this Fund at
a maximum exchange fee of 1.50%. You may exchange units of this Fund for units
of certain other funds at a reduced sales fee if your investment goals change.
To exchange units, you should talk to your financial professional about what
funds are exchangeable, suitable and currently available.
Normally, an exchange is taxable and you must recognize any gain or loss on the
exchange. However, the IRS may try to disallow a loss if the portfolios of the
two funds are not materially different; you should consult your own tax adviser.
We may amend or terminate this exchange option at any time without notice.
HOW THE FUND WORKS
PRICING
The price of a unit includes interest accrued on the bonds, less expenses, from
the most recent Record Day up to, but not including, the settlement date, which
is usually three business days after the purchase date of the unit.
A portion of the price of a unit consists of cash so that the Trustee can
provide you with regular monthly income. When you sell your units you will
receive your share of this cash.
In addition, as with mutual funds, the Fund (and therefore the investors) pay
all or some of the costs of organizing the Fund including:
- cost of initial preparation of legal documents;
- federal and state registration fees;
- initial fees and expenses of the Trustee;
- initial audit; and
- legal expenses and other out-of-pocket expenses.
These costs are amortized over the first five years of the Fund.
EVALUATIONS
An independent Evaluator values the bonds on each business day (excluding
Saturdays, Sundays and the following holidays as observed by the New York Stock
Exchange: New Year's Day, Presidents' Day, Martin Luther King, Jr. Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas).
Bond values are based on current bid or offer prices for the bonds or comparable
bonds. In the past, the difference between bid and offer prices of publicly
offered tax-exempt bonds has ranged from 0.5% of face amount on actively traded
issues to 3.5% on inactively traded issues; the difference has averaged between
1 and 2%.
INCOME
The Trustee credits interest to an Income Account and other receipts to a
Capital Account. The Trustee may establish a
11
<PAGE>
Reserve Account by withdrawing from these accounts amounts it considers
appropriate to pay any material liability. These accounts do not bear interest.
EXPENSES
The Trustee is paid monthly. It also benefits when it holds cash for the Fund in
non-interest bearing accounts. The Trustee may also receive additional amounts:
- to reimburse the Trustee for the Fund's operating expenses;
- for extraordinary services and costs of indemnifying the Trustee and the
Sponsors;
- costs of actions taken to protect the Fund and other legal fees and
expenses;
- expenses for keeping the Fund's registration statement current; and
- Fund termination expenses and any governmental charges.
The Sponsors are currently reimbursed up to 55 CENTS per $1,000 face amount
annually for providing portfolio supervisory, bookkeeping and administrative
services and for any other expenses properly chargeable to the Fund. Legal,
typesetting, electronic filing and regulatory filing fees and expenses
associated with updating the Portfolio's registration statement yearly are also
now chargeable to the Portfolio. While this fee may exceed the amount of these
costs and expenses attributable to this Fund, the total of these fees for all
Series of Defined Asset Funds will not exceed the aggregate amount attributable
to all of these Series for any calendar year. The Fund also pays the Evaluator's
fees.
The Trustee's, Sponsors' and Evaluator's fees may be adjusted for inflation
without investors' approval.
The Sponsors will pay advertising and selling expenses at no charge to the Fund.
If Fund expenses exceed initial estimates, the Fund will owe the excess. The
Trustee has a lien on Fund assets to secure reimbursement of Fund expenses and
may sell bonds if cash is not available.
PORTFOLIO CHANGES
The Sponsors and Trustee are not liable for any default or defect in a bond.
Unlike a mutual fund, the portfolio is designed to remain intact and we may keep
bonds in the portfolio even if their credit quality declines or other adverse
financial circumstances occur. However, we may sell a bond in certain cases if
we believe that certain adverse credit conditions exist or if a bond becomes
taxable.
If we maintain a secondary market in units but are unable to sell the units that
we buy in the secondary market, we will redeem units, which may affect the
composition of the portfolio. Units offered in the secondary market may not
represent the same face amount of bonds that they did originally.
We decide whether or not to offer units for sale that we acquire in the
secondary market after reviewing:
- diversity of the portfolio;
- size of the Fund relative to its original size;
- ratio of Fund expenses to income;
- current and long-term returns;
- degree to which units may be selling at a premium over par; and
- cost of maintaining a current prospectus.
