DEFINED ASSET FUNDS--REGISTERED TRADEMARK--
----------------------------------------------------
MUNICIPAL INVESTMENT TRUST FUND
MULTISTATE SERIES--218
(A UNIT INVESTMENT TRUST)
- NEW YORK INSURED AND NEW YORK PORTFOLIOS
- PORTFOLIOS OF LONG-TERM MUNICIPAL BONDS
- DESIGNED FOR INCOME FREE FROM REGULAR FEDERAL
INCOME TAX
- EXEMPT FROM SOME STATE TAXES
- MONTHLY DISTRIBUTIONS
SPONSORS:
MERRILL LYNCH,
PIERCE, FENNER & SMITH
INCORPORATED -----------------------------------------------------
SALOMON SMITH BARNEY INC. The Securities and Exchange Commission has not
PRUDENTIAL SECURITIES approved or disapproved these Securities or passed
INCORPORATED upon the adequacy of this prospectus. Any
PAINEWEBBER INCORPORATED representation to the contrary is a criminal offense.
DEAN WITTER REYNOLDS INC. Prospectus dated January 28, 2000.
<PAGE>
- --------------------------------------------------------------------------------
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 SEPTEMBER 30, 1999, THE
EVALUATION DATE.
CONTENTS
PAGE
---
New York Insured
Portfolio--
Risk/Return Summary.... 3
New York
Portfolio--Risk/Return
Summary................ 6
What You Can Expect From
Your Investment........ 10
Monthly Income......... 10
Return Figures......... 10
Records and Reports.... 10
The Risks You Face....... 10
Interest Rate Risk..... 10
Call Risk.............. 11
Reduced Diversification
Risk................. 11
Liquidity Risk......... 11
Concentration Risk..... 11
State Concentration
Risk................. 12
Bond Quality Risk...... 12
Insurance Related
Risk................. 12
Litigation and
Legislation Risks.... 12
Selling or Exchanging
Units.................. 13
Sponsors' Secondary
Market............... 13
Selling Units to the
Trustee.............. 13
Exchange Option........ 14
How The Fund Works....... 14
Pricing................ 14
Evaluations............ 14
Income................. 15
Expenses............... 15
Portfolio Changes...... 15
Fund Termination....... 16
Certificates........... 16
Trust Indenture........ 16
Legal Opinion.......... 17
Auditors............... 17
Sponsors............... 17
Trustee................ 18
Underwriters' and
Sponsors' Profits.... 18
Public Distribution.... 18
Code of Ethics......... 18
Year 2000 Issues....... 18
Taxes.................... 18
Supplemental
Information............ 20
Financial Statements..... D-1
2
<PAGE>
- --------------------------------------------------------------------------------
NEW YORK INSURED PORTFOLIO--RISK/RETURN SUMMARY
1. WHAT IS THE FUND'S
OBJECTIVE?
The Fund seeks interest
income that is exempt
from regular federal
income taxes and some
state and local taxes by
investing in a fixed
portfolio consisting
primarily of insured,
long term municipal
revenue bonds.
2. WHAT ARE MUNICIPAL
REVENUE BONDS?
Municipal revenue bonds
are bonds issued by
states, municipalities
and public authorities to
finance the cost of
buying, building or
improving various
projects intended to
generate revenue, such as
airports, health care
facilities, housing and
municipal electric, water
and sewer utilities.
Generally, payments on
these bonds depend solely
on the revenues generated
by the projects, excise
taxes or state
appropriations, and are
not backed by the
government's taxing
power.
3. WHAT IS THE FUND'S
INVESTMENT STRATEGY?
- The Fund plans to hold to
maturity 7 long-term
tax-exempt municipal
bonds with an aggregate
face amount of
$4,205,000.
- The Fund is a unit
investment trust which
means that, unlike a
mutual fund, the
Portfolio is not managed.
- The bonds are rated AAA
or Aaa by Standard &
Poor's, Moody's or Fitch.
- 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.
- 100% of the bonds are
insured by insurance
companies that guarantee
timely payments of
principal and interest on
the bonds (but not Fund
units or the market value
of the bonds before they
mature).
The Portfolio consists of
municipal bonds of the
following types:
<TABLE>
/ / Hospital/Health Care 11%
<S> <C>
/ / Industrial Development
Revenue 33%
/ / Lease Rental Appropriation 22%
/ / Miscellaneous 18%
/ / Municipal Electric Utilities 16%
</TABLE>
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
industrial development
revenue bonds, adverse
developments in this
sector 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.
ALSO, THE PORTFOLIO IS
CONCENTRATED IN BONDS OF
NEW YORK SO IT IS LESS
DIVERSIFIED THAN A
NATIONAL FUND AND IS
SUBJECT TO RISKS
PARTICULAR TO NEW YORK
WHICH ARE BRIEFLY
DESCRIBED UNDER STATE
CONCENTRATION RISKS LATER
IN THIS PROSPECTUS.
3
<PAGE>
5. IS THIS FUND APPROPRIATE
FOR YOU?
Yes, if you want
federally tax-free
income. You will benefit
from a professionally
selected and supervised
portfolio whose risk is
reduced by investing in
insured bonds of several
different issuers.
The Fund is NOT
appropriate for you if
you want a speculative
investment that changes
to take advantage of
market movements, if you
do not want a
tax-advantaged investment
or if you cannot tolerate
any risk.
DEFINING YOUR INCOME
WHAT YOU MAY EXPECT (Payable on the 25th day
of the month to holders of record on the
10th day of the month):
Regular Monthly Income per unit $ 4.32
Annual Income per unit: $51.87
THESE FIGURES ARE ESTIMATES DETERMINED ON THE EVALUATION DAY; ACTUAL
PAYMENTS MAY VARY.
<TABLE>
<C> <S>
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay,
directly or indirectly, when you invest in the Fund.
INVESTOR FEES
Maximum Sales Fee (Load) on new
purchases (as a percentage of
$1,000 invested) 2.90%
Employees of some of the Sponsors and their affiliates
may pay a reduced sales fee of no less than $5.00 per
unit.
The maximum sales fee is reduced if you invest at
least $100,000, as follows:
</TABLE>
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
-------------- ------------
Less than $100,000 2.90%
$100,000 to $249,999 2.65%
$250,000 to $499,999 2.40%
$500,000 to $999,999 2.15%
$1,000,000 and over 1.90%
Maximum Exchange Fee 1.90%
ESTIMATED ANNUAL FUND
OPERATING EXPENSES
<TABLE>
<CAPTION>
AMOUNT
PER UNIT
--------
<C> <S> <C>
$0.69
Trustee's Fee
$0.55
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses)
$0.30
Evaluator's Fee
$0.20
Organization Costs
$0.39
Other Operating Expenses
-----
$2.13
TOTAL
</TABLE>
The Sponsors historically
paid organization costs
and updating expenses.
7. HOW HAVE SIMILAR FUNDS
PERFORMED IN THE PAST?
