SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-6
For Registration Under the Securities Act of 1933 of Securities
of Unit Investment Trusts Registered on Form N-8B-2
A. Exact Name of Trust: FT 783
B. Name of Depositor: FIRST TRUST PORTFOLIOS L.P.
C. Complete Address of Depositor's 1001 Warrenville Road
Principal Executive Offices: Lisle, Illinois 60532
D. Name and Complete Address of
Agents for Service: FIRST TRUST PORTFOLIOS L.P.
Attention: James A. Bowen
Suite 300
1001 Warrenville Road
Lisle, Illinois 60532
CHAPMAN & CUTLER LLP
Attention: Eric F. Fess
111 West Monroe Street
Chicago, Illinois 60603
E. Title of Securities
Being Registered: An indefinite number of
Units pursuant to Rule
24f-2 promulgated under
the Investment Company Act
of 1940, as amended.
F. Approximate Date of Proposed
Sale to the Public: ____ Check if it is
proposed that this filing
will become effective on
_____ at ____ p.m.
pursuant to Rule 487.
The registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
SUBJECT TO COMPLETION, DATED DECEMBER 1, 2003
Advisor's Disciplined Income Trust, Senior Variable Rate Closed-End
Portfolio, Series 2003-16
FT 783
FT 783 is a series of a unit investment trust, the FT Series. FT 783
consists of a single portfolio known as Advisor's Disciplined Income
Trust, Senior Variable Rate Closed-End Portfolio, Series 2003-16 (the
"Trust"). The Trust invests in common stocks ("Securities") of closed-
end investment companies, the portfolios of which are concentrated in
senior corporate loans ("Senior Loans"), and seeks to provide investors
with the potential for high current income.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT
SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER
OR SALE IS NOT PERMITTED.
FIRST TRUST (R)
1-800-621-9533
The date of this prospectus is December __, 2003
Page 1
Table of Contents
Summary of Essential Information 3
Fee Table 4
Report of Independent Auditors 5
Statement of Net Assets 6
Schedule of Investments 7
The FT Series 8
Portfolio 8
Risk Factors 9
Public Offering 10
Distribution of Units 13
The Sponsor's Profits 13
The Secondary Market 14
How We Purchase Units 14
Expenses and Charges 14
Tax Status 15
Retirement Plans 16
Rights of Unit Holders 16
Income and Capital Distributions 17
Redeeming Your Units 17
Removing Securities from the Trust 18
Amending or Terminating the Indenture 19
Information on the Sponsor, Trustee and Evaluator 20
Other Information 21
Page 2
Summary of Essential Information
Advisor's Disciplined Income Trust, Senior Variable Rate Closed-End
Portfolio, Series 2003-16
FT 783
At the Opening of Business on the
Initial Date of Deposit-December __, 2003
Sponsor: First Trust Portfolios L.P.
Trustee: The Bank of New York
Evaluator: First Trust Advisors L.P.
Initial Number of Units (1)
Fractional Undivided Interest in the Trust per Unit (1) 1/
Public Offering Price:
Aggregate Offering Price Evaluation of Securities per Unit (2) $ 9.900
Maximum Sales Charge of 4.95% of the Public Offering Price per Unit
(5.00% of the net amount invested, exclusive of the deferred sales charge) (3) $ .495
Less Deferred Sales Charge per Unit $ (.395)
Public Offering Price per Unit (4) $ 10.000
Sponsor's Initial Repurchase Price per Unit (5) $ 9.505
Redemption Price per Unit (based on aggregate underlying value of Securities
less the deferred sales charge) (5) $ 9.505
Estimated Net Annual Distribution per Unit for the first year (6) $
CUSIP Number 30267R 261
Security Code
Ticker Symbol
First Settlement Date December __, 2003
Mandatory Termination Date (7) December 17, 2008
Income Distribution Record Date Fifteenth day of each month, commencing January 15, 2004.
Income Distribution Date (6) Last day of each month, commencing January 31, 2004.
______________
<FN>
(1) As of the close of business on the Initial Date of Deposit, we may
adjust the number of Units of the Trust so that the Public Offering
Price per Unit will equal approximately $10.00. If we make such an
adjustment, the fractional undivided interest per Unit will vary from
the amount indicated above.
(2) Each listed Security is valued at its last closing sale price. If a
Security is not listed, or if no closing sale price exists, it is valued
at its closing ask price. Evaluations for purposes of determining the
purchase, sale or redemption price of Units are made as of the close of
trading on the New York Stock Exchange (generally 4:00 p.m. Eastern
time) on each day on which it is open (the "Evaluation Time").
(3) The maximum sales charge consists of an initial sales charge and a
deferred sales charge. See "Fee Table" and "Public Offering."
(4) The Public Offering Price shown above reflects the value of the
Securities on the business day prior to the Initial Date of Deposit. No
investor will purchase Units at this price. The price you pay for your
Units will be based on their valuation at the Evaluation Time on the
date you purchase your Units. On the Initial Date of Deposit, the Public
Offering Price per Unit will not include any accumulated cash in the
Income Account. After this date, a pro rata share of any cash in the
Income Account will be included.
(5) Until the earlier of six months after the Initial Date of Deposit or
the end of the initial offering period the Sponsor's Initial Repurchase
Price per Unit and the Redemption Price per Unit will include estimated
organization costs per Unit set forth under "Fee Table." After such
date, the Sponsor's Repurchase Price and Redemption Price per Unit will
not include such estimated organization costs. See "Redeeming Your Units."
(6) The estimated net annual distribution for subsequent years of $
per Unit is expected to be less than that set forth above for the first
year because a portion of the Securities included in the Trust will be
sold during the first year to pay for organization costs and the
deferred sales charge. We base our estimate of the dividends the Trust
will receive from the Closed-End Funds by annualizing the most recent
dividends declared by the Closed-End Funds. Due to various factors,
actual dividends received from the Closed-End Funds will most likely
differ from their most recent annualized dividends. The actual net
annual distribution you will receive will vary from that set forth above
with changes in the Trust's fees and expenses, in dividends received and
with the sale of Securities. See "Fee Table" and "Expenses and Charges."
Distributions from the Capital Account will be made monthly on the last
day of the month to Unit holders of record on the fifteenth day of such
month if the amount available for distribution equals at least $1.00 per
100 Units. In any case, the Trustee will distribute any funds in the
Capital Account in December of each year and as part of the final
liquidation distribution.
(7) See "Amending or Terminating the Indenture."
</FN>
Page 3
Fee Table
This Fee Table describes the fees and expenses that you may, directly or
indirectly, pay if you buy and hold Units of the Trust. See "Public
Offering" and "Expenses and Charges." Although the Trust has a term of
approximately five years and is a unit investment trust rather than a
mutual fund, this information allows you to compare fees.
Amount
per Unit
________
Unit Holder Sales Fees (as a percentage of public offering price)
Maximum Sales Charge
Initial sales charge 1.00%(a) $.100
Deferred sales charge 3.95%(b) $.395
_______ _______
Maximum Sales Charge 4.95% $.495
======= =======
Organization Costs (as a percentage of public offering price)
Estimated organization costs .290%(c) $.0290
======= =======
Estimated Annual Trust Operating Expenses(d)
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative and evaluation fees % $
Trustee's fee and other operating expenses %(e) $
Underlying Closed-End Fund Expenses %(f) $
________ ________
Total % $
======== ========
Example
This example is intended to help you compare the cost of investing in
the Trust with the cost of investing in other investment products. The
example assumes that you invest $10,000 in the Trust for the periods
shown and sell all your Units at the end of those periods. The example
also assumes a 5% return on your investment each year and that the
Trust's operating expenses stay the same. The example does not take into
consideration transaction fees which may be charged by certain
broker/dealers for processing redemption requests. Although your actual
costs may vary, based on these assumptions your costs would be:
1 Year 3 Years 5 Years
______ _______ _______
$ $ $
The example will not differ if you hold rather than sell your Units at
the end of each period.
______________
<FN>
(a) The initial sales charge is actually equal to the difference between
the maximum sales charge of 4.95% and any remaining deferred sales charge.
(b) The deferred sales charge is a fixed dollar amount equal to $.395 per
Unit which, as a percentage of the Public Offering Price, will vary over
time. The deferred sales charge will be deducted in 11 monthly
installments commencing February 20, 2004.
(c) Estimated organization costs will be deducted from the assets of the
Trust at the earlier of six months after the Initial Date of Deposit or
the end of the initial offering period.
(d) With the exception of the underlying Closed-End Fund expenses, each
of the fees listed herein is assessed on a fixed dollar amount per Unit
basis which, as a percentage of average net assets, will vary over time.
(e) Other operating expenses includes the costs incurred by the Trust for
annually updating the Trust's registration statement. Other operating
expenses, however, do not include brokerage costs and other portfolio
transaction fees for the Trust. In certain circumstances the Trust may
incur additional expenses not set forth above. See "Expenses and Charges."
(f) Although not an actual Trust operating expense, the Trust, and
therefore Unit holders, will indirectly bear similar operating expenses
of the closed-end funds in which the Trust invests in the estimated
amounts set forth in the table. These expenses are estimated based on
the actual closed-end fund expenses charged in a fund's most recent
fiscal year but are subject to change in the future. An investor in the
Trust will therefore indirectly pay higher expenses than if the
underlying closed-end fund shares were held directly.