FUND TERMINATION
The Fund will terminate following the stated maturity or sale of the last bond
in the portfolio. The Fund may also terminate earlier with the consent of
investors holding 51% of the units or if total assets of the
12
<PAGE>
Fund have fallen below 40% of the face amount of bonds deposited. We will decide
whether to terminate the Fund early based on the same factors used in deciding
whether or not to offer units in the secondary market.
When the Fund is about to terminate you will receive a notice, and you will be
unable to sell your units after that time. On or shortly before termination, we
will sell any remaining bonds, and you will receive your final distribution. Any
bond that cannot be sold at a reasonable price may continue to be held by the
Trustee in a liquidating trust pending its final sale.
You will pay your share of the expenses associated with termination, including
brokerage costs in selling bonds. This may reduce the amount you receive as your
final distribution.
CERTIFICATES
Certificates for units are issued on request. You may transfer certificates by
complying with the requirements for redeeming certificates, described above. You
can replace lost or mutilated certificates by delivering satisfactory indemnity
and paying the associated costs.
TRUST INDENTURE
The Fund is a "unit investment trust" governed by a Trust Indenture, a contract
among the Sponsors, the Trustee and the Evaluator, which sets forth their duties
and obligations and your rights. A copy of the Indenture is available to you on
request to the Trustee. The following summarizes certain provisions of the
Indenture.
The Sponsors and the Trustee may amend the Indenture without your consent:
- to cure ambiguities;
- to correct or supplement any defective or inconsistent provision;
- to make any amendment required by any governmental agency; or
- to make other changes determined not to be materially adverse to your best
interest (as determined by the Sponsors).
Investors holding 51% of the units may amend the Indenture. Every investor must
consent to any amendment that changes the 51% requirement. No amendment may
reduce your interest in the Fund without your written consent.
The Trustee may resign by notifying the Sponsors. The Sponsors may remove the
Trustee without your consent if:
- it fails to perform its duties and the Sponsors determine that its
replacement is in your best interest; or
- it becomes incapable of acting or bankrupt or its affairs are taken over by
public authorities.
Investors holding 51% of the units may remove the Trustee. The Evaluator may
resign or be removed by the Sponsors and the Trustee without the consent of
investors. The resignation or removal of either becomes effective when a
successor accepts appointment. The Sponsors will try to appoint a successor
promptly; however, if no successor has accepted within 30 days after notice of
resignation, the resigning Trustee or Evaluator may petition a court to appoint
a successor.
Any Sponsor may resign as long as one Sponsor with a net worth of $2 million
remains and agrees to the resignation. The remaining Sponsors and the Trustee
may appoint a replacement. If there is only one Sponsor and it fails to perform
its duties or becomes bankrupt the Trustee may:
13
<PAGE>
- remove it and appoint a replacement Sponsor;
- liquidate the Fund; or
- continue to act as Trustee without a Sponsor.
Merrill Lynch, Pierce, Fenner & Smith Incorporated acts as agent for the
Sponsors.
The Trust Indenture contains customary provisions limiting the liability of the
Trustee, the Sponsors and the Evaluator.
LEGAL OPINION
Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017, as
special counsel for the Sponsors, has given an opinion that the units are
validly issued.
AUDITORS
Deloitte & Touche LLP, 2 World Financial Center, New York, New York 10281,
independent accountants, audited the Statement of Condition included in this
prospectus.
SPONSORS
The Sponsors are:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (a wholly-owned subsidiary of
Merrill Lynch & Co., Inc.)
P.O. Box 9051,
Princeton, NJ 08543-9051
SALOMON SMITH BARNEY INC. (an indirectly wholly-owned subsidiary of Citigroup
Inc.)
388 Greenwich Street--23rd Floor,
New York, NY 10013
DEAN WITTER REYNOLDS INC. (a principal operating subsidiary of Morgan Stanley
Dean Witter & Co.)
Two World Trade Center--59th Floor,
New York, NY 10048
PAINEWEBBER INCORPORATED (a wholly-owned subsidiary of PaineWebber Group Inc.)