IN THE FOLLOWING CHART WE
SHOW PAST PERFORMANCE OF
PRIOR NEW YORK
PORTFOLIOS, WHICH HAD
INVESTMENT OBJECTIVES,
STRATEGIES AND TYPES OF
BONDS SUBSTANTIALLY
SIMILAR TO THIS FUND.
THESE PRIOR SERIES
DIFFERED IN THAT THEY
CHARGED A HIGHER SALES
FEE. These prior New York
Series were offered
between January 14, 1988
and October 16, 1996 and
were outstanding on
December 31, 1999. OF
COURSE, PAST PERFORMANCE
OF PRIOR SERIES IS NO
GUARANTEE OF FUTURE
RESULTS OF THIS FUND.
AVERAGE ANNUAL COMPOUND
TOTAL RETURNS
FOR PRIOR SERIES
REFLECTING ALL EXPENSES.
FOR PERIODS ENDED
12/31/99.
-------------------------------------------------------------------
<TABLE>
High 3.92% 6.86% 5.82% 4.47% 8.06% 6.35%
<S> <C> <C> <C> <C> <C> <C>
Average -3.75 4.82 5.44 -1.84 5.84 6.03
Low -12.35 3.05 5.21 -9.84 3.83 5.79
</TABLE>
-----------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Average
Sales fee 2.01% 5.02% 5.77%
</TABLE>
-----------------------------------------------------------
NOTE: ALL RETURNS REPRESENT CHANGES IN UNIT PRICE WITH DISTRIBUTIONS REINVESTED
INTO THE MUNICIPAL FUND INVESTMENT ACCUMULATION PROGRAM.
<TABLE>
<C> <S>
8. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed and
bonds are not sold because of market changes.
Rather, experienced Defined Asset Funds financial
analysts regularly review the bonds in the Fund.
The Fund may sell a bond if certain adverse
credit or other conditions exist.
</TABLE>
4
<PAGE>
9. HOW DO I BUY UNITS?
The minimum investment is
one unit.
You can buy units from
any of the Sponsors and
other broker-dealers. The
Sponsors are listed later
in this prospectus. Some
banks may offer units for
sale through special
arrangements with the
Sponsors, although
certain legal
restrictions may apply.
UNIT PRICE PER
UNIT $972.98
(as of September 30,
1999)
Unit price is based on
the net asset value of
the Fund plus the sales
fee. An amount equal to
any principal cash, as
well as net accrued but
undistributed interest on
the unit, is added to the
unit price. An
independent evaluator
prices the bonds at 3:30
p.m. Eastern time every
business day. Unit price
changes every day with
changes in the prices of
the bonds in the Fund.
10. HOW DO I SELL UNITS?
You may sell your units
at any time to any
Sponsor or the Trustee
for the net asset value
determined at the close
of business on the date
of sale. You will not pay
any other fee when you
sell your units.
11. HOW ARE DISTRIBUTIONS
MADE AND TAXED?
The Fund pays income
monthly.
In the opinion of bond
counsel when each bond
was issued, interest on
the bonds in this Fund is
generally 100% exempt
from regular federal
income tax. Your income
may also be exempt from
some New York state and
local personal income
taxes if you live in New
York.
You will also receive
principal payments if
bonds are sold or called
or mature, when the cash
available is more than
$5.00 per unit. You will
be subject to tax on any
gain realized by the Fund
on the disposition of
bonds.
12. WHAT OTHER SERVICES ARE
AVAILABLE?
REINVESTMENT
You will receive your
income in cash unless you
choose to compound your
income by reinvesting at
no sales fee in the
Municipal Fund Investment
Accumulation Program,
Inc. This program is an
open-end mutual fund with
a comparable investment
objective, but the bonds
will generally not be
insured. Income from this
program will generally be
subject to state and
local income taxes. FOR
MORE COMPLETE INFORMATION
ABOUT THE PROGRAM,
INCLUDING CHARGES AND
FEES, ASK THE TRUSTEE FOR
THE PROGRAM'S PROSPECTUS.
READ IT CAREFULLY BEFORE
YOU INVEST. THE TRUSTEE
MUST RECEIVE YOUR WRITTEN
ELECTION TO REINVEST AT
LEAST 10 DAYS BEFORE THE
RECORD DAY OF AN INCOME
PAYMENT.
EXCHANGE PRIVILEGES
You may exchange units of
this Fund for units of
certain other Defined
Asset Funds. You may also
exchange into this Fund
from certain other funds.
We charge a reduced sales
fee on exchanges.
5
<PAGE>
- --------------------------------------------------------------------------------
NEW YORK PORTFOLIO--RISK/RETURN SUMMARY
1. WHAT IS THE FUND'S
OBJECTIVE?
The Fund seeks interest
income that is exempt
from regular federal
income taxes and some
state and local taxes by
investing in a fixed
portfolio consisting
primarily of long term
municipal revenue bonds.
2. WHAT ARE MUNICIPAL
REVENUE BONDS?
Municipal revenue bonds
are bonds issued by
states, municipalities
and public authorities to
finance the cost of
buying, building or
improving various
projects intended to
generate revenue, such as
airports, health care
facilities, housing and
municipal electric, water
and sewer utilities.
Generally, payments on
these bonds depend solely
on the revenues generated
by the projects, excise
taxes or state
appropriations, and are
not backed by the
government's taxing
power.
3. WHAT IS THE FUND'S
INVESTMENT STRATEGY?
- The Fund plans to hold to
maturity 7 long-term
tax-exempt municipal
bonds with an aggregate
face amount of
$3,475,000.
- The Fund is a unit
investment trust which
means that, unlike a
mutual fund, the
Portfolio is not managed.
- When the bonds were
initially deposited they
were rated A or better by
Standard & Poor's,
Moody's or Fitch. THE
QUALITY OF THE BONDS MAY
CURRENTLY BE LOWER.
- Many of the bonds can be
called at a premium
declining over time to
par value. Some bonds may
be called earlier at par
for extraordinary
reasons.
The Portfolio consists of
municipal bonds of the
following types:
/ / Airports/Ports/Highways 16%
/ / Lease Rental Appropriation 16%
/ / Municipal Water/Sewer
Utilities 14%
/ / Special Tax Issues 17%
/ / Universities/Colleges 37%
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
university/college bonds,
adverse developments in
this sector 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.
ALSO, THE PORTFOLIO IS
CONCENTRATED IN BONDS OF
NEW YORK SO IT IS LESS
DIVERSIFIED THAN A
NATIONAL FUND AND IS
SUBJECT TO RISKS
PARTICULAR TO NEW YORK
WHICH ARE BRIEFLY
DESCRIBED UNDER STATE
CONCENTRATION RISKS LATER
IN THIS PROSPECTUS.
6
<PAGE>
5. IS THIS FUND APPROPRIATE
FOR YOU?
Yes, if you want
federally tax-free
income. You will benefit
from a professionally
selected and supervised
portfolio whose risk is
reduced by investing in
bonds of several
different issuers.