</FN>
Page 4
Report of Independent Auditors
The Sponsor, First Trust Portfolios L.P., and Unit Holders
FT 783
We have audited the accompanying statement of net assets, including the
schedule of investments, of FT 783, comprising Advisor's Disciplined
Income Trust, Senior Variable Rate Closed-End Portfolio, Series 2003-16
(the "Trust"), as of the opening of business on December __, 2003
(Initial Date of Deposit). This statement of net assets is the
responsibility of the Trust's Sponsor. Our responsibility is to express
an opinion on this statement of net assets based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that
we plan and perform the audit to obtain reasonable assurance about
whether the statement of net assets is free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the statement of net assets. Our procedures
included confirmation of the irrevocable letter of credit held by The
Bank of New York, the Trustee, and deposited in the Trust for the
purchase of Securities, as shown in the statement of net assets, as of
the opening of business on December __, 2003, by correspondence with the
Trustee. An audit also includes assessing the accounting principles used
and significant estimates made by the Trust's Sponsor, as well as
evaluating the overall presentation of the statement of net assets. We
believe that our audit of the statement of net assets provides a
reasonable basis for our opinion.
In our opinion, the statement of net assets referred to above presents
fairly, in all material respects, the financial position of FT 783,
comprising Advisor's Disciplined Income Trust, Senior Variable Rate
Closed-End Portfolio, Series 2003-16, at the opening of business on
December __, 2003 (Initial Date of Deposit) in conformity with
accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Chicago, Illinois
December __, 2003
Page 5
Statement of Net Assets
Advisor's Disciplined Income Trust, Senior Variable Rate Closed-End
Portfolio, Series 2003-16
FT 783
At the Opening of Business on the
Initial Date of Deposit-December __, 2003
NET ASSETS
Investment in Securities represented by purchase contracts (1) (2) $
Less liability for reimbursement to Sponsor for organization costs (3) ( )
Less liability for deferred sales charge (4) ( )
________
Net assets $
========
Units outstanding
Net asset value per Unit (5) $
ANALYSIS OF NET ASSETS
Cost to investors (6) $
Less maximum sales charge (6) ( )
Less estimated reimbursement to Sponsor for organization costs (3) ( )
________
Net assets $
========
_____________
<FN>
NOTES TO STATEMENT OF NET ASSETS
(1) Aggregate cost of the Securities listed under "Schedule of
Investments" for the Trust is based on their aggregate underlying value.
(2) An irrevocable letter of credit issued by The Bank of New York, of
which $200,000 will be allocated to the Trust, has been deposited with
the Trustee as collateral, covering the monies necessary for the
purchase of the Securities according to their purchase contracts.
(3) A portion of the Public Offering Price consists of an amount
sufficient to reimburse the Sponsor for all or a portion of the costs of
establishing the Trust. These costs have been estimated at $.0290 per
Unit. A payment will be made at the earlier of six months after the
Initial Date of Deposit or the end of the initial offering period to an
account maintained by the Trustee from which the obligation of the
investors to the Sponsor will be satisfied. To the extent that actual
organization costs are greater than the estimated amount, only the
estimated organization costs added to the Public Offering Price will be
reimbursed to the Sponsor and deducted from the assets of the Trust.
(4) Represents the amount of mandatory deferred sales charge
distributions of $.395 per Unit, payable to the Sponsor in 11
approximately equal monthly installments beginning on February 20, 2004
and on the twentieth day of each month thereafter (or if such date is
not a business day, on the preceding business day) through December 20,
2004. If Unit holders redeem Units before December 20, 2004, they will
have to pay the remaining amount of the deferred sales charge applicable
to such Units when they redeem them.
(5) Net asset value per Unit is calculated by dividing the Trust's net
assets by the number of Units outstanding. This figure includes
organization costs, which will only be assessed to Units outstanding at
the close of the initial offering period.
(6) The aggregate cost to investors in the Trust includes a maximum
sales charge (comprised of an initial sales charge and a deferred sales
charge) computed at the rate of 4.95% of the Public Offering Price per
Unit (equivalent to 5.00% of the net amount invested, exclusive of the
deferred sales charge), assuming no reduction of the maximum sales
charge as set forth under "Public Offering."
</FN>
Page 6
Schedule of Investments
Advisor's Disciplined Income Trust, Senior Variable Rate Closed-End
Portfolio, Series 2003-16
FT 783
At the Opening of Business on the
Initial Date of Deposit-December __, 2003
Percentage Market Cost of
Number Ticker Symbol and of Aggregate Value Securities to
of Shares Name of Issuer of Securities (1) Offering Price per Share the Trust (2)
______ ________________________________ _________ ______ ________
% $ $
%
%
%
%
%
______ _________
Total Investments 100.00% $
====== =========
_____________
<FN>
(1) All Securities are represented by regular way contracts to purchase
such Securities which are backed by an irrevocable letter of credit
deposited with the Trustee. The Sponsor entered into purchase contracts
for the Securities on December __, 2003. Such purchase contracts are
expected to settle within three business days.
(2) The cost of the Securities to the Trust represents the aggregate
underlying value with respect to the Securities acquired (generally
determined by the closing sale prices of the listed Securities and the
ask prices of the over-the-counter traded Securities at the Evaluation
Time on the business day preceding the Initial Date of Deposit). The
valuation of the Securities has been determined by the Evaluator, an
affiliate of the Sponsor. The cost of the Securities to the Sponsor and
the Sponsor's profit or loss (which is the difference between the cost
of the Securities to the Sponsor and the cost of the Securities to the
Trust) are $ and $ , respectively.
</FN>
Page 7
The FT Series
The FT Series Defined.
We, First Trust Portfolios L.P. (the "Sponsor"), have created hundreds
of similar yet separate series of a unit investment trust which we have
named the FT Series. The series to which this prospectus relates, FT
783, consists of a single portfolio known as Advisor's Disciplined
Income Trust, Senior Variable Rate Closed-End Portfolio, Series 2003-16.
The Trust was created under the laws of the State of New York by a Trust
Agreement (the "Indenture") dated the Initial Date of Deposit. This
agreement, entered into among First Trust Portfolios L.P., as Sponsor,
The Bank of New York as Trustee and First Trust Advisors L.P. as
Portfolio Supervisor and Evaluator, governs the operation of the Trust.
YOU MAY GET MORE SPECIFIC DETAILS CONCERNING THE NATURE, STRUCTURE AND
RISKS OF THIS PRODUCT IN AN "INFORMATION SUPPLEMENT" BY CALLING THE
TRUSTEE AT 1-800-682-7520.
How We Created the Trust.
On the Initial Date of Deposit, we deposited a portfolio of common
stocks of Closed-End Funds with the Trustee and in turn, the Trustee
delivered documents to us representing our ownership of the Trust, in
the form of units ("Units").
After the Initial Date of Deposit, we may deposit additional Securities
in the Trust, or cash (including a letter of credit) with instructions
to buy more Securities, in order to create new Units for sale. If we
create additional Units, we will attempt, to the extent practicable, to
maintain the percentage relationship established among the Securities on
the Initial Date of Deposit (as set forth in "Schedule of Investments"),
and not the actual percentage relationship existing on the day we are
creating new Units, since the two may differ. This difference may be due
to the sale, redemption or liquidation of any of the Securities.
Since the prices of the Securities will fluctuate daily, the ratio of
Securities in the Trust, on a market value basis, will also change
daily. The portion of Securities represented by each Unit will not
change as a result of the deposit of additional Securities or cash in
the Trust. If we deposit cash, you and new investors may experience a
dilution of your investment. This is because prices of Securities will
fluctuate between the time of the cash deposit and the purchase of the
Securities, and because the Trust pays the associated brokerage fees. To
reduce this dilution, the Trust will try to buy the Securities as close
to the Evaluation Time and as close to the evaluation price as possible.
In addition, because the Trust pays the brokerage fees associated with
their creation of new Units and with the sale of Securities to meet
redemption and exchange requests, frequent redemption and exchange
activity will likely result in higher brokerage expenses.
An affiliate of the Trustee may receive these brokerage fees or the
Trustee may retain and pay us (or our affiliate) to act as agent for the
Trust to buy Securities. If we or an affiliate of ours act as agent to
the Trust we will be subject to the restrictions under the Investment
Company Act of 1940, as amended.
We cannot guarantee that the Trust will keep its present size and
composition for any length of time. Securities may periodically be sold
under certain circumstances, and the proceeds from these sales will be
used to meet Trust obligations or distributed to Unit holders, but will
not be reinvested. However, Securities will not be sold to take
advantage of market fluctuations or changes in anticipated rates of
appreciation or depreciation, or if they no longer meet the criteria by
which they were selected. You will not be able to dispose of or vote any
of the Securities in the Trust. As the holder of the Securities, the
Trustee will vote all of the Securities and will do so based on our
instructions.
Neither we nor the Trustee will be liable for a failure in any of the
Securities. However, if a contract for the purchase of any of the
Securities initially deposited in the Trust fails, unless we can
purchase substitute Securities ("Replacement Securities") we will refund
to you that portion of the purchase price and sales charge resulting
from the failed contract on the next Income Distribution Date. Any
Replacement Security the Trust acquires will be identical to those from
the failed contract.