1285 Avenue of the Americas,
New York, NY 10019
Each Sponsor is a Delaware corporation and it, or its predecessor, has acted as
sponsor to many unit investment trusts. As a registered broker-dealer each
Sponsor buys and sells securities (including investment company shares) for
others (including investment companies) and participates as an underwriter in
various selling groups.
TRUSTEE
The Chase Manhattan Bank, Unit Investment Trust Department, 4 New York
Plaza--6th Floor, New York, New York 10004, is the Trustee. It is supervised by
the Federal Deposit Insurance Corporation, the Board of Governors of the Federal
Reserve System and New York State banking authorities.
14
<PAGE>
UNDERWRITERS' AND SPONSORS' PROFITS
Underwriters receive sales charges when they sell units. The Sponsors also
realized a profit or loss on the initial deposit of the bonds. Any cash made
available by you to the Sponsors before the settlement date for those units may
be used in the Sponsors' businesses to the extent permitted by federal law and
may benefit the Sponsors.
A Sponsor or Underwriter may realize profits or sustain losses on bonds in the
Fund which were acquired from underwriting syndicates of which it was a member.
In maintaining a secondary market, the Sponsors will also realize profits or
sustain losses in the amount of any difference between the prices at which they
buy units and the prices at which they resell or redeem them.
PUBLIC DISTRIBUTION
The Sponsors do not intend to qualify units for sale in any foreign countries.
This prospectus does not constitute an offer to sell units in any country where
units cannot lawfully be sold.
CODE OF ETHICS
The Fund and the Agent for the Sponsors have each adopted a code of ethics
requiring reporting of personal securities transactions by its employees with
access to information on Fund transactions. Subject to certain conditions, the
codes permit employees to invest in Fund securities for their own accounts. The
codes are designed to prevent fraud, deception and misconduct against the Fund
and to provide reasonable standards of conduct. These codes are on file with the
Commission and you may obtain a copy by contacting the Commission at the address
listed on the back cover of this prospectus.
YEAR 2000 ISSUES
Many computer systems were designed in such a way that they may be unable to
distinguish between the year 2000 and the year 1900 (commonly known as the "Year
2000 Problem"). To date we are not aware of any major operational difficulties
resulting from the computer system changes necessary to prepare for the Year
2000. However, there can be no assurance that the Year 2000 Problem will not
adversely affect the issuers of the bonds contained in the Portfolio. We cannot
predict whether any impact will be material to the Fund as a whole.
TAXES
The following summary describes some of the important income tax consequences of
holding units. It assumes that you are not a dealer, financial institution,
insurance company or other investor with special circumstances or subject to
special rules. You should consult your own tax adviser about your particular
circumstances.
At the date of issue of each bond, counsel for the issuer delivered an opinion
to the effect that interest on the bond is exempt from regular federal income
tax. However, interest may be subject to state and local taxes and be taken into
account in determining your preference items for alternative minimum tax
purposes. Neither we nor our counsel have reviewed the issuance of the bonds,
related proceedings or the basis for the opinions of counsel for the issuers. We
cannot assure you that the issuer (or other users) have complied or will comply
with any requirements necessary for a bond to be tax-exempt. If any of the bonds
were determined not to be tax-
15
<PAGE>
exempt, you could be required to pay income tax for current and prior years, and
if the Fund were to sell the bond, it might have to sell it at a substantial
discount.
In the opinion of our counsel, under existing law:
GENERAL TREATMENT OF THE FUND AND YOUR INVESTMENT
The Fund will not be taxed as a corporation for federal income tax purposes, and
you will be considered to own directly your share of each bond in the Fund.
GAIN OR LOSS UPON DISPOSITION
When all or part of your share of a bond is disposed of (for example, when the
Fund sells, exchanges or redeems a bond or when you sell or exchange your
units), you will generally recognize capital gain or loss. Your gain, however,
will generally be ordinary income to the extent of any accrued "market
discount". Generally you will have market discount to the extent that your basis
in a bond when you purchase a unit is less than its stated redemption price at
maturity (or, if it is an original issue discount bond, the issue price
increased by original issue discount that has accrued on the bond before your
purchase). You should consult your tax adviser in this regard.