The Fund is NOT
appropriate for you if
you want a speculative
investment that changes
to take advantage of
market movements, if you
do not want a
tax-advantaged investment
or if you cannot tolerate
any risk.
DEFINING YOUR INCOME
WHAT YOU MAY EXPECT
(Payable on the 25th day
of the month to holders
of record on the 10th day
of the month):
Regular Monthly Income
per unit $ 4.30
Annual Income per unit: $51.68
THESE FIGURES ARE ESTIMATES
DETERMINED ON THE EVALUATION DAY;
ACTUAL PAYMENTS MAY VARY.
6. WHAT ARE THE FUND'S FEES
AND EXPENSES?
This table shows the
costs and expenses you
may pay, directly or
indirectly, when you
invest in the Fund.
INVESTOR FEES
Maximum Sales Fee (Load)
on new
purchases (as a
percentage of
$1,000 invested) 2.90%
Employees of some of the
Sponsors and their
affiliates may pay a
reduced sales fee of no
less than $5.00 per unit.
The maximum sales fee is
reduced if you invest at
least $100,000, as
follows:
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
-------------- ------------
Less than $100,000 2.90%
$100,000 to $249,999 2.65%
$250,000 to $499,999 2.40%
$500,000 to $999,999 2.15%
$1,000,000 and over 1.90%
Maximum Exchange Fee 1.90%
ESTIMATED ANNUAL FUND
OPERATING EXPENSES
AMOUNT
PER UNIT
--------
$0.69
Trustee's Fee
$0.55
Portfolio
Supervision,
Bookkeeping
and
Administrati
Fees
(including
updating
expenses)
$0.37
Evaluator's
Fee
$0.20
Organization
Costs
$0.50
Other
Operating
Expenses
-----
$2.31
TOTAL
The Sponsors historically
paid organization costs
and updating expenses.
7. HOW HAVE SIMILAR FUNDS
PERFORMED IN THE PAST?
IN THE FOLLOWING CHART WE
SHOW PAST PERFORMANCE OF
PRIOR NEW YORK
PORTFOLIOS, WHICH HAD
INVESTMENT OBJECTIVES,
STRATEGIES AND TYPES OF
BONDS SUBSTANTIALLY
SIMILAR TO THIS FUND.
THESE PRIOR SERIES
DIFFERED IN THAT THEY
CHARGED A HIGHER SALES
FEE. These prior New York
Series were offered
between January 14, 1988
and October 16, 1996 and
were outstanding on
December 31, 1999. OF
COURSE, PAST PERFORMANCE
OF PRIOR SERIES IS NO
GUARANTEE OF FUTURE
RESULTS OF THIS FUND.
AVERAGE ANNUAL COMPOUND
TOTAL RETURNS
FOR PRIOR SERIES
REFLECTING ALL EXPENSES.
FOR PERIODS ENDED
12/31/99.
-------------------------------------------------------------------
<TABLE>
High 3.92% 6.86% 5.82% 4.47% 8.06% 6.35%
<S> <C> <C> <C> <C> <C> <C>
Average -3.75 4.82 5.44 -1.84 5.84 6.03
Low -12.35 3.05 5.21 -9.84 3.83 5.79
</TABLE>
-----------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Average
Sales fee 2.01% 5.02% 5.77%
</TABLE>
-----------------------------------------------------------
NOTE: ALL RETURNS REPRESENT CHANGES IN UNIT PRICE WITH DISTRIBUTIONS REINVESTED
INTO THE MUNICIPAL FUND INVESTMENT ACCUMULATION PROGRAM.
8. IS THE FUND MANAGED?
Unlike a mutual fund, the
Fund is not managed and
bonds are not sold
because of market
changes. Rather,
experienced Defined Asset
Funds financial analysts
regularly review the
bonds in the Fund. The
Fund may sell a bond if
certain adverse credit or
other conditions exist.
7
<PAGE>
9. HOW DO I BUY UNITS?
The minimum investment is
one unit.
You can buy units from
any of the Sponsors and
other broker-dealers. The
Sponsors are listed later
in this prospectus. Some
banks may offer units for
sale through special
arrangements with the
Sponsors, although
certain legal
restrictions may apply.
UNIT PRICE PER
UNIT $957.34
(as of September 30,
1999)
Unit price is based on
the net asset value of
the Fund plus the sales
fee. An amount equal to
any principal cash, as
well as net accrued but
undistributed interest on
the unit, is added to the
unit price. An
independent evaluator
prices the bonds at 3:30
p.m. Eastern time every
business day. Unit price
changes every day with
changes in the prices of
the bonds in the Fund.
10. HOW DO I SELL UNITS?
You may sell your units
at any time to any
Sponsor or the Trustee
for the net asset value
determined at the close
of business on the date
of sale. You will not pay
any other fee when you
sell your units.
11. HOW ARE DISTRIBUTIONS
MADE AND TAXED?
The Fund pays income
monthly.
In the opinion of bond
counsel when each bond
was issued, interest on
the bonds in this Fund is
generally 100% exempt
from regular federal
income tax. Your income
may also be exempt from
some New York state and
local personal income
taxes if you live in New
York.
You will also receive
principal payments if
bonds are sold or called
or mature, when the cash
available is more than
$5.00 per unit. You will
be subject to tax on any
gain realized by the Fund
on the disposition of
bonds.
12. WHAT OTHER SERVICES ARE
AVAILABLE?
REINVESTMENT
You will receive your
income in cash unless you
choose to compound your
income by reinvesting at
no sales fee in the
Municipal Fund Investment
Accumulation Program,
Inc. This program is an
open-end mutual fund with
a comparable investment
objective. Income from
this program will
generally be subject to
state and local income
taxes. FOR MORE COMPLETE
INFORMATION ABOUT THE
PROGRAM, INCLUDING
CHARGES AND FEES, ASK THE
TRUSTEE FOR THE PROGRAM'S
PROSPECTUS. READ IT
CAREFULLY BEFORE YOU
INVEST. THE TRUSTEE MUST
RECEIVE YOUR WRITTEN
ELECTION TO REINVEST AT
LEAST 10 DAYS BEFORE THE
RECORD DAY OF AN INCOME
PAYMENT.
EXCHANGE PRIVILEGES
You may exchange units of
this Fund for units of
certain other Defined
Asset Funds. You may also
exchange into this Fund
from certain other funds.
We charge a reduced sales
fee on exchanges.