Portfolio
Objectives.
The objective of the Trust is to provide investors with the potential
for high current income. The Trust seeks to achieve its objective by
investing in a diversified portfolio of common stocks of Closed-End
Funds, the portfolios of which are concentrated in senior corporate loans.
For investors seeking the potential for high current income with a
dividend that can adjust with interest rates movements, this new
portfolio has been created to answer this important need. This portfolio
Page 8
offers investors the opportunity to earn highly competitive yields
through a portfolio of five closed-end funds which invest primarily in
secured senior corporate loans to corporations, partnerships and other
business entities. These loans are backed by a company's assets and have
a senior position in a company's capital structure, ahead of other types
of debt securities, as well as preferred and common stock. Additionally,
the interest rates on senior loans generally float over published
interest rate indices which can move up or down with market rate
movements.
Features of Secured Senior Loan Investments.
Safety. Senior secured loans generally hold the most senior position in
a borrower's capital structure and are typically backed by assets such
as inventory, receivables, real estate property, buildings, etc. These
assets can also include intellectual property such as patents or
trademarks, and even the stock of other companies or subsidiaries. In
addition, while secured creditors generally receive greater protection
in insolvency situations, there is no assurance that collateral will be
sufficient to repay interest and/or principal in such situations.
Variable High Income Potential. Secured senior corporate loans have
historically paid a higher rate of interest than most short-term
investments. Since the underlying loan rates "float" above indices such
as Prime Rate or LIBOR, the interest rates realized by the closed-end
funds held by the Trust will generally adjust up or down with changes in
interest rates.
Sensitivity to Interest Rates. Since secured senior loans generally have
floating interest rates, they are typically not as sensitive as fixed-
income investments to price fluctuations due to changes in interest rates.
Risk-Adjusted Returns. Historically, senior floating rate loans have
displayed little correlation to the movements of U.S. common stocks,
high grade bonds, U.S. Government securities and other traditional
investments. Although past performance is no guarantee of future
results, from a risk-adjusted standpoint, this asset class has
historically provided superior risk-adjusted returns over time.
Greater Diversification. This type of portfolio offers diversification
by investing in several closed-end funds. These funds are diversified
across many companies and industries.
Portfolio Control. Since closed-end funds maintain a relatively fixed
pool of investment capital, portfolio managers are better able to adhere
to their investment philosophies through greater flexibility and
control. In addition, closed-end funds don't have to manage fund
liquidity to meet potentially large redemptions.
Professional Selection. The portfolio of the Trust was selected by Fixed
Income Securities, L.L.C. ("FIS").
You should be aware that predictions stated herein for a particular type
of security may not be realized. In addition, the Securities in the
Trust are not intended to be representative of the particular type of
security as a whole and the performance of the Trust is expected to
differ. Of course, as with any similar investments, there can be no
guarantee that the objective of the Trust will be achieved. See "Risk
Factors" for a discussion of the risks of investing in the Trust.
Risk Factors
Price Volatility. The Trust invests in common stocks of Closed-End
Funds. The value of the Trust's Units will fluctuate with changes in the
value of these common stocks. Common stock prices fluctuate for several
reasons including changes in investors' perceptions of the financial
condition of an issuer or the general condition of the relevant stock
market, such as the current market volatility, or when political or
economic events affecting the issuers occur. In addition, common stock
prices may be particularly sensitive to rising interest rates, as the
cost of capital rises and borrowing costs increase.
Because the Trust is not managed, the Trustee will not sell stocks in
response to or in anticipation of market fluctuations, as is common in
managed investments. As with any investment, we cannot guarantee that
the performance of the Trust will be positive over any period of time or
that you won't lose money. Units of the Trust are not deposits of any
bank and are not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency.
Closed-End Funds. Closed-End Funds are actively managed investment
companies which invest in various types of securities. Closed-End Funds
issue shares of common stock that are traded on a securities exchange.
Closed-End Funds are subject to various risks, including management's
ability to meet the Closed-End Fund's investment objective, and to
manage the Closed-End Fund portfolio when the underlying securities are
redeemed or sold, during periods of market turmoil and as investors'
perceptions regarding Closed-End Funds or their underlying investments
change.
Shares of Closed-End Funds frequently trade at a discount from their net
asset value in the secondary market. This risk is separate and distinct
from the risk that the net asset value of Closed-End Fund shares may
decrease. The amount of such discount from net asset value is subject to
change from time to time in response to various factors.
Page 9
Certain of the Closed-End Funds included in the Trust may employ the use
of leverage in their portfolios through the issuance of preferred stock
or borrowings. While leverage often serves to increase the yield of a
Closed-End Fund, this leverage also subjects the Closed-End Fund to
increased risks, including the likelihood of increased volatility and
the possibility that the Closed-End Fund's common share income will fall
if the dividend rate on the preferred shares or the interest rate on any
borrowings rises.
Senior Loans. All of the Closed-End Funds in the Trust invest in Senior
Loans issued by banks, other financial institutions and other investors
to corporations, partnerships, limited liability companies and other
entities to finance leveraged buyouts, recapitalizations, mergers,
acquisitions, stock repurchases, debt refinancings and, to a lesser
extent, for general operating and other purposes. An investment by
Closed-End Funds in Senior Loans involves risk that the borrowers under
Senior Loans may default on their obligations to pay principal or
interest when due. Although Senior Loans may be secured by specific
collateral, there can be no assurance that liquidation of collateral
would satisfy the borrower's obligation in the event of non-payment or
that such collateral could be readily liquidated. Senior Loans are
typically structured as floating rate instruments in which the interest
rate payable on the obligation fluctuates with interest rate changes. As
a result, the yield on Closed-End Funds investing in Senior Loans will
generally decline in a falling interest rate environment and increase in
a rising interest rate environment. Senior Loans are generally below
investment grade quality and may be unrated at the time of investment;
are generally not registered with the SEC or state securities
commissions; and are generally not listed on any securities exchange. In
addition, the amount of public information available on Senior Loans is
generally less extensive than that available for other types of assets.
High-Yield Securities. Certain of the Closed-End Funds in the Trust may
invest in securities rated below investment grade by one or more rating
agencies. These Securities are considered high-yield or "junk"
securities. High-yield, high risk securities are subject to greater
market fluctuations and risk of loss than securities with higher
investment ratings. The value of these securities will decline
significantly with increases in interest rates, not only because
increases in rates generally decrease values, but also because increased
rates may indicate an economic slowdown. An economic slowdown, or a
reduction in an issuer's creditworthiness, may result in the issuer
being unable to maintain earnings at a level sufficient to maintain
interest and principal payments.
High-yield or "junk" securities, the generic names for securities rated
below "Triple B" by Standard & Poor's or below Baa by Moody's, are
frequently issued by corporations in the growth stage of their
development or by established companies who are highly leveraged or
whose operations or industries are depressed. Obligations rated below
"Triple B" should be considered speculative as these ratings indicate a
quality of less than investment grade. Because high-yield securities are
generally subordinated obligations and are perceived by investors to be
riskier than higher rated securities, their prices tend to fluctuate
more than higher rated securities and are affected by short-term credit
developments to a greater degree.
The market for high-yield securities is smaller and less liquid than
that for investment grade securities. High-yield securities are
generally not listed on a national securities exchange but trade in the
over-the-counter markets. Due to the smaller, less liquid market for
high-yield securities, the bid-offer spread on such securities is
generally greater than it is for investment grade securities and the
purchase or sale of such securities may take longer to complete.
Distributions. As stated under "Summary of Essential Information," the
Trust will make monthly distributions of income. The Closed-End Funds
make distributions on a monthly or quarterly basis. As a result of
changing interest rates, refundings, sales or defaults on the underlying
bonds held by the Closed-End Funds, and other factors, there is no
guarantee that distributions will either remain at current levels or
increase over time.
Legislation/Litigation. From time to time, various legislative
initiatives are proposed which may have a negative impact on the prices
of certain Senior Loans owned by the Closed-End Funds represented in the
Trust. In addition, litigation regarding any of the borrowers or the
issuers of the Senior Loans owned by such Closed-End Funds, or of the
industries represented by such entities, may negatively impact the share
prices of these Securities. We cannot predict what impact any pending or
proposed legislation or pending or threatened litigation will have on
the share prices of the Securities or of the issuers of the underlying
bonds in which they invest.
Public Offering
The Public Offering Price.
You may buy Units at the Public Offering Price, the price per Unit of
which is comprised of the following:
- - The aggregate underlying value of the Securities;
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- - The amount of any cash in the Income and Capital Accounts;
- - Dividends receivable on Securities; and
- - The maximum sales charge (which combines an initial upfront sales
charge and a deferred sales charge).
The price you pay for your Units will differ from the amount stated
under "Summary of Essential Information" due to various factors,
including fluctuations in the prices of the Securities and changes in
the value of the Income and/or Capital Accounts.
Although you are not required to pay for your Units until three business
days following your order (the "date of settlement"), you may pay before
then. You will become the owner of Units ("Record Owner") on the date of
settlement if payment has been received. If you pay for your Units
before the date of settlement, we may use your payment during this time
and it may be considered a benefit to us, subject to the limitations of
the Securities Exchange Act of 1934.