If your net long-term capital gains exceed your net short-term capital losses,
the excess may be subject to tax at a lower rate than ordinary income. Any
capital gain from the Fund will be long-term if you are considered to have held
your investment on each bond for more than one year and short-term otherwise. If
you are an individual and sell your units after holding them for more than one
year, you may be entitled to a 20% maximum federal tax rate on any resulting
gains. Because the deductibility of capital losses is subject to limitations,
you may not be able to deduct all of your capital losses. Consult your tax
adviser in this regard.
YOUR BASIS IN THE BONDS
Your aggregate basis in the bonds will be equal to the cost of your units,
including any sales charges and the organizational expenses you pay, adjusted to
reflect any accruals of "original issue discount," "acquisition premium" and
"bond premium". You should consult your tax adviser in this regard.
EXPENSES
If you are not a corporate investor, you will not be entitled to a deduction for
your share of fees and expenses of the Fund. Also, if you borrowed money in
order to purchase or carry your units, you will not be able to deduct the
interest on this borrowing for federal income tax purposes. The IRS may treat
your purchase of units as made with borrowed money even if the money is not
directly traceable to the purchase of units.
STATE AND LOCAL TAXES
Under the income tax laws of the State and City of New York, the Fund will not
be taxed as a corporation. If you are a New York taxpayer, your income from the
Fund will not be tax-exempt in New York except to the extent that the income is
earned on bonds that are tax-exempt for New York purposes. Depending on where
you live, your income from the Fund may be subject to state and local taxation.
You should consult your tax adviser in this regard.
16
<PAGE>
SUPPLEMENTAL INFORMATION
You can receive at no cost supplemental information about the Fund by calling
the Trustee. The supplemental information includes more detailed risk disclosure
about the types of bonds that may be in the Fund's portfolio, general risk
disclosure concerning any insurance securing certain bonds, and general
information about the structure and operation of the Fund. The supplemental
information is also available from the SEC.
17
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
INTERMEDIATE TERM SERIES - 312,
DEFINED ASSET FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsors, Trustee and Holders of Municipal Investment Trust Fund,
Intermediate Term Series - 312, Defined Asset Funds:
We have audited the accompanying statement of condition of Municipal
Investment Trust Fund, Intermediate Term Series - 312, Defined Asset
Funds, including the portfolio, as of January 31, 2000 and the related
statements of operations and of changes in net assets for the year
ended January 31, 2000 and the period February 7, 1998 to January 31,
1999. These financial statements are the responsibility of the
Trustee. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. Securities owned at January 31, 2000, as shown
in such portfolio, were confirmed to us by The Chase Manhattan Bank,
the Trustee. An audit also includes assessing the accounting
principles used and significant estimates made by the Trustee, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Municipal
Investment Trust Fund, Intermediate Term Series - 312, Defined Asset
Funds at January 31, 2000 and the results of its operations and
changes in its net assets for the above-stated periods in conformity
with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, N.Y.
April 5, 2000
D - 1.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
INTERMEDIATE TERM SERIES - 312,
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
As of January 31, 2000
<TABLE>
<S> <C> <C>
TRUST PROPERTY:
Investment in marketable securities -
at value (cost $ 11,574,024 )(Note 1)........ $11,096,747
Proceeds receivable from sale of securities .... 132,020
Accrued interest ............................... 119,715
Accrued interest on Segregated Bonds (Note 5) .. 2,607
Cash - income .................................. 2,805
Cash - income on Segregated Bonds .............. 17,858
Cash - principal ............................... 88,933
Deferred organization costs (Note 6) ........... 7,600
-----------
Total trust property ......................... 11,468,285
LESS LIABILITIES:
Income advance from Trustee..................... $ 91,295
Deferred sales charge (Note 5) ................. 130,432
Principal payments payable (Segregated Bonds) .. 3,398
Redemption payable ............................. 133,268
Accrued Sponsors' fees ......................... 533
Other liabilities (Note 6) ..................... 7,600 366,526
----------- -----------
NET ASSETS, REPRESENTED BY:
11,458 units of fractional undivided
interest outstanding (Note 3)................ 11,071,458
Undistributed net investment income ............ 30,301 $11,101,759
----------- ===========
UNIT VALUE ($ 11,101,759 / 11,458 units )......... $ 968.91
===========
</TABLE>
See Notes to Financial Statements.