8
<PAGE>
- --------------------------------------------------------------------------------
TAX-FREE VS. TAXABLE INCOME: A COMPARISON OF TAXABLE AND TAX-FREE YIELDS
FOR NEW YORK CITY RESIDENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 2000* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 4% 4.5% 5% 5.5% 6% 6.5%
<S> <C> <C> <C> <C> <C> <C> <C> <C>
IS EQUIVALENT TO A TAXABLE YIELD OF
<CAPTION>
TAXABLE INCOME 2000* TAX-FREE YIELD OF
SINGLE RETURN 7% 7.5% 8%
<S> <C> <C> <C>
IS EQUIVALENT TO A
TAXABLE YIELD OF
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 43,850 23.94 5.26 5.92 6.57 7.23 7.89 8.55 9.20
$ 0- 26,250 23.99 5.26 5.92 6.58 7.24 7.89 8.55 9.21
$ 26,251- 63,550 $ 43,851-105,950 35.65 6.22 6.99 7.77 8.55 9.32 10.10 10.88
$ 63,551-132,600 $105,951-161,450 38.33 6.49 7.30 8.11 8.92 9.73 10.54 11.35
$132,601-288,350 $161,451-288,350 42.80 6.99 7.87 8.74 9.62 10.49 11.36 12.24
OVER $288,350 OVER $288,350 46.02 7.41 8.34 9.26 10.19 11.12 12.04 12.97
<S> <C> <C>
9.86 10.52
$ 0- 26,250 9.87 10.52
$ 26,251- 63,550 11.66 12.43
$ 63,551-132,600 12.16 12.97
$132,601-288,350 13.11 13.99
OVER $288,350 13.89 14.82
</TABLE>
FOR NEW YORK STATE RESIDENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 2000* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 4% 4.5% 5% 5.5% 6% 6.5%
<S> <C> <C> <C> <C> <C> <C> <C> <C>
IS EQUIVALENT TO A TAXABLE YIELD OF
<CAPTION>
TAXABLE INCOME 2000* TAX-FREE YIELD OF
SINGLE RETURN 7% 7.5% 8%
<S> <C> <C> <C>
IS EQUIVALENT TO A
TAXABLE YIELD OF
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 26,250 $ $0- 43,850 20.82 5.05 5.68 6.31 6.95 7.58 8.21 8.84
$ 26,251- 63,550 $ 43,851-105,950 32.93 5.96 6.71 7.46 8.20 8.95 9.69 10.44
$ 63,551-132,600 $105,951-161,450 35.73 6.22 7.00 7.78 8.56 9.34 10.11 10.89
$132,601-288,350 $161,451-288,350 40.38 6.71 7.55 8.39 9.23 10.06 10.90 11.74
OVER $288,350 OVER $288,350 43.74 7.11 8.00 8.89 9.78 10.66 11.55 12.44
<S> <C> <C>
$ 0- 26,250 9.47 10.10
$ 26,251- 63,550 11.18 11.93
$ 63,551-132,600 11.67 12.45
$132,601-288,350 12.58 13.42
OVER $288,350 13.33 14.22
</TABLE>
To compare the yield of a taxable security with the yield of a tax-free
security, find your taxable income and read across. The table incorporates 2000
federal and applicable State (and City) income tax rates and assumes that all
income would otherwise be taxed at the investor's highest tax rate. Yield
figures are for example only.
*Based upon net amount subject to federal income tax after deductions and
exemptions. This table does not reflect the possible effect of other tax
factors, such as alternative minimum tax, personal exemptions, the phase out of
exemptions, itemized deductions or the possible partial disallowance of
deductions. Consequently, investors are urged to consult their own tax advisers
in this regard.
9
<PAGE>
WHAT YOU CAN EXPECT FROM YOUR INVESTMENT
MONTHLY INCOME
The Fund will pay you regular monthly income. Your monthly income may vary
because of:
- 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 income because the
portfolio is fixed.
Along with your income, you will receive your share of any available bond
principal.
RETURN FIGURES
We cannot predict your actual return, which will vary with unit price, how long
you hold your investment and changes in the portfolio, interest income and
expenses.
ESTIMATED CURRENT RETURN equals the estimated annual cash to be received from
the bonds in the Fund less estimated annual Fund expenses, divided by the Unit
Price (including the maximum sales fee):
<TABLE>
<S> <C> <C>
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.
10
<PAGE>
THE RISKS YOU FACE
INTEREST RATE RISK
Investing involves risks, including the risk that your investment will decline
in value if interest rates rise. Generally, bonds with longer maturities will
change in value more than bonds with shorter maturities. Bonds in the Fund are
more likely to be called when interest rates decline. This would result in early
returns of principal to you and may result in early termination of the Fund. Of
course, we cannot predict how interest rates may change.
CALL RISK
Many bonds can be prepaid or "called" by the issuer before their stated
maturity.
For example, some bonds may be required to be called pursuant to mandatory
sinking fund provisions.
Also, an issuer might call its bonds during periods of falling interest rates,
if the issuer's bonds have a coupon higher than current market rates.
An issuer might call its bonds in extraordinary cases, including if:
- 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
You can always sell back your units, but we cannot assure you that a liquid
trading market will always exist for the bonds in the portfolio, especially
since current law may restrict the Fund from selling bonds to any Sponsor. The
bonds will generally trade in the over-the-counter market. The value of the
bonds, and of your investment, may be reduced if trading in bonds is limited or
absent.
CONCENTRATION RISK
When a certain type of bond makes up 25% or more of the portfolio, it is said to
be "concentrated" in that bond type, which makes the Portfolio less diversified.
Here is what you should know about the Fund's concentration in
university/college bonds. Payment for these bonds depends on:
- level or amount and diversity of revenue sources;
- availability of endowments and other funds;
- enrollment;
- financial management;
- reputation; and
- for public institutions, the financial condition of the government and its
educational policies.
Here is what you should know about the Insured Portfolio's concentration in
industrial development revenue bonds (IDRs). IDRs are issued to finance various
privately operated projects such as pollution control and manufacturing
facilities. Payment for these bonds depends on:
11
<PAGE>
- creditworthiness of the corporate operator of the project being financed;
- economic factors relating to the particular industry; and,
- in some cases, creditworthiness of an affiliated or third-party guarantor.
Changes to the portfolio from bond redemptions, maturities and sales may affect
the Fund's concentrations over time.
STATE CONCENTRATION RISK
NEW YORK RISKS
GENERALLY
For decades, New York's economy has trailed the rest of the nation. Both the
state and New York City have experienced long-term structural imbalances between
revenues and expenses, and have repeatedly relied substantially on non-recurring
measures to achieve budget balance. The pressures that contribute to budgetary
problems at both the state and local level include:
- the high combined state and local tax burden;
- a decline in manufacturing jobs, leading to above-average unemployment;
- sensitivity to the financial services industry; and
- dependence on federal aid.
STATE GOVERNMENT
The State government frequently has difficulty approving budgets on time. Budget
gaps of $1 billion and $4 billion are projected for the next two years. The
State's general obligation bonds are rated A by Standard & Poor's and A2 by
Moody's. There is $37 billion of state-related debt outstanding.
NEW YORK CITY GOVERNMENT
Even though the City had budget surpluses each year from 1981, budget gaps of $2
billion are projected for each of the next three years. New York City faces
fiscal pressures from:
- aging public facilities that need repair or replacement;
- welfare and medical costs;
- expiring labor contracts; and
- a high and increasing debt burden.
The City requires substantial state aid, and its fiscal strength depends heavily
on the securities industry. Its general obligation bonds are rated A- by
Standard & Poor's and A3 by Moody's.