Organization Costs. Securities purchased with the portion of the Public
Offering Price intended to be used to reimburse the Sponsor for the
Trust's organization costs (including costs of preparing the
registration statement, the Indenture and other closing documents,
registering Units with the Securities and Exchange Commission ("SEC")
and states, the initial audit of the Trust portfolio, legal fees and the
initial fees and expenses of the Trustee) will be purchased in the same
proportionate relationship as all the Securities contained in the Trust.
Securities will be sold to reimburse the Sponsor for the Trust's
organization costs at the earlier of six months after the Initial Date
of Deposit or the end of the initial offering period (a significantly
shorter time period than the life of the Trust). During the period
ending with the earlier of six months after the Initial Date of Deposit
or the end of the initial offering period, there may be a decrease in
the value of the Securities. To the extent the proceeds from the sale of
these Securities are insufficient to repay the Sponsor for Trust
organization costs, the Trustee will sell additional Securities to allow
the Trust to fully reimburse the Sponsor. In that event, the net asset
value per Unit of the Trust will be reduced by the amount of additional
Securities sold. Although the dollar amount of the reimbursement due to
the Sponsor will remain fixed and will never exceed the per Unit amount
set forth in "Notes to Statement of Net Assets," this will result in a
greater effective cost per Unit to Unit holders for the reimbursement to
the Sponsor. To the extent actual organization costs are less than the
estimated amount, only the actual organization costs will be deducted
from the assets of the Trust. When Securities are sold to reimburse the
Sponsor for organization costs, the Trustee will sell Securities, to the
extent practicable, which will maintain the same proportionate
relationship among the Securities contained in the Trust as existed
prior to such sale.
Minimum Purchase.
The minimum amount you can purchase of the Trust is $1,000 worth of Units.
Maximum Sales Charge.
The sales charge you will pay has both an initial and deferred
component. The initial sales charge, which you will pay at the time of
purchase, is equal to the difference between the maximum sales charge of
4.95% of the Public Offering Price and the maximum remaining deferred
sales charge (initially $.395 per Unit). This initial sales charge is
initially equal to approximately 1.00% of the Public Offering Price of a
Unit, but will vary from 1.00% depending on the purchase price of your
Units and as deferred sales charge payments are made. When the Public
Offering Price exceeds $10.00 per Unit, the initial sales charge will
exceed 1.00% of the Public Offering Price.
Monthly Deferred Sales Charge. In addition, 11 monthly deferred sales
charges of approximately $.036 per Unit will be deducted from the
Trust's assets on approximately the 20th day of each month from February
20, 2004 through December 20, 2004. If you buy Units at a price of less
than $10.00 per Unit, the dollar amount of the deferred sales charge
will not change, but the deferred sales charge on a percentage basis
will be more than 3.95% of the Public Offering Price.
If you purchase Units after the last deferred sales charge payment has
been assessed, your maximum sales charge will consist of a one-time
initial sales charge of 4.95% of the Public Offering Price (equivalent
to 5.208% of the net amount invested). The sales charge will be reduced
by 1/2 of 1% on each subsequent December 31, commencing December 31,
2004 to a minimum sales charge of 3.0%.
Discounts for Certain Persons.
If you invest at least $50,000 (except if you are purchasing for "Fee
Accounts" as described below), the maximum sales charge is reduced, as
follows:
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If you invest Your maximum sales
(in thousands):* charge will be:
_______________ ____________
$50 but less than $100 4.70%
$100 but less than $250 4.45%
$250 but less than $500 3.95%
$500 or more 2.95%
* The breakpoints will be adjusted to take into consideration purchase
orders stated in dollars which cannot be completely fulfilled due to the
requirement that only whole Units be issued.
The reduced sales charge for quantity purchases will apply only to
purchases made by the same person on any one day from any one dealer. To
help you reach the above levels, you can combine the Units you purchase
of the Trust in this prospectus with any other same day purchases of
other trusts for which we are Principal Underwriter and are currently in
the initial offering period. In addition, we will also consider Units
you purchase in the name of your spouse or child under 21 years of age
to be purchases by you. The reduced sales charges will also apply to a
trustee or other fiduciary purchasing Units for a single trust estate or
single fiduciary account. You must inform your dealer of any combined
purchases before the sale in order to be eligible for the reduced sales
charge. Any reduced sales charge is the responsibility of the party
making the sale.
You may use termination proceeds from other unit investment trusts with
a similar strategy as the Trust or your redemption or termination
proceeds from any unit investment trust we sponsor to purchase Units of
the Trust during the initial offering period at the Public Offering
Price less 1.00% (for purchases of $500,000 or more, the maximum sales
charge will be limited to 2.95% of the Public Offering Price). Please
note that if you purchase Units of the Trust in this manner using
redemption proceeds from trusts which assess the amount of any remaining
deferred sales charge at redemption, you should be aware that any
deferred sales charge remaining on these units will be deducted from
those redemption proceeds.
Investors purchasing Units through registered broker/dealers who charge
periodic fees in lieu of commissions or who charge for financial
planning, investment advisory or asset management services or provide
these or comparable services as part of an investment account where a
comprehensive "wrap fee" or similar charge is imposed ("Fee Accounts"),
may purchase Units at the Public Offering Price less 3.0%. See
"Distribution of Units-Dealer Concessions."
Employees, officers and directors (and immediate family members) of the
Sponsor, our related companies and dealers may purchase Units at the
Public Offering Price less the applicable dealer concession. Immediate
family members include spouses, children, grandchildren, parents,
grandparents, siblings, mothers-in-law, fathers-in-law, sons-in-law,
daughters-in-law, brothers-in-law and sisters-in-law, and trustees,
custodians or fiduciaries for the benefit of such persons.
The Sponsor and certain dealers may establish a schedule where
employees, officers and directors of such dealers can purchase Units of
the Trust at the Public Offering Price less the established schedule
amount, which is designed to compensate such dealers for activities
relating to the sale of Units (the "Employee Dealer Concession").
You will be charged the deferred sales charge per Unit regardless of any
discounts. However, if you are eligible to receive a discount such that
the maximum sales charge you must pay is less than the applicable
maximum deferred sales charge, including Fee Accounts Units, you will be
credited the difference between your maximum sales charge and the
maximum deferred sales charge at the time you buy your Units.
The Value of the Securities.
The Evaluator will determine the aggregate underlying value of the
Securities in the Trust as of the Evaluation Time on each business day
and will adjust the Public Offering Price of the Units according to this
valuation. This Public Offering Price will be effective for all orders
received before the Evaluation Time on each such day. If we or the
Trustee receive orders for purchases, sales or redemptions after that
time, or on a day which is not a business day, they will be held until
the next determination of price. The term "business day" as used in this
prospectus will exclude Saturdays, Sundays and certain national holidays
on which the NYSE is closed.
The aggregate underlying value of the Securities in the Trust will be
determined as follows: if the Securities are listed on a securities
exchange or The Nasdaq Stock Market, their value is generally based on
the closing sale prices on that exchange or system (unless it is
determined that these prices are not appropriate as a basis for
valuation). For purposes of valuing Securities traded on The Nasdaq
Stock Market, closing sale price shall mean the Nasdaq Official Closing
Price ("NOCP") as determined by Nasdaq. However, if there is no closing
sale price on that exchange or system, they are valued based on the
closing ask prices. If the Securities are not so listed, or, if so
listed and the principal market for them is other than on that exchange
or system, their value will generally be based on the current ask prices
on the over-the-counter market (unless it is determined that these
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prices are not appropriate as a basis for valuation). If current ask
prices are unavailable, the valuation is generally determined:
a) On the basis of current ask prices for comparable securities;
b) By appraising the value of the Securities on the ask side of the
market; or
c) By any combination of the above.
After the initial offering period is over, the aggregate underlying
value of the Securities will be determined as set forth above, except
that bid prices are used instead of ask prices when necessary.
Distribution of Units
We intend to qualify Units of the Trust for sale in a number of states.
All Units will be sold at the then current Public Offering Price.
Dealer Concessions.
FIS can purchase Units at prices which represent a concession or agency
commission of 4.25% of the Public Offering Price per Unit (or 65% of the
maximum sales charge for secondary market sales). However, for Units
which are purchased using redemption or termination proceeds, this
amount will be reduced to 3.25% of the sales price of these Units (2.25%
for purchases of $500,000 or more).
We reserve the right to change the amount of concessions or agency
commissions from time to time. Certain commercial banks may be making
Units of the Trust available to their customers on an agency basis. A
portion of the sales charge paid by these customers is kept by or given
to the banks in the amounts shown above.
Award Programs.
From time to time we may sponsor programs which provide awards to a
dealer's or selling agent's registered representatives who have sold a
minimum number of Units during a specified time period. We may also pay
fees to qualifying dealers for services or activities which are meant to
result in sales of Units of the Trust. In addition, we will pay to
dealers who sponsor sales contests or recognition programs that conform
to our criteria, or participate in our sales programs, amounts equal to
no more than the total applicable sales charges on Units sold by such
persons during such programs. We make these payments out of our own
assets and not out of Trust assets. These programs will not change the
price you pay for your Units.