D - 2.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
INTERMEDIATE TERM SERIES - 312,
DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
February 7, 1998
Year Ended to
January 31, January 31,
2000 1999
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Interest income ........................ $ 546,572 $ 560,235
Interest income on Segregated
Bonds (Note 5) ....................... 8,295 12,170
Trustee's fees and expenses ............ (14,355) (9,593)
Sponsors' fees ......................... (5,517) (5,665)
------------------------------
Net investment income .................. 534,995 557,147
------------------------------
REALIZED AND UNREALIZED LOSS
ON INVESTMENTS:
Realized gain (loss) on
securities sold or redeemed .......... (19,162) 2,082
Unrealized appreciation (depreciation)
of investments ....................... (571,828) 94,551
------------------------------
Net realized and unrealized
gain (loss) on investments .......... (590,990) 96,633
------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS .............. $ (55,995) $ 653,780
==============================
</TABLE>
See Notes to Financial Statements.
D - 3.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
INTERMEDIATE TERM SERIES - 312,
DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
February 7, 1998
Year Ended to
January 31, January 31,
2000 1999
---- ----
<S> <C> <C>
OPERATIONS:
Net investment income .................. $ 534,995 $ 557,147
Realized gain (loss) on
securities sold or redeemed .......... (19,162) 2,082
Unrealized appreciation (depreciation)
of investments ....................... (571,828) 94,551
------------------------------
Net increase (decrease) in net assets
resulting from operations ............ (55,995) 653,780
------------------------------
INCOME DISTRIBUTIONS TO
HOLDERS (Note 2)........................ (526,409) (512,281)
------------------------------
SHARE TRANSACTIONS:
Deferred sales charge (Note 5):
Principal ............................ (171,612) (141,309)
Redemption amounts:
Income ............................... (1,353) (1,333)
Principal ............................ (630,246) (515,609)
------------------------------
Net share transactions ................. (803,211) (658,251)
------------------------------
NET DECREASE IN NET ASSETS ............... (1,385,615) (516,752)
NET ASSETS AT BEGINNING OF PERIOD ........ 12,487,374 13,004,126
------------------------------
NET ASSETS AT END OF PERIOD .............. $11,101,759 $12,487,374
==============================
PER UNIT:
Income distributions during
period ............................... $ 44.44 $ 41.08
==============================
Net asset value at end of
period ............................... $ 968.91 $ 1,032.18
==============================
TRUST UNITS:
Redeemed during period ................. 640 510
Outstanding at end of period ........... 11,458 12,098
==============================
</TABLE>
See Notes to Financial Statements.
D - 4.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
INTERMEDIATE TERM SERIES - 312,
DEFINED ASSET FUNDS
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as a
Unit Investment Trust. The following is a summary of significant
accounting policies consistently followed by the Fund in the
preparation of its financial statements. The policies are in
conformity with generally accepted accounting principles.
(A) Securities are stated at value as determined by the
Evaluator based on bid side evaluations for the securities
except that value on February 7, 1998 was based upon
offering side evaluations at February 5, 1998, the day prior
to the Date of Deposit. Cost of securities at February 7,
1998 was also based on such offering side evaluations.
(B) The Fund is not subject to income taxes. Accordingly, no
provision for such taxes is required.
(C) Interest income is recorded as earned.
2. DISTRIBUTIONS
A distribution of net investment income is made to Holders each month.
Receipts other than interest, after deductions for redemptions and
applicable expenses, are also distributed periodically.
3. NET CAPITAL
<TABLE>
<S> <C>
Cost of 11,458 units at Date of Deposit .................... $11,817,995
Transfer to capital of interest on Segregated Bonds (Note 5) 20,465
Redemptions of units - net cost of 1,150 units redeemed
less redemption amounts (principal)....................... 40,276
Deferred sales charge (Note 5) ............................. (312,921)
Realized loss on securities sold or redeemed ............... (17,080)
Net unrealized depreciation of investments.................. (477,277)
-----------
Net capital applicable to Holders .......................... $11,071,458
===========
</TABLE>
4. INCOME TAXES
As of January 31, 2000, net unrealized appreciation of investments,
based on cost for Federal income tax purposes, aggregated $477,277, of
which $477,313 related to depreciated securities and $36 related to
appreciated securities. The cost of investment securities for Federal
income tax purposes was $11,574,024 at January 31, 2000.