BOND QUALITY RISK
A reduction in a bond's rating may decrease its value and, indirectly, the value
of your investment in the Fund.
INSURANCE RELATED RISK
Some bonds are backed by insurance companies (as shown under Portfolios).
Insurance policies generally make payments only according to a bond's original
payment schedule and do not make early payments when a bond defaults or becomes
taxable. Although the federal government does not regulate the insurance
business, various state laws and federal initiatives and tax law changes could
significantly affect the insurance business. The claims-paying ability of the
insurance companies is generally rated A or better by Standard & Poor's or
another nationally recognized rating organization. The insurance company ratings
are subject to change at any time at the discretion of the rating agencies.
12
<PAGE>
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,
- 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 the secondary market continuously for over 25 years, but we
could discontinue it without prior notice for any business reason.
SELLING UNITS TO THE TRUSTEE
Regardless of whether we maintain a secondary market, you can sell your units to
the Trustee at any time by sending the Trustee a letter (with any outstanding
certificates if you hold Unit certificates). You must properly endorse your
certificates (or execute a written transfer instrument with signatures
guaranteed by an eligible institution). Sometimes, additional documents are
needed such as a trust document, certificate of corporate authority, certificate
of death or appointment as executor, administrator or guardian.
Within seven days after your request and the necessary documents are received,
the Trustee will mail a check to you. Contact the Trustee for additional
information.
As long as we are maintaining a secondary market, the Trustee will sell your
units to us at a price based on net asset value. If there is no secondary
market, the Trustee may sell your units in the over-the-counter market for a
higher price, but it is not obligated to do so. In that case, you will receive
the net proceeds of the sale.
If the Fund does not have cash available to pay you for units you are selling,
the agent for the Sponsors will select bonds to be sold. Bonds will be selected
based on market and credit factors. These sales could be made at
13
<PAGE>
times when the bonds would not otherwise be sold and may result in your
receiving less than the unit par value and also reduce the size and diversity of
the Fund.
If you acquire 25% or more of the outstanding units of the Fund and you sell
units with a value exceeding $250,000, the Trustee may choose to pay you "in
kind" by distributing bonds and cash with a total value equal to the price of
those units. The Trustee will try to distribute bonds in the portfolio pro rata,
but it reserves the right to distribute only one or a few bonds. The Trustee
will act as your agent in an in kind distribution and will either hold the bonds
for your account or sell them as you instruct. You must pay any transaction
costs as well as transfer and ongoing custodial fees on sales of bonds
distributed in kind.
There could be a delay in paying you for your units:
- 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 1.90%. You may exchange units of this Fund for units
of certain other Defined Asset Funds at a reduced sales fee if your investment
goals change. To exchange units, you should talk to your financial professional
about what funds are exchangeable, suitable and currently available.
Normally, an exchange is taxable and you must recognize any gain or loss on the
exchange. However, the IRS may try to disallow a loss if the portfolios of the
two funds are not materially different; you should consult your own tax adviser.
We may amend or terminate this exchange option at any time without notice.
HOW THE FUND WORKS
PRICING
The price of a unit includes interest accrued on the bonds, less expenses, from
the initial most recent Record Day up to, but not including, the settlement
date, which is usually three business days after the purchase date of the unit.
A portion of the price of a unit consists of cash so that the Trustee can
provide you with regular monthly income. When you sell your units you will
receive your share of this cash.
In addition, as with mutual funds, the Fund (and therefore the investors) pay
all or some of the costs of organizing the Fund including:
- 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.
14
<PAGE>
EVALUATIONS
An independent Evaluator values the bonds on each business day (excluding
Saturdays, Sundays and the following holidays as observed by the New York Stock
Exchange: New Year's Day, Presidents' Day, Martin Luther King, Jr. Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas).
Bond values are based on current bid or offer prices for the bonds or comparable
bonds. In the past, the difference between bid and offer prices of publicly
offered tax-exempt bonds has ranged from 0.5% of face amount on actively traded
issues to 3.5% on inactively traded issues; the difference has averaged between
1 and 2%.
INCOME
The Trustee credits interest to an Income Account and other receipts to a
Capital Account. The Trustee may establish a Reserve Account by withdrawing from
these accounts amounts it considers appropriate to pay any material liability.
These accounts do not bear interest.
EXPENSES
The Trustee is paid monthly. It also benefits when it holds cash for the Fund in
non-interest bearing accounts. The Trustee may also receive additional amounts:
- 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; if
a contract to buy any bond.
Unlike a mutual fund, the portfolio is designed to remain intact and we may keep
15
<PAGE>
bonds in the portfolio even if their credit quality declines or other adverse
financial circumstances occur. However, we may sell a bond in certain cases if
we believe that certain adverse credit conditions exist or if a bond becomes
taxable.
If we maintain a secondary market in units but are unable to sell the units that
we buy in the secondary market, we will redeem units, which will affect the size
and composition of the portfolio. Units offered in the secondary market may not
represent the same face amount of bonds that they did originally.
We decide whether or not to offer units for sale that we acquire in the
secondary market after reviewing:
- 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 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;
16
<PAGE>
- 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:
- 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
counsel for the Sponsors, has given an opinion that the units are validly
issued. Special counsel located in the relevant states have given state and
local tax opinions.
AUDITORS
Deloitte & Touche LLP, 2 World Financial Center, New York, New York 10281,
independent accountants, audited the Statements of Condition included in this
prospectus.
SPONSORS
The Sponsors are:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (a wholly-owned subsidiary of
Merrill Lynch & Co., Inc.)
P.O. Box 9051,
Princeton, NJ 08543-9051
SALOMON SMITH BARNEY INC. (an indirectly wholly-owned subsidiary of Citigroup
Inc.)
388 Greenwich Street--23rd Floor,
New York, NY 10013
17
<PAGE>
DEAN WITTER REYNOLDS INC. (a principal operating subsidiary of Morgan Stanley
Dean Witter & Co.)
Two World Trade Center--59th Floor,
New York, NY 10048
PRUDENTIAL SECURITIES INCORPORATED (an
indirect wholly-owned subsidiary of the
Prudential Insurance Company of America)
One New York Plaza
New York, NY 10292
PAINEWEBBER INCORPORATED (a wholly-owned subsidiary of PaineWebber Group Inc.)
1285 Avenue of the Americas,
New York, NY 10019
Each Sponsor is a Delaware corporation and it, or its predecessor, has acted as
sponsor to many unit investment trusts. As a registered broker-dealer each
Sponsor buys and sells securities (including investment company shares) for
others (including investment companies) and participates as an underwriter in
various selling groups.
TRUSTEE
The Chase Manhattan Bank, Unit Investment Trust Department, 4 New York
Plaza--6th Floor, New York, New York 10004, is the Trustee. It is supervised by
the Federal Deposit Insurance Corporation, the Board of Governors of the Federal
Reserve System and New York State banking authorities.