Advertising and Investment Comparisons.
Advertising materials regarding the Trust may discuss several topics,
including: developing a long-term financial plan; working with your
financial professional; the nature and risks of various investment
strategies and unit investment trusts that could help you reach your
financial goals; the importance of discipline; how the Trust operates;
how securities are selected; various unit investment trust features such
as convenience and costs; and options available for certain types of
unit investment trusts. These materials may include descriptions of the
principal businesses of the companies represented in the Trust, research
analysis of why they were selected and information relating to the
qualifications of the persons or entities providing the research
analysis. In addition, they may include research opinions on the economy
and industry sectors included and a list of investment products
generally appropriate for pursuing those recommendations.
From time to time we may compare the estimated returns of the Trust
(which may show performance net of the expenses and charges the Trust
would have incurred) and returns over specified periods of other similar
trusts we sponsor in our advertising and sales materials, with (1)
returns on other taxable investments such as the common stocks
comprising various market indexes, corporate or U.S. Government bonds,
bank CDs and money market accounts or funds, (2) performance data from
Morningstar Publications, Inc. or (3) information from publications such
as Money, The New York Times, U.S. News and World Report, BusinessWeek,
Forbes or Fortune. The investment characteristics of the Trust differ
from other comparative investments. You should not assume that these
performance comparisons will be representative of the Trust's future
performance. We may also, from time to time, use advertising which
classifies trusts according to capitalization and/or investment style.
The Sponsor's Profits
We will receive a gross sales commission equal to the maximum sales
charge per Unit of the Trust less any reduction as stated in "Public
Offering." Also, any difference between our cost to purchase the
Securities and the price at which we sell them to the Trust is
considered a profit or loss (see Note 2 of "Schedule of Investments").
During the initial offering period, dealers and others may also realize
profits or sustain losses as a result of fluctuations in the Public
Offering Price they receive when they sell the Units.
Page 13
In maintaining a market for the Units, any difference between the price
at which we purchase Units and the price at which we sell or redeem them
will be a profit or loss to us.
The Secondary Market
Although not obligated, we intend to maintain a market for the Units
after the initial offering period and continuously offer to purchase
Units at prices based on the Redemption Price per Unit.
We will pay all expenses to maintain a secondary market, except the
Evaluator fees, Trustee costs to transfer and record the ownership of
Units and costs incurred in annually updating the Trust's registration
statement. We may discontinue purchases of Units at any time. IF YOU
WISH TO DISPOSE OF YOUR UNITS, YOU SHOULD ASK US FOR THE CURRENT MARKET
PRICES BEFORE MAKING A TENDER FOR REDEMPTION TO THE TRUSTEE. If you sell
or redeem your Units before you have paid the total deferred sales
charge on your Units, you will have to pay the remainder at that time.
How We Purchase Units
The Trustee will notify us of any tender of Units for redemption. If our
bid is equal to or greater than the Redemption Price per Unit, we may
purchase the Units. You will receive your proceeds from the sale no
later than if they were redeemed by the Trustee. We may tender Units we
hold to the Trustee for redemption as any other Units. If we elect not
to purchase Units, the Trustee may sell tendered Units in the over-the-
counter market, if any. However, the amount you will receive is the same
as you would have received on redemption of the Units.
Expenses and Charges
The estimated annual expenses of the Trust are listed under "Fee Table."
If actual expenses exceed the estimate, the appropriate Trust will bear
the excess, other than for excess annual audit costs. The Trustee will
pay operating expenses of the Trust from the Income Account of such
Trust if funds are available, and then from the Capital Account. The
Income and Capital Accounts are noninterest-bearing to Unit holders, so
the Trustee may earn interest on these funds, thus benefiting from their
use. In addition, investors will also indirectly pay a portion of the
expenses of the underlying Closed-End Funds.
First Trust Advisors L.P., an affiliate of ours, acts as Portfolio
Supervisor and Evaluator and will be compensated for providing portfolio
supervisory services and evaluation services as well as bookkeeping and
other administrative services to the Trust. In providing portfolio
supervisory services, the Portfolio Supervisor will purchase research
services from FIS for a fee not to exceed $.0025 per Unit sold. As
Sponsor, we will receive brokerage fees when the Trust uses us (or an
affiliate of ours) as agent in buying or selling Securities. Legal and
regulatory filing fees and expenses associated with updating the Trust's
registration statement yearly are also chargeable to the Trust.
The fees payable to First Trust Advisors L.P. and the Trustee are based
on the largest aggregate number of Units of the Trust outstanding at any
time during the calendar year, except during the initial offering
period, in which case these fees are calculated based on the largest
number of Units outstanding during the period for which compensation is
paid. These fees may be adjusted for inflation without Unit holders'
approval, but in no case will the annual fees paid to us or our
affiliates for providing services to all unit investment trusts be more
than the actual cost of providing such service in such year.
In addition to the Trust's operating expenses, and those fees described
above, the Trust may also incur the following charges:
- - All legal and annual auditing expenses of the Trustee according to
its responsibilities under the Indenture;
- - The expenses and costs incurred by the Trustee to protect the Trust
and your rights and interests;
- - Fees for any extraordinary services the Trustee performed under the
Indenture;
- - Payment for any loss, liability or expense the Trustee incurred
without negligence, bad faith or willful misconduct on its part, in
connection with its acceptance or administration of the Trust;
- - Payment for any loss, liability or expenses we incurred without
negligence, bad faith or willful misconduct in acting as Depositor of
the Trust; and/or
- - All taxes and other government charges imposed upon the Securities or
any part of the Trust.
The above expenses and the Trustee's annual fee are secured by a lien on
the respective Trust. In addition, if there is not enough cash in the
Income or Capital Accounts of the Trust, the Trustee has the power to
Page 14
sell Securities to make cash available to pay these charges which may
result in capital gains or losses to you. See "Tax Status."
The Trust will be audited annually, so long as we are making a secondary
market for Units. We will bear the cost of these annual audits to the
extent the cost exceeds $0.0050 per Unit. Otherwise, the Trust will pay
for the audit. You may request a copy of the audited financial
statements from the Trustee.
Tax Status
This section summarizes some of the main U.S. federal income tax
consequences of owning Units of the Trust. This section is current as of
the date of this prospectus. Tax laws and interpretations change
frequently, and this summary does not describe all of the tax
consequences to all taxpayers. For example, this summary generally does
not describe your situation if you are a corporation, a non-U.S. person,
a broker/dealer, or other investor with special circumstances. In
addition, this section does not describe your state, local or foreign
taxes. As with any investment, you should consult your own tax
professional about your particular consequences. In addition, the
Internal Revenue Service issued new withholding and reporting
regulations effective January 1, 2001. Foreign investors should consult
their own tax advisors regarding the tax consequences of these
regulations.
Assets of the Trust.
The Trust will hold shares of Closed-End Funds (the "Securities")
qualifying as regulated investment companies ("RICs"). For purposes of
this federal tax discussion, it is assumed that the Securities
constitute shares in an entity treated as a regulated investment company
for federal income tax purposes. All of the assets held by the Trust
constitute the "Trust Assets."
Trust Status.
The Trust will not be taxed as a corporation for federal income tax
purposes. As a Unit owner, you will be treated as the owner of a pro
rata portion of the Trust Assets held by the Trust, and as such you will
be considered to have received a pro rata share of income (e.g.,
dividends and capital gains, if any) from the Trust Assets when such
income would be considered to be received by you if you directly owned
the Trust Assets. In addition, the income from the Trust which you must
take into account for federal income tax purposes is not reduced by
amounts used to pay Trust expenses (including the deferred sales charge,
if any).
Your Tax Basis and Income or Loss upon Disposition.
If the Trust disposes of Trust Assets, you will generally recognize gain
or loss. If you dispose of your Units or redeem your Units for cash, you
will also generally recognize gain or loss. To determine the amount of
this gain or loss, you must subtract your tax basis in the related Trust
Assets from your share of the total amount received in the transaction.
You can generally determine your initial tax basis in the Trust Asset by
apportioning the cost of your Units, generally including sales charges,
among the Trust Asset ratably according to their value on the date you
purchase your Units. In certain circumstances, however, you may have to
adjust your tax basis after you purchase your Units (for example, in the
case of certain dividends paid to the Trust on the Securities that
exceed the RIC's accumulated earnings and profits).
Under the recently enacted "Jobs and Growth Tax Relief Reconciliation
Act of 2003" (the "Tax Act"), if you are an individual, the maximum
marginal federal tax rate for net capital gain is generally 15%
(generally 5% for certain taxpayers in the 10% and 15% tax brackets).
These new capital gains rates are generally effective for taxable years
ending on or after May 6, 2003 and beginning before January 1, 2009.
However, special effective date provisions are set forth in the Tax Act.
Net capital gain equals net long-term capital gain minus net short-term
capital loss for the taxable year. Capital gain or loss is long-term if
the holding period for the asset is more than one year and is short-term
if the holding period for the asset is one year or less. You must
exclude the date you purchase your Units to determine your holding
period. The tax rates for capital gains realized from assets held for
one year or less are generally the same as for ordinary income. The
Internal Revenue Code, however, treats certain capital gains as ordinary
income in special situations. In the case of capital gains dividends,
the determination of which portion of the capital gain dividend, if any,
that may be treated as long-term gain from property held for more than
five years eligible for the 18% (or 8%) tax rate will be made based on
regulations prescribed by the United States Treasury.