D - 5.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
INTERMEDIATE TERM SERIES - 312,
DEFINED ASSET FUNDS
NOTES TO FINANCIAL STATEMENTS
5. DEFERRED SALES CHARGE
$105,000 face amount of the Town of Silverthorne, Summit Cnty., CO,
Excise Tax Rev. Bonds, Ser. 1998 and $100,000 face amount of New York
State Urban Dev. Corp., Youth Fac. Svc. Contract Rev. Bonds, Ser. A,
have been segregated to fund the deferred sales charges. The sales
charges are being paid for with the interest received and by periodic
sales or maturity of these bonds, as well as with principal proceeds
received in conjunction with the dispositon on the unsegregated bonds
in the portfolio. A deferred sales charge of $3.50 per Unit is charged
on a quarterly basis, and paid to the Sponsors periodically by the
Trustee on behalf of the Holders, up to an aggregate of $28.00 per
Unit over the first two years of the life of the Fund. Should a Holder
redeem Units prior to the second anniversary of the Fund, the
remaining balance of the deferred sales charge will be charged.
6. DEFERRED ORGANIZATION COSTS
Deferred organization costs are being amortized over five years.
Included in "Other liabilities" on the Statement of Condition is
$7,600 payable to the Trustee for reimbursement of costs related to
the organization of the Trust.
D - 6.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
INTERMEDIATE TERM SERIES - 312,
DEFINED ASSET FUNDS
PORTFOLIO
As of January 31, 2000
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost(2) Value(2)
---------- --------- ----------- ----------- ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 The Health Care Auth. of Athens and AA $ 1,000,000 4.300 % 2004 None $ 997,230 $ 945,610
Limestone Cnty., AL, Hosp. Tax
Anticipation and Rev. Bonds, Ser. 1998
(Asset Guaranty Ins.) (4)
2 Arkansas Dev. Fin. Auth., Econ. Dev. AAA 120,000 4.550 2002 None 121,266 117,548
Rev. Bonds (ADFA Guaranty Prog.), Ser.
1998 (AMBAC Ins.) (AMT) (4)(5) 175,000 4.750 2004 None 177,506 168,432
3 Town of Silverthorne, Summit Cnty., CO, AAA 105,000(6) 3.850 2000 None 104,886 104,922
Excise Tax Rev. Bonds, Ser. 1998 (FSA
Ins.) (4)
4 Illinois Hlth. Fac. Auth., Rev. Rfdg. A- 400,000 4.500 2003 None 400,000 381,008
Bonds (Covenant Retirement Cmnty.,
Inc.), Ser. 1998 170,000 4.600 2004 None 170,000 159,654
5 The Vil. of McCook, IL, Rev. Bonds (The AA- 1,335,000 5.100 2004(7) 12/01/04 1,358,429 1,278,009
British Home for Retired Men and Women @ 100.000
Proj.), Ser. 1989 (LaSalle National
Bank, Chicago, IL - Letter of Credit) (8)
6 Indiana Hlth. Fac. Fin. Auth., Hosp. A-(f) 550,000 4.500 2004 None 550,000 520,273
Rev. Rfdg. Bonds (Jackson Cnty. Schneck
Mem. Hosp. Proj.), Ser. 1998 650,000 4.600 2005 None 650,000 607,081
7 East-Union Cmnty. Sch. Bldg. Corp. A+ 10,000 4.200 2001 None 10,014 9,949
(Boone Cnty., IN), First Mtge. Bonds,
Ser. 1998 40,000 4.200 2001 None 40,062 39,558
40,000 4.300 2002 None 40,071 39,406
40,000 4.300 2002 None 40,079 39,231
</TABLE>
D - 7.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
INTERMEDIATE TERM SERIES - 312,
DEFINED ASSET FUNDS
PORTFOLIO
As of January 31, 2000
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost(2) Value(2)
---------- --------- ----------- ----------- ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
8 Porter Cnty., IN, Hosp. Association, (b) $ 100,000 4.900 % 2003 None $ 101,255 $ 96,228
Hosp. Rev. Rfdg. Bonds, Ser. 1997
120,000 4.950 2004 None 121,376 113,802