UNDERWRITERS' AND SPONSORS' PROFITS
Underwriters receive sales charges when they sell units. The Sponsors also
realized a profit or loss on the initial date of deposit of the bonds. Any cash
made available by you to the Sponsors before the settlement date for those units
may be used in the Sponsors' businesses to the extent permitted by federal law
and may benefit the Sponsors.
A Sponsor or Underwriter may realize profits or sustain losses on bonds in the
Fund which were acquired from underwriting syndicates of which it was a member.
In maintaining a secondary market, the Sponsors will also realize profits or
sustain losses in the amount of any difference between the prices at which they
buy units and the prices at which they resell or redeem them.
PUBLIC DISTRIBUTION
The Sponsors do not intend to qualify units for sale in any foreign countries.
This prospectus does not constitute an offer to sell units in any country where
units cannot lawfully be sold.
CODE OF ETHICS
Merrill Lynch, as agent for the Sponsors, has adopted a code of ethics requiring
preclearance and reporting of personal securities transactions by its employees
with access to information on portfolio transactions. The goal of the code is to
prevent fraud, deception or misconduct against the Fund and to provide
reasonable standards of conduct.
YEAR 2000 ISSUES
Many computer systems were designed in such a way that they may be unable to
distinguish between the year 2000 and the year 1900 (commonly known as the "Year
2000 Problem"). We do not expect that the computer system changes necessary to
prepare for the Year 2000 will cause any
18
<PAGE>
major operational difficulties for the Fund. The Year 2000 Problem may adversely
affect the issuers of the bonds contained in a Portfolio, but we cannot predict
whether any impact will be material to the Fund as a whole.
TAXES
The following summary describes some of the important income tax consequences of
holding units. It assumes that you are not a dealer, financial institution,
insurance company or other investor with special circumstances 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 may 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-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. Consult your tax adviser in this regard. Because the deductibility of
capital losses is subject to limitations, you may not be able to deduct all of
your capital losses.
YOUR BASIS IN THE BONDS
Your aggregate basis in the bonds will be equal to the cost of your units,
including any
19
<PAGE>
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.
SUPPLEMENTAL INFORMATION
You can receive at no cost supplemental information about the Fund by calling
the Trustee. The supplemental information includes more detailed risk disclosure
about the types of bonds that may be in the Fund's portfolios, general risk
disclosure concerning any insurance securing certain bonds, and general
information about the structure and operation of the Fund. The supplemental
information is also available from the SEC.
20
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 218 (NEW YORK INSURED AND
NEW YORK TRUSTS),
DEFINED ASSET FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsors, Trustee and Holders
of Municipal Investment Trust Fund,
Multistate Series - 218 (New York Insured and
New York Trusts),
Defined Asset Funds:
We have audited the accompanying statements of condition of Municipal
Investment Trust Fund, Multistate Series - 218 (New York Insured and
New York Trusts), Defined Asset Funds, including the portfolios, as of
September 30, 1999 and the related statements of operations and of
changes in net assets for the years ended September 30, 1999 and 1998,
and the period October 17, 1996 to September 30, 1997. These financial
statements are the responsibility of the Trustee. Our responsibility
is to express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. Securities owned at September 30, 1999, as shown
in such portfolios, were confirmed to us by The Chase Manhattan Bank,
the Trustee. An audit also includes assessing the accounting
principles used and significant estimates made by the Trustee, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Municipal
Investment Trust Fund, Multistate Series - 218 (New York Insured and
New York Trusts), Defined Asset Funds at September 30, 1999 and the
results of their operations and changes in their net assets for the
above-stated periods in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE LLP
New York, N.Y.
January 10, 2000
D - 1.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 218 (NEW YORK INSURED TRUST),
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
As of September 30, 1999
TRUST PROPERTY:
Investment in marketable securities
at value (cost $ 4,062,882)(Note 1) .. $ 4,019,942
Accrued interest......................... 66,212
Deferred organization cost (Note 5) ..... 1,855
Cash - principal ........................ 43,071
-------------
Total trust property .................. 4,131,080
LESS LIABILITIES:
Income advance from Trustee.............. $ 51,793
Accrued Sponsors' fees .................. 1,588
Other liabilities (Note 5) .............. 1,855 55,236
------------ -------------
NET ASSETS, REPRESENTED BY:
4,255 units of fractional undivided
interest outstanding (Note 3) ........ 4,063,013
Undistributed net investment income ..... 12,831 $ 4,075,844
------------ =============
UNIT VALUE ($ 4,075,844 / 4,255 units)..... $ 957.90
=============
See Notes to Financial Statements.
D - 2.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 218 (NEW YORK INSURED TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
October 17, 1996
to
Years Ended September 30, September 30,
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income ........................ $ 236,964 $ 243,716 $ 235,582
Trustee's fees and expenses ............ (6,563) (6,827) (7,823)
Sponsors' fees ......................... (2,093) (2,025) (1,940)
----------------------------------------------
Net investment income .................. 228,308 234,864 225,819
----------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain on
securities sold or redeemed .......... 9,850 2,547
Unrealized appreciation (depreciation)
of investments ....................... (415,983) 233,362 139,681
----------------------------------------------
Net realized and unrealized
gain (loss) on investments ........... (406,133) 235,909 139,681
----------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS .............. $ (177,825) $ 470,773 $ 365,500
==============================================
</TABLE>
See Notes to Financial Statements.
D - 3.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 218 (NEW YORK INSURED TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
October 17, 1996
to
Years Ended September 30, September 30,
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
OPERATIONS:
Net investment income .................. $ 228,308 $ 234,864 $ 225,819
Realized gain on
securities sold or redeemed .......... 9,850 2,547
Unrealized appreciation (depreciation)
of investments ....................... (415,983) 233,362 139,681
----------------------------------------------
Net increase (decrease) in net assets
resulting from operations ............ (177,825) 470,773 365,500
----------------------------------------------
DISTRIBUTIONS TO HOLDERS (Note 2):
Income ................................ (228,255) (234,760) (212,157)
Principal .............................. (2,414)
----------------------------------------------
Total distributions .................... (230,669) (234,760) (212,157)
----------------------------------------------
SHARE TRANSACTIONS:
Redemption amounts - income ............ (811) (177)
Redemption amounts - principal ......... (219,291) (73,717)
----------------------------------------------
Total share transactions ............... (220,102) (73,894)
----------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS .... (628,596) 162,119 153,343
NET ASSETS AT BEGINNING OF PERIOD ........ 4,704,440 4,542,321 4,388,978
----------------------------------------------
NET ASSETS AT END OF PERIOD .............. $ 4,075,844 $ 4,704,440 $ 4,542,321
==============================================
PER UNIT:
Income distributions during
period ............................... $ 52.09 $ 52.10 $ 46.71
==============================================
Principal distributions during
period ............................... $ 0.54
==================
Net asset value at end of
period ............................... $ 957.89 $ 1,052.45 $ 1,000.07
==============================================
TRUST UNITS:
Redeemed during period ................. 215 72
Outstanding at end of period ........... 4,255 4,470 4,542
==============================================
</TABLE>
See Notes to Financial Statements.