Dividends from Securities.
Some dividends on the Securities may qualify as "capital gain
dividends," generally taxable to you as long-term capital gains. Other
dividends on the Securities will generally be taxable to you as ordinary
income.
If you hold a Unit for six months or less or if the Trust holds a
Security for six months or less, any loss incurred by you related to the
Page 15
disposition of such Security generally will be treated as long-term
capital loss to the extent of any long-term capital gain distributions
received (or deemed to be received) with respect to such Security.
Distributions of income or capital gains declared on the Securities in
October, November, or December will be deemed to have been paid to you
on December 31 of the year they are declared, even when paid by the RIC
during the following January.
Distributions from the Trust attributable to dividends received from the
Securities will generally not be eligible for the dividends received
deduction for corporations.
In-Kind Distributions.
Under certain circumstances, as described in this prospectus, you may
request a distribution of Securities (an "In-Kind Distribution") when
you redeem your Units or at the Trust's termination. By electing to
receive an In-Kind Distribution, you will receive whole Securities plus,
possibly, cash.
You will not recognize gain or loss if you only receive Securities in
exchange for your pro rata portion of the Securities held by the Trust.
However, if you also receive cash in exchange for a Trust Asset or a
fractional share of a Trust Asset, you will generally recognize gain or
loss based on the difference between the amount of cash you receive and
your tax basis in such Trust Asset or fractional share.
Limitations on the Deductibility of Trust Expenses and Your Interest
Expenses.
Generally, for federal income tax purposes, you must take into account
your full pro rata share of the Trust's income, even if some of that
income is used to pay Trust expenses. You may deduct your pro rata share
of each expense paid by the Trust to the same extent as if you directly
paid the expense. You may, however, be required to treat some or all of
the expenses of the Trust as miscellaneous itemized deductions.
Individuals may only deduct certain miscellaneous itemized deductions to
the extent they exceed 2% of adjusted gross income.
State and Local Taxes.
Under the existing income tax laws of the State and City of New York,
the Trust will not be taxed as corporations, and the income of the Trust
will be treated as the income of the Unit holders in the same manner as
for federal income tax purposes.
Retirement Plans
You may purchase Units of the Trust for:
- - Individual Retirement Accounts,
- - Keogh Plans,
- - Pension funds, and
- - Other tax-deferred retirement plans.
Generally, the federal income tax on capital gains and income received
in each of the above plans is deferred until you receive distributions.
These distributions are generally treated as ordinary income but may, in
some cases, be eligible for special averaging or tax-deferred rollover
treatment. Before participating in a plan like this, you should review
the tax laws regarding these plans and consult your attorney or tax
adviser. Brokerage firms and other financial institutions offer these
plans with varying fees and charges.
Rights of Unit Holders
Unit Ownership.
The Trustee will treat as Record Owner of Units persons registered as
such on its books. It is your responsibility to notify the Trustee when
you become Record Owner, but normally your broker/dealer provides this
notice. You may elect to hold your Units in either certificated or
uncertificated form. All Fee Accounts Units, however, will be held in
uncertificated form.
Certificated Units. When you purchase your Units you can request that
they be evidenced by certificates, which will be delivered shortly after
your order. Certificates will be issued in fully registered form,
transferable only on the books of the Trustee in denominations of one
Unit or any multiple thereof. You can transfer or redeem your
certificated Units by endorsing and surrendering the certificate to the
Trustee, along with a written instrument of transfer. You must sign your
name exactly as it appears on the face of the certificate with your
signature guaranteed by an eligible institution. In certain cases the
Trustee may require additional documentation before they will transfer
or redeem your Units.
You may be required to pay a nominal fee to the Trustee for each
certificate reissued or transferred, and to pay any government charge
that may be imposed for each transfer or exchange. If a certificate gets
lost, stolen or destroyed, you may be required to furnish indemnity to
the Trustee to receive replacement certificates. You must surrender
mutilated certificates to the Trustee for replacement.
Page 16
Uncertificated Units. You may also choose to hold your Units in
uncertificated form. If you choose this option, the Trustee will
establish an account for you and credit your account with the number of
Units you purchase. Within two business days of the issuance or transfer
of Units held in uncertificated form, the Trustee will send you:
- - A written initial transaction statement containing a description of
the Trust;
- - A list of the number of Units issued or transferred;
- - Your name, address and Taxpayer Identification Number ("TIN");
- - A notation of any liens or restrictions of the issuer and any adverse
claims; and
- - The date the transfer was registered.
Uncertificated Units may be transferred the same way as certificated
Units, except that no certificate needs to be presented to the Trustee.
Also, no certificate will be issued when the transfer takes place unless
you request it. You may at any time request that the Trustee issue
certificates for your Units.
Unit Holder Reports.
In connection with each distribution, the Trustee will provide you with
a statement detailing the per Unit amount of income (if any)
distributed. After the end of each calendar year, the Trustee will
provide you:
- - A summary of transactions in the Trust for the year;
- - A list of any Securities sold during the year and the Securities held
at the end of that year by the Trust;
- - The Redemption Price per Unit, computed on the 31st day of December
of such year (or the last business day before); and
- - Amounts of income and capital distributed during the year.
You may request from the Trustee copies of the evaluations of the
Securities as prepared by the Evaluator to enable you to comply with
federal and state tax reporting requirements.
Income and Capital Distributions
You will begin receiving distributions on your Units only after you
become a Record Owner. The Trustee will credit any dividends received on
the Trust's Securities to the Income Account of such Trust. All other
receipts, such as return of capital, are credited to the Capital Account.
The Trustee will distribute any net income in the Income Account on or
near the Income Distribution Dates to Unit holders of record on the
preceding Income Distribution Record Date. See "Summary of Essential
Information." No income distribution will be paid if accrued expenses of
the Trust exceed amounts in the Income Account on the Income
Distribution Dates. Distribution amounts will vary with changes in the
Trust's fees and expenses, in dividends received and with the sale of
Securities. The Trustee will distribute amounts in the Capital Account,
net of amounts designated to meet redemptions, pay the deferred sales
charge or pay expenses on the last day of each month to Unit holders of
record on the fifteenth day of each month provided the amount equals at
least $1.00 per 100 Units. If the Trustee does not have your TIN, it is
required to withhold a certain percentage of your distribution and
deliver such amount to the Internal Revenue Service ("IRS"). You may
recover this amount by giving your TIN to the Trustee, or when you file
a tax return. However, you should check your statements to make sure the
Trustee has your TIN to avoid this "back-up withholding."
We anticipate that there will be enough money in the Capital Account of
the Trust to pay the deferred sales charge. If not, the Trustee may sell
Securities to meet the shortfall.
Within a reasonable time after the Trust is terminated, you will receive
the pro rata share of the money from the sale of the Securities.
However, if you are eligible, you may elect to receive an In-Kind
Distribution as described under "Amending or Terminating the Indenture."
You will receive a pro rata share of any other assets remaining in the
Trust after deducting any unpaid expenses.
The Trustee may establish reserves (the "Reserve Account") within the
Trust to cover anticipated state and local taxes or any governmental
charges to be paid out of such Trust.
Redeeming Your Units
You may redeem all or a portion of your Units at any time by sending the
certificates representing the Units you want to redeem to the Trustee at
its unit investment trust office. If your Units are uncertificated, you
need only deliver a request for redemption to the Trustee. In either
case, the certificates or the redemption request must be properly
endorsed with proper instruments of transfer and signature guarantees as
explained in "Rights of Unit Holders-Unit Ownership" (or by providing
satisfactory indemnity if the certificates were lost, stolen, or
destroyed). No redemption fee will be charged, but you are responsible
for any governmental charges that apply. Certain broker/dealers may
Page 17
charge a transaction fee for processing redemption requests. Units
redeemed directly through the Trustee are not subject to such
transaction fees. Three business days after the day you tender your
Units (the "Date of Tender") you will receive cash in an amount for each
Unit equal to the Redemption Price per Unit calculated at the Evaluation
Time on the Date of Tender.
The Date of Tender is considered to be the date on which the Trustee
receives your certificates or redemption request (if such day is a day
the NYSE is open for trading). However, if your certificates or
redemption request are received after 4:00 p.m. Eastern time (or after
any earlier closing time on a day on which the NYSE is scheduled in
advance to close at such earlier time), the Date of Tender is the next
day the NYSE is open for trading.
Any amounts paid on redemption representing income will be withdrawn
from the Income Account if funds are available for that purpose, or from
the Capital Account. All other amounts paid on redemption will be taken
from the Capital Account. The IRS will require the Trustee to withhold a
portion of your redemption proceeds if the Trustee does not have your
TIN, as generally discussed under "Income and Capital Distributions."