9 School City of Mishawaka Multi-School A 330,000 4.200 2001 None 330,446 328,241
Bldg. Corp. (St. Joseph Cnty., IN),
First Mtge. Bonds, Ser. 1998 130,000 4.200 2001 None 130,203 128,236
10 City of Grosse Pointe Park, Cnty. of (b) 150,000 4.700 2005(7) 09/01/05 150,468 145,130
Wayne, MI, Ltd. Tax Gen. Oblig. Bonds, @ 100.000
Ser. 1998 A
160,000 4.700 2005(7) 09/01/05 160,499 154,805
@ 100.000
170,000 4.700 2005(7) 09/01/05 170,530 164,480
@ 100.000
11 New Hampshire Hsg. Fin. Auth., Single Aa3(m) 420,000 4.550 2003 None 420,000 409,618
Family Mtge. Acquisition Rev. Bonds,
Ser. 1998 A (AMT)(5)
440,000 4.650 2004 None 440,000 428,679
12 New York State Urban Dev. Corp. A(f) 100,000(6) 4.250 2000 None 100,404 99,982
Correctional Facs. Svc. Contract, Rev.
Bonds Ser. A 340,000 4.250 2002 None 340,000 334,533
185,000 4.500 2004 None 185,483 179,385
13 Ohio Hsg. Fin. Agy., Residential Mtge. AAA 995,000 4.650 2005 None 996,532 962,981
Rev. Bonds, Ser 1998 A-1 (AMT) (5)
14 Oklahoma Hsg. Fin. Dev. Aith., Sub. A 1,000,000 4.800 2002 None 1,006,350 982,050
Rev. Oblig. (Lease Purchase Prog.),
Ser. 1997 B
</TABLE>
D - 8.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
INTERMEDIATE TERM SERIES - 312,
DEFINED ASSET FUNDS
PORTFOLIO
As of January 31, 2000
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost(2) Value(2)
---------- --------- ----------- ----------- ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
15 Harrision Cnty., TX, Hlth. Fac. Dev. A $ 250,000 4.650 % 2004 None $ 250,628 $ 238,613
Corp., Hosp. Rev. Bonds (Marshall Regl.
Med. Ctr. Proj.), Ser. 1998 (ACA Ins.)
(4) 965,000 4.700 2005 None 967,779 907,679
16 Ind. Dev. Auth. of Halifax, VA, Exempt (c) 1,025,000 4.900 2002 None 1,042,528 1,011,624
Fac. Rfdg. Rev. Bonds (Old Dominion
Elec. Coop. Proj.) Ser. 1997 (AMT) (5)
---------- ---------- ----------
TOTAL $11,515,000 $11,574,024 $11,096,747
========== ========== ==========
</TABLE>
See Notes to Portfolio.
D - 9.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
INTERMEDIATE TERM SERIES - 312,
DEFINED ASSET FUNDS
NOTES TO PORTFOLIO
As of January 31, 2000
(1) The ratings are of the bonds themselves by Standard & Poor's Ratings
Group, or by Moody's Investors Service, Inc if followed by "(m)", or
by Fitch Investors Service, Inc if followed by "(f)"; "(a)" indicates
that it is a rating of the outstanding debt obligations of the
institution providing the letter of credit or guarantee; "(b)"
indicates that while there is no such available rating, in the opinion
of Defined Asset Funds research analysts, the bond has credit
characteristics comparable to bonds rated "A" or better; "(c)"
indicates that while there is no such available rating, in the opinion
of Defined Asset Funds research analysts, the bond does not have
credit characteristics comparable to bonds rated "A" or better. Bond
ratings have been furnished by the Evaluator but not confirmed with
the rating agencies.
(2) See Notes to Financial Statements.
(3) Optional redemption provisions, which may be exercised in whole or in
part, are initially at prices of par plus a premium, then subsequently
at prices declining to par. Certain securities may provide for
redemption at par prior or in addition to any optional or mandatory
redemption dates or maturity, for example, through the operation of a
maintenance and replacement fund, if proceeds are not able to be used
as contemplated, the project is condemned or sold or the project is
destroyed and insurance proceeds are used to redeem the securities.
Many of the securities are also subject to mandatory sinking fund
redemption commencing on dates which may be prior to the date on which
securities may be optionally redeemed. Sinking fund redemptions are at
par and redeem only part of the issue. Some of the securities have
mandatory sinking funds which contain optional provisions permitting
the issuer to increase the principal amount of securities called on a
mandatory redemption date. The sinking fund redemptions with optional
provisions may, and optional refunding redemptions generally will,
occur at times when the redeemed securities have an offering side
evaluation which represents a premium over par. To the extent that the
securities were acquired at a price higher than the redemption price,
this will represent a loss of capital when compared with the Public
Offering Price of the Units when acquired. Distributions will
generally be reduced by the amount of the income which would otherwise
have been paid with respect to redeemed securities and there will be
distributed to Holders any principal amount and premium received on
such redemption after satisfying any redemption requests for Units
received by the Fund. The estimated current return may be affected by
redemptions.
(4) Insured by the indicated municipal bond insurance company.
(5) Securities that are tax preference items for purposes of the
Alternative Minimum Tax are indicated by "(AMT)".
(6) These bonds have been segregated to fund the deferred sales charges.
D - 10.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
INTERMEDIATE TERM SERIES - 312,
DEFINED ASSET FUNDS
NOTES TO PORTFOLIO
As of January 31, 2000
(7) The debt obligation in Portfolio Number 5 has a stated maturity date
of 2014 and the debt obligations in Portfolio Number 10 have stated
maturity dates of 2009, 2011 and 2012. However, the Trustee, as the
holder of these debt obligations, has the right to cause such debt
obligation to be repurchased or redeemed at par on the specific date
indicated. In certain instances, the corporate obligor of such debt
obligation has the right to cause a third party to purchase the debt
obligation in lieu of redemptions. The Sponsors have given irrevocable
instructions to the Trustee to exercise its right to cause such debt
obligations to be so redeemed, repurchased or purchased, unless it can
be sold, in the opinion of the Trustee, for a net amount in excess of
par before such time as the Trustee is required to exercise such
rights.
(8) Certain bonds are covered by letters of credit which may expire prior
to the maturity of the bonds. Upon expiration of a letter of credit,
the issuer of the bond is obligated to obtain a replacement letter of
credit or call the bond.
D - 11.
<PAGE>
DEFINED ASSET FUNDS--REGISTERED TRADEMARK--
<TABLE>
<S> <C>
HAVE QUESTIONS ? MUNICIPAL INVESTMENT TRUST FUND
Request the most recent free INTERMEDIATE TERM SERIES--312
Information Supplement (A Unit Investment Trust)
that gives more details about ---------------------------------------
the Fund, by calling: This Prospectus does not contain
The Chase Manhattan Bank complete information about the
1-800-323-1508 investment company filed with the
Securities and Exchange Commission in
Washington, D.C. under the:
- Securities Act of 1933 (file no.
333-40345) and
- Investment Company Act of 1940 (file
no. 811-1777).
TO OBTAIN COPIES AT PRESCRIBED RATES--
WRITE: Public Reference Section of the
Commission
450 Fifth Street, N.W., Washington,
D.C. 20549-6009
CALL: 1-800-SEC-0330.
VISIT: http://www.sec.gov.
---------------------------------------
No person is authorized to give any
information or representations about
this Fund not contained in this
Prospectus or the Information
Supplement, and you should not rely on
any other information.
---------------------------------------
When units of this Fund are no longer
available, this Prospectus may be used
as a preliminary prospectus for a
future series, but some of the
information in this Prospectus will be
changed for that series.
UNITS OF ANY FUTURE SERIES MAY NOT BE
SOLD NOR MAY OFFERS TO BUY BE ACCEPTED
UNTIL THAT SERIES HAS BECOME EFFECTIVE
WITH THE SECURITIES AND EXCHANGE
COMMISSION. NO UNITS CAN BE SOLD IN ANY
STATE WHERE A SALE WOULD BE ILLEGAL.
11369--5/00
</TABLE>