D - 4.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 218 (NEW YORK INSURED TRUST),
DEFINED ASSET FUNDS
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as a
Unit Investment Trust. The following is a summary of significant
accounting policies consistently followed by the Fund in the
preparation of its financial statements. The policies are in
conformity with generally accepted accounting principles.
(A) Securities are stated at value as determined by the Evaluator
based on bid side evaluations for the securities, except that
the value on October 17, 1996 was based on the offering side
evaluations at October 15, 1996, the day prior to the Date of
Deposit. Cost of securities at October 17, 1996 was also
based on such 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
Cost of 4,255 units at Date of Deposit ................. $ 4,303,548
Less sales charge ...................................... 191,901
-----------
Net amount applicable to Holders ....................... 4,111,647
Redemptions of units - net cost of 287 units redeemed
less redemption amounts (principal)................... (15,677)
Realized gain on securities sold or redeemed ........... 12,397
Principal distributions ................................ (2,414)
Unrealized depreciation of investments.................. (42,940)
-----------
Net capital applicable to Holders ...................... $ 4,063,013
===========
4. INCOME TAXES
As of September 30, 1999, unrealized depreciation of investments,
based on cost for Federal income tax purposes, aggregated $ 42,940,
all of which related to depreciated securities. The cost of investment
securities for Federal income tax purposes was $ 4,062,882 at
September 30, 1999.
5. DEFERRED ORGANIZATION COSTS
Deferred organization costs are being amortized over a period of five
years. Included in "Other liabilities" in the accompanying Statement
of Condition is $ 1,855 payable to the Trustee for reimbursement of
costs related to the organization of the Trust
D - 5.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 218 (NEW YORK INSURED TRUST),
DEFINED ASSET FUNDS
PORTFOLIO
As of September 30, 1999
<TABLE>
<CAPTION>
Rating of Optional
Portfolio No. and Title of Issues Face Redemption
Securities (1) (4) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
---------- --------- ----------- ----------- ----------- ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 Battery Park City Auth., NY., Jr. Rev. AAA $ 750,000 5.500 % 2029 11/01/06 $ 727,762 $ 715,043
Bonds, Ser. 1996 A (AMBAC Ins.) @ 102.000
2 New York City, NY, Educl. Construction AAA 610,000 5.500 2026 04/01/06 592,664 583,001
Fund, Jr. Sub. Rev. Bonds, Ser. 1993 @ 102.000
(AMBAC Ins.)
3 New York City, NY, Mun. Wtr. Fin. AAA 675,000 5.500 2023 06/15/04 656,546 649,026
Auth., Wtr. and Swr. Sys. Rev. Bonds, @ 101.500
Ser. 1994 F (MBIA Ins.)
4 New York State Energy Research and AAA 630,000 5.500 2021 01/01/06 613,500 608,511
Dev. Auth., (Brooklyn Union Gas Co. @ 102.000
Proj.), Gas Facs. Rev. Bonds Ser.
1996 (MBIA Ins.)
5 New York State Energy Research and Dev. AAA 750,000 5.250 2020 10/01/03 701,603 701,250
Auth., Facs. Rfdg. Rev. Bonds (Consol. @ 102.000
Edison Co. of New York, Inc. Proj.),
Ser. 1993 B (AMBAC Ins.)
6 New York State Med. Care Facs. Fin. AAA 475,000 5.750 2025 02/15/05 475,000 467,490
Agy., Montefiore Med. Ctr., FHA-Ins. @ 102.000
Mtge. Rev. Bonds, Ser. 1995 A
(AMBAC Ins.)
7 New York State Urban Dev. Corp., Corr. AAA 315,000 5.250 2018 01/01/03 295,807 295,621
Fac. Rev. Bonds, Rfdg. Ser. 1993 @ 102.000
(AMBAC Ins.)
----------- ----------- -----------
$ 4,205,000 $ 4,062,882 $ 4,019,942
=========== =========== ===========
</TABLE>
See notes to portfolios on page D - 12.
D - 6.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 218 (NEW YORK TRUST),
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
As of September 30, 1999
TRUST PROPERTY:
Investment in marketable securities
at value (cost $ 3,272,976)(Note 1) .. $ 3,273,956
Accrued interest......................... 52,336
Deferred organization cost (Note 5) ..... 1,648
Cash - principal ........................ 41,295
-------------
Total trust property .................. 3,369,235
LESS LIABILITIES:
Income advance from Trustee.............. $ 40,374
Accrued Sponsors' fees .................. 1,323
Other liabilities (Note 5) .............. 1,648 43,345
------------- -------------
NET ASSETS, REPRESENTED BY:
3,522 units of fractional undivided
interest outstanding (Note 3) ........ 3,315,251
Undistributed net investment income ..... 10,639 $ 3,325,890
------------- =============
UNIT VALUE ($ 3,325,890 / 3,522 units)..... $ 944.32
=============
See Notes to Financial Statements.
D - 7.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 218 (NEW YORK TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
October 17, 1996
to
Years Ended September 30, September 30,
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income ........................ $ 198,623 $ 213,836 $ 210,556
Trustee's fees and expenses ............ (6,014) (6,551) (7,131)
Sponsors' fees ......................... (1,766) (1,793) (1,720)
----------------------------------------------
Net investment income .................. 190,843 205,492 201,705
----------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain on
securities sold or redeemed .......... 10,731 23,552
Unrealized appreciation (depreciation)
of investments ....................... (348,407) 181,035 168,352
----------------------------------------------
Net realized and unrealized
gain (loss) on investments ........... (337,676) 204,587 168,352
----------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS .............. $ (146,833) $ 410,079 $ 370,057
==============================================
</TABLE>
See Notes to Financial Statements.
D - 8.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 218 (NEW YORK TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
October 17, 1996
to
Years Ended September 30, September 30,
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
OPERATIONS:
Net investment income .................. $ 190,843 $ 205,492 $ 201,705
Realized gain on
securities sold or redeemed .......... 10,731 23,552
Unrealized appreciation (depreciation)
of investments ....................... (348,407) 181,035 168,352
----------------------------------------------
Net increase (decrease) in net assets
resulting from operations ............ (146,833) 410,079 370,057
----------------------------------------------
DISTRIBUTIONS TO HOLDERS (Note 2):
Income ................................ (191,329) (205,908) (189,376)
Principal .............................. (14,296)
----------------------------------------------
Total distributions .................... (205,625) (205,908) (189,376)
----------------------------------------------
SHARE TRANSACTIONS:
Redemption amounts - income ............ (249) (539)
Redemption amounts - principal ......... (200,205) (321,760)
----------------------------------------------
Total share transactions ............... (200,454) (322,299)
----------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS .... (552,912) (118,128) 180,681
NET ASSETS AT BEGINNING OF PERIOD ........ 3,878,802 3,996,930 3,816,249
----------------------------------------------
NET ASSETS AT END OF PERIOD .............. $ 3,325,890 $ 3,878,802 $ 3,996,930
==============================================
PER UNIT:
Income distributions during
period ............................... $ 52.07 $ 52.29 $ 46.91
==============================================
Principal distributions during
period ............................... $ 3.84
==================
Net asset value at end of
period ............................... $ 944.32 $ 1,041.85 $ 990.07
==============================================
TRUST UNITS:
Redeemed during period ................. 201 314
Outstanding at end of period ........... 3,522 3,723 4,037
==============================================
</TABLE>
See Notes to Financial Statements.