If you tender at least 2,500 Units, or such other amount as required by
your broker/dealer, for redemption, rather than receiving cash, you may
elect to receive an In-Kind Distribution in an amount equal to the
Redemption Price per Unit by making this request in writing to the
Trustee at the time of tender. However, to be eligible to participate in
the In-Kind Distribution option at redemption, Fee Accounts Unit holders
must hold their Units through the end of the initial offering period. No
In-Kind Distribution requests submitted during the nine business days
prior to the Trust's Mandatory Termination Date will be honored. Where
possible, the Trustee will make an In-Kind Distribution by distributing
each of the Securities in book-entry form to your bank or broker/dealer
account at the Depository Trust Company. The Trustee will subtract any
customary transfer and registration charges from your In-Kind
Distribution. As a tendering Unit holder, you will receive your pro rata
number of whole shares of the Securities that make up the portfolio, and
cash from the Capital Account equal to the fractional shares to which
you are entitled.
The Trustee may sell Securities to make funds available for redemption.
If Securities are sold, the size and diversification of such Trust will
be reduced. These sales may result in lower prices than if the
Securities were sold at a different time.
Your right to redeem Units (and therefore, your right to receive
payment) may be delayed:
- - If the NYSE is closed (other than customary weekend and holiday
closings);
- - If the SEC determines that trading on the NYSE is restricted or that
an emergency exists making sale or evaluation of the Securities not
reasonably practical; or
- - For any other period permitted by SEC order.
The Trustee is not liable to any person for any loss or damage which may
result from such a suspension or postponement.
The Redemption Price.
The Redemption Price per Unit is determined by the Trustee by:
adding
1. cash in the Income and Capital Accounts of the Trust not designated
to purchase Securities;
2. the aggregate underlying value of the Securities held in the Trust; and
3. dividends receivable on the Securities trading ex-dividend as of the
date of computation; and
deducting
1. any applicable taxes or governmental charges that need to be paid out
of the Trust;
2. any amounts owed to the Trustee for its advances;
3. estimated accrued expenses of the Trust, if any;
4. cash held for distribution to Unit holders of record of the Trust as
of the business day before the evaluation being made; and
5. other liabilities incurred by the Trust; and
dividing
1. the result by the number of outstanding Units of the Trust.
Any remaining deferred sales charge on the Units when you redeem them
will be deducted from your redemption proceeds. In addition, until the
earlier of six months after the Initial Date of Deposit or the end of
the initial offering period, the Redemption Price per Unit will include
estimated organization costs as set forth under "Fee Table."
Removing Securities from the Trust
The portfolio of the Trust is not managed. However, we may, but are not
required to, direct the Trustee to dispose of a Security in certain
limited circumstances, including situations in which:
- - The issuer of the Security defaults in the payment of a declared
dividend;
Page 18
- - Any action or proceeding prevents the payment of dividends;
- - There is any legal question or impediment affecting the Security;
- - The issuer of the Security has breached a covenant which would affect
the payment of dividends, the issuer's credit standing, or otherwise
damage the sound investment character of the Security;
- - The issuer has defaulted on the payment of any other of its
outstanding obligations;
- - There has been a public tender offer made for a Security or a merger
or acquisition is announced affecting a Security, and that in our
opinion the sale or tender of the Security is in the best interest of
Unit holders; or
- - The price of the Security has declined to such an extent, or such
other credit factors exist, that in our opinion keeping the Security
would be harmful to the Trust.
Except in the limited instance in which the Trust acquires Replacement
Securities, as described in "The FT Series," the Trust may not acquire
any securities or other property other than the Securities. The Trustee,
on behalf of the Trust, will reject any offer for new or exchanged
securities or property in exchange for a Security, such as those
acquired in a merger or other transaction. If such exchanged securities
or property are nevertheless acquired by the Trust, at our instruction,
they will either be sold or held in such Trust. In making the
determination as to whether to sell or hold the exchanged securities or
property we may get advice from the Portfolio Supervisor. Any proceeds
received from the sale of Securities, exchanged securities or property
will be credited to the Capital Account of the Trust for distribution to
Unit holders or to meet redemption requests. The Trustee may retain and
pay us or an affiliate of ours to act as agent for the Trust to
facilitate selling Securities, exchanged securities or property from the
Trust. If we or our affiliate act in this capacity, we will be held
subject to the restrictions under the Investment Company Act of 1940, as
amended.
The Trustee may sell Securities designated by us; or, absent our
direction, at its own discretion, in order to meet redemption requests
or pay expenses. In designating Securities to be sold, we will try to
maintain the proportionate relationship among the Securities. If this is
not possible, the composition and diversification of the Trust may be
changed. To get the best price for the Trust we may have to specify
minimum amounts (generally 100 shares) in which blocks of Securities are
to be sold. We may consider sales of units of unit investment trusts
which we sponsor when we make recommendations to the Trustee as to which
broker/dealers they select to execute the Trust's portfolio
transactions, or when acting as agent for the Trust in acquiring or
selling Securities on behalf of such Trust.
Amending or Terminating the Indenture
Amendments. The Indenture may be amended by us and the Trustee 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 interests (as determined by us and the Trustee).
Termination. As provided by the Indenture, the Trust will terminate on
the Mandatory Termination Date as stated in the "Summary of Essential
Information." The Trust may be terminated earlier:
- - Upon the consent of 100% of the Unit holders of the Trust;
- - If the value of the Securities owned by the Trust as shown by any
evaluation is less than the lower of $2,000,000 or 20% of the total
value of Securities deposited in such Trust during the initial offering
period ("Discretionary Liquidation Amount"); or
- - In the event that Units of the Trust not yet sold aggregating more
than 60% of the Units of such Trust are tendered for redemption by
underwriters, including the Sponsor.
Prior to termination, the Trustee will send written notice to registered
account holders which will specify how certificates, if any, should be
tendered to the Trustee. If the Trust is terminated due to this last
reason, we will refund your entire sales charge; however, termination of
the Trust before the Mandatory Termination Date for any other stated
reason will result in all remaining unpaid deferred sales charges on
your Units being deducted from your termination proceeds. For various
reasons, the Trust may be reduced below the Discretionary Liquidation
Amount and could therefore be terminated before the Mandatory
Termination Date.
Unless terminated earlier, the Trustee will begin to sell Securities in
connection with the termination of the Trust during the period beginning
nine business days prior to, and no later than, the Mandatory
Termination Date. We will determine the manner and timing of the sale of
Securities. Because the Trustee must sell the Securities within a
Page 19
relatively short period of time, the sale of Securities as part of the
termination process may result in a lower sales price than might
otherwise be realized if such sale were not required at this time.
If you own at least 2,500 Units of the Trust, or such other amount as
required by your broker/dealer, the Trustee will send the registered
account holders a form at least 30 days prior to the Mandatory
Termination Date which will enable you to receive an In-Kind
Distribution of Securities (reduced by customary transfer and
registration charges and subject to any additional restrictions imposed
on Fee Accounts Units by "wrap fee" plans) rather than the typical cash
distribution. You must notify the Trustee at least ten business days
prior to the Mandatory Termination Date if you elect this In-Kind
Distribution option. If you do not elect to participate in the In-Kind
Distribution option for eligible Unit holders you will receive a cash
distribution from the sale of the remaining Securities, along with your
interest in the Income and Capital Accounts, within a reasonable time
after such Trust is terminated. Regardless of the distribution involved,
the Trustee will deduct from the Trust any accrued costs, expenses,
advances or indemnities provided for by the Indenture, including
estimated compensation of the Trustee and costs of liquidation and any
amounts required as a reserve to pay any taxes or other governmental
charges.
Information on the Sponsor, Trustee and Evaluator
The Sponsor.
We, First Trust Portfolios L.P., specialize in the underwriting, trading
and wholesale distribution of unit investment trusts under the "First
Trust" brand name and other securities. An Illinois limited partnership
formed in 1991, we act as Sponsor for successive series of:
- - The First Trust Combined Series
- - FT Series (formerly known as The First Trust Special Situations Trust)
- - The First Trust Insured Corporate Trust
- - The First Trust of Insured Municipal Bonds
- - The First Trust GNMA
First Trust introduced the first insured unit investment trust in 1974.
To date we have deposited more than $43 billion in First Trust unit
investment trusts. Our employees include a team of professionals with
many years of experience in the unit investment trust industry.
We are a member of the National Association of Securities Dealers, Inc.
and Securities Investor Protection Corporation. Our principal offices
are at 1001 Warrenville Road, Lisle, Illinois 60532; telephone number
(630) 241-4141. As of December 31, 2002, the total consolidated
partners' capital of First Trust Portfolios L.P. and subsidiary was
$15,580,362 (audited).
This information refers only to the Sponsor and not to the Trust or to
any series of the Trust or to any other dealer. We are including this
information only to inform you of our financial responsibility and our
ability to carry out our contractual obligations. We will provide more
detailed financial information on request.
Code of Ethics. The Sponsor and the Trust have adopted a code of ethics
requiring the Sponsor's employees who have access to information on
Trust transactions to report personal securities transactions. The
purpose of the code is to avoid potential conflicts of interest and to
prevent fraud, deception or misconduct with respect to the Trust.
The Trustee.
The Trustee is The Bank of New York, a trust company organized under the
laws of New York. The Bank of New York has its unit investment trust
division offices at 101 Barclay Street, New York, New York 10286,
telephone (800) 221-7668. If you have questions regarding your account
or your Trust, please contact the Trustee at its unit investment trust
division offices or your financial adviser. The Sponsor does not have
access to individual account information. The Bank of New York is
subject to supervision and examination by the Superintendent of Banks of
the State of New York and the Board of Governors of the Federal Reserve
System, and its deposits are insured by the Federal Deposit Insurance
Corporation to the extent permitted by law.
The Trustee has not participated in selecting the Securities; it only
provides administrative services.
Limitations of Liabilities of Sponsor and Trustee.
Neither we nor the Trustee will be liable for taking any action or for
not taking any action in good faith according to the Indenture. We will
also not be accountable for errors in judgment. We will only be liable
for our own willful misfeasance, bad faith, gross negligence (ordinary
negligence in the Trustee's case) or reckless disregard of our
obligations and duties. The Trustee is not liable for any loss or
depreciation when the Securities are sold. If we fail to act under the
Indenture, the Trustee may do so, and the Trustee will not be liable for
any action it takes in good faith under the Indenture.
The Trustee will not be liable for any taxes or other governmental
charges or interest on the Securities which the Trustee may be required
Page 20
to pay under any present or future law of the United States or of any
other taxing authority with jurisdiction. Also, the Indenture states
other provisions regarding the liability of the Trustee.
If we do not perform any of our duties under the Indenture or are not
able to act or become bankrupt, or if our affairs are taken over by
public authorities, then the Trustee may:
- - Appoint a successor sponsor, paying them a reasonable rate not more
than that stated by the SEC,
- - Terminate the Indenture and liquidate the Trust, or
- - Continue to act as Trustee without terminating the Indenture.
The Evaluator.
The Evaluator is First Trust Advisors L.P., an Illinois limited
partnership formed in 1991 and an affiliate of the Sponsor. The
Evaluator's address is 1001 Warrenville Road, Lisle, Illinois 60532.
The Trustee, Sponsor and Unit holders may rely on the accuracy of any
evaluation prepared by the Evaluator. The Evaluator will make
determinations in good faith based upon the best available information,
but will not be liable to the Trustee, Sponsor or Unit holders for
errors in judgment.
Other Information
Legal Opinions.
Our counsel is Chapman and Cutler LLP, 111 W. Monroe St., Chicago,
Illinois 60603. They have passed upon the legality of the Units offered
hereby and certain matters relating to federal tax law. Emmet, Marvin &
Martin, LLP acts as the Trustee's counsel, as well as special New York
tax counsel for the Trust.
Experts.
The Trust's statement of net assets, including the schedule of
investments, as of the opening of business on the Initial Date of
Deposit included in this prospectus has been audited by Deloitte &
Touche LLP, independent auditors, as stated in their report appearing
herein, and is included in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.
Supplemental Information.
If you write or call the Trustee, you will receive free of charge
supplemental information about this Series, which has been filed with
the SEC and to which we have referred throughout. This information
states more specific details concerning the nature, structure and risks
of this product.
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Page 23
First Trust(R)
Advisor's Disciplined Income Trust, Senior Variable Rate Closed-End
Portfolio, Series 2003-16
FT 783
Sponsor:
FIRST TRUST PORTFOLIOS L.P.
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-630-241-4141
Trustee:
The Bank of New York
101 Barclay Street
New York, New York 10286
1-800-221-7668
24-Hour Pricing Line:
1-800-XXX-XXXX
Advisor's Asset Management, division of Fixed Income Securities, L.L.C. -
Member NASD/SIPC, principal distributor of the Trust, can be reached at
1-888-969-2663
This prospectus contains information relating to Advisor's Disciplined
Income Trust, Senior Variable Rate Closed-End Portfolio, Series 2003-16,
but does not contain all of the information about this investment
company as filed with the Securities and Exchange Commission in
Washington, D.C. under the:
- - Securities Act of 1933 (file no. 333-______) and
- - Investment Company Act of 1940 (file no. 811-05903)
Information about the Trust, including its Code of Ethics, can be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington D.C. Information regarding the operation of
the Commission's Public Reference Room may be obtained by calling the
Commission at
1-202-942-8090.
Information about the Trust is available on the EDGAR Database on the
Commission's Internet site at
http://www.sec.gov.
To obtain copies at prescribed rates -
Write: Public Reference Section of the Commission
450 Fifth Street, N.W.
Washington, D.C. 20549-0102
e-mail address: publicinfo@sec.gov
December __, 2003
PLEASE RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE
Page 24
First Trust(R)
The FT Series
Information Supplement
This Information Supplement provides additional information concerning
the structure, operations and risks of the unit investment trust
("Trust") contained in FT 783 not found in the prospectus for the Trust.
This Information Supplement is not a prospectus and does not include all
of the information that a prospective investor should consider before
investing in the Trust. This Information Supplement should be read in
conjunction with the prospectus for the Trust in which an investor is
considering investing.
This Information Supplement is dated December __, 2003. Capitalized
terms have been defined in the prospectus.
Table of Contents
Risk Factors
Securities 1
High-Yield Securities 2
Senior Corporate Loans 3
Risk Factors.
Securities. The Securities in the Trust represent shares of closed-end
mutual funds which invest in senior corporate loans. As such, an
investment in Units of the Trust should be made with an understanding of
the risks of investing in both closed-end fund shares and senior
corporate loans.
Closed-end mutual funds' portfolios are managed and their shares are
generally listed on a securities exchange. The net asset value of closed-
end fund shares will fluctuate with changes in the value of the
underlying securities which the closed-end fund owns. In addition, for
various reasons closed-end fund shares frequently trade at a discount
from their net asset value in the secondary market. The amount of such
discount from net asset value is subject to change from time to time in
response to various factors. Closed-end funds' articles of incorporation
may contain certain anti-takeover provisions that may have the effect of
inhibiting a fund's possible conversion to open-end status and limiting
the ability of other persons to acquire control of a fund. In certain
circumstances, these provisions might also inhibit the ability of
stockholders (including the Trust) to sell their shares at a premium
over prevailing market prices. This characteristic is a risk separate
and distinct from the risk that a fund's net asset value will decrease.
In particular, this characteristic would increase the loss or reduce the
return on the sale of those closed-end fund shares which were purchased
by the Trust at a premium. In the unlikely event that a closed-end fund
converts to open-end status at a time when its shares are trading at a
premium there would be an immediate loss in value to the Trust since
shares of open-end funds trade at net asset value. Certain closed-end
funds may have in place or may put in place in the future plans pursuant
to which the fund may repurchase its own shares in the marketplace.
Typically, these plans are put in place in an attempt by a fund's board
of directors to reduce a discount on its share price. To the extent such
a plan was implemented and shares owned by the Trust are repurchased by
a fund, the Trust's position in that fund would be reduced and the cash
would be distributed.
The Trust is prohibited from subscribing to a rights offering for shares
of any of the closed-end funds in which it invests. In the event of a
rights offering for additional shares of a fund, Unit holders should
expect that the Trust will, at the completion of the offer, own a
smaller proportional interest in such fund that would otherwise be the
case. It is not possible to determine the extent of this dilution in
share ownership without knowing what proportion of the shares in a
rights offering will be subscribed. This may be particularly serious
when the subscription price per share for the offer is less than the
fund's net asset value per share. Assuming that all rights are exercised
and there is no change in the net asset value per share, the aggregate
net asset value of each shareholder's shares of common stock should
decrease as a result of the offer. If a fund's subscription price per
share is below that fund's net asset value per share at the expiration
of the offer, shareholders would experience an immediate dilution of the
aggregate net asset value of their shares of common stock as a result of
the offer, which could be substantial.
Page 1
Closed-end funds may utilize leveraging in their portfolios. Leveraging
can be expected to cause increased price volatility for those fund's
shares, and as a result, increased volatility for the price of the Units
of the Trust. There can be no assurance that a leveraging strategy will
be successful during any period in which it is employed.
High-Yield Securities. An investment in Units of the Trust should be
made with an understanding of the risks that an investment in "high-
yield, high-risk," fixed-rate, domestic and foreign debt obligations or
"junk securities" may entail, including increased credit risks and the
risk that the value of the Units will decline, and may decline
precipitously, with increases in interest rates. In recent years there
have been wide fluctuations in interest rates and thus in the value of
fixed-rate, debt obligations generally. Securities such as those
included in the funds in the Trust are, under most circumstances,
subject to greater market fluctuations and risk of loss of income and
principal than are investments in lower-yielding, higher-rated
securities, and their value may decline precipitously because of
increases in interest rates, not only because the increases in rates
generally decrease values, but also because increased rates may indicate
a slowdown in the economy and a decrease in the value of assets
generally that may adversely affect the credit of issuers of high-yield,
high-risk securities resulting in a higher incidence of defaults among
high-yield, high-risk securities. A slowdown in the economy, or a
development adversely affecting an issuer's creditworthiness, may result
in the issuer being unable to maintain earnings or sell assets at the
rate and at the prices, respectively, that are required to produce
sufficient cash flow to meet its interest and principal requirements.
For an issuer that has outstanding both senior commercial bank debt and
subordinated high-yield, high-risk securities, an increase in interest
rates will increase that issuer's interest expense insofar as the
interest rate on the bank debt is fluctuating. However, many leveraged
issuers enter into interest rate protection agreements to fix or cap the
interest rate on a large portion of their bank debt. This reduces
exposure