D - 9.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 218 (NEW YORK TRUST),
DEFINED ASSET FUNDS
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as a
Unit Investment Trust. The following is a summary of significant
accounting policies consistently followed by the Fund in the
preparation of its financial statements. The policies are in
conformity with generally accepted accounting principles.
(A) Securities are stated at value as determined by the Evaluator
based on bid side evaluations for the securities, except that
the value on October 17, 1996 was based on the offering side
evaluations at October 15, 1996, the day prior to the Date of
Deposit. Cost of securities at October 17, 1996 was also
based on such 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
Cost of 3,522 units at Date of Deposit ................. $ 3,484,766
Less sales charge ...................................... 155,355
-----------
Net amount applicable to Holders ....................... 3,329,411
Redemptions of units - net cost of 515 units redeemed
less redemption amounts (principal)................... (35,126)
Realized gain on securities sold or redeemed ........... 34,282
Principal distributions ................................ (14,296)
Net unrealized appreciation of investments.............. 980
-----------
Net capital applicable to Holders ...................... $ 3,315,251
===========
4. INCOME TAXES
As of September 30, 1999, net unrealized appreciation of investments,
based on cost for Federal income tax purposes, aggregated $ 980, of
which $ 16,368 related to depreciated securities and $ 17,348 related
to appreciated securities. The cost of investment securities for
Federal income tax purposes was $ 3,272,976 at September 30, 1999.
5. DEFERRED ORGANIZATION COSTS
Deferred organization costs are being amortized over a period of five
years. Included in "Other liabilities" in the accompanying Statement
of Condition is $ 1,648 payable to the Trustee for reimbursement of
costs related to the organization of the Trust
D - 10.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 218 (NEW YORK TRUST),
DEFINED ASSET FUNDS
PORTFOLIO
As of September 30, 1999
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
---------- --------- ----------- ----------- ----------- ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 34th Street Partnership, Inc., 34th St. A1(m) $ 600,000 5.500 % 2023 01/01/03 $ 564,318 $ 574,170
Bus. Imp. Dist. Cap. Imp. Bonds, @ 102.000
Ser. 1993
2 Dormitory Auth. of the State of New A-(f) 380,000 6.000 2020 07/01/06 377,579 380,726
York, City Univ. Sys. Consol. Rev. @ 102.000
Bonds, Ser. 1996 A
3 Dormitory Auth. of the State of New A(f) 500,000 5.500 2026 05/15/06 468,830 470,720
York, State Univ. Educl. Facs., Rev. @ 102.000
Bonds, Ser. 1996
4 Dormitory Auth. of the State of New A(f) 405,000 5.700 2021 07/01/04 389,910 391,258
York, Upstate Cmnty. Coll. Rev. Bonds, @ 102.000
Ser. 1994 A
5 New York City, NY, Mun. Wtr. Fin. Aa-(f) 490,000 5.875 2026 06/15/06 490,000 486,359
Auth., Wtr. and Swr. Sys. Rev. Bonds, @ 101.000
Fiscal Ser. 1996 B
6 New York State Urban Dev. Corp., Corr. A(f) 550,000 5.250 2021 01/01/04 500,885 501,996
Cap. Fac. Rev. Bonds, Rfdg. @ 102.000
Ser. 1993 A
7 Triborough Bridge and Tunnel Auth., NY, Aa3(m) 550,000 4.750 2019 01/01/04 481,454 468,727
Gen. Purp. Rev. Bonds, Ser. 1994 A @ 100.000
--------- --------- ---------
$ 3,475,000 $ 3,272,976 $ 3,273,956
========= ========= =========
</TABLE>
See notes to Portfolios on page D - 12.
D - 11.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 218 (NEW YORK INSURED AND NEW YORK TRUSTS),
DEFINED ASSET FUNDS
NOTES TO PORTFOLIOS
As of September 30, 1999
(1) The ratings of the bonds are by Standard & Poor's Ratings Group, or by
Moody's Investors Service, Inc. if followed by "(m)", or by Fitch
Investors Service, Inc. if followed by "(f)"; "NR" indicates that this
bond is not currently rated by any of the above-mentioned rating services.
These ratings have been furnished by the Evaluator but not confirmed with
the rating agencies.
(2) See Notes to Financial Statements.
(3) Optional redemption provisions, which may be exercised in whole or in
part, are initially at prices of par plus a premium, then subsequently at
prices declining to par. Certain securities may provide for redemption at
par prior or in addition to any optional or mandatory redemption dates or
maturity, for example, through the operation of a maintenance and
replacement fund, if proceeds are not able to be used as contemplated,the
project is condemned or sold or the project is destroyed and insurance
proceeds are used to redeem the securities. Many of the securities are
also subject to mandatory sinking fund redemption commencing on dates
which may be prior to the date on which securities may be optionally
redeemed. Sinking fund redemptions are at par and redeem only part of the
issue. Some of the securities have mandatory sinking funds which contain
optional provisions permitting the issuer to increase the principal amount
of securities called on a mandatory redemption date. The sinking fund
redemptions with optional provisions may, and optional refunding
redemptions generally will, occur at times when the redeemed securities
have an offering side evaluation which represents a premium over par. To
the extent that the securities were acquired at a price higher than the
redemption price, this will represent a loss of capital when compared with
the Public Offering Price of the Units when acquired. Distributions will
generally be reduced by the amount of the income which would otherwise
have been paid with respect to redeemed securities and there will be
distributed to Holders any principal amount and premium received on such
redemption after satisfying any redemption requests for Units received by
the Fund. The estimated current return may be affected by redemptions.
(4) All securities are insured, either on an individual basis or by portfolio
insurance, by a municipal bond insurance company which has been assigned
"AAA" claims paying ability by Standard & Poor's. Accordingly, Standard &
Poor's has assigned "AAA" ratings to the securities. Securities covered by
portfolio insurance are rated "AAA" only as long as they remain in the
Trust.
D - 12.
<PAGE>
DEFINED ASSET FUNDS--REGISTERED TRADEMARK--
<TABLE>
<S> <C>
HAVE QUESTIONS ? MUNICIPAL INVESTMENT TRUST FUND
Request the most MULTISTATE SERIES--218
recent free Information (A Unit Investment Trust)
Supplement that gives more ---------------------------------------
details about the Fund, This Prospectus does not contain
by calling: complete information about the
The Chase Manhattan Bank investment company filed with the
1-800-323-1508 Securities and Exchange Commission in
Washington, D.C. under the:
- Securities Act of 1933 (file no.
333-11617) 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.
15367--1/00
</TABLE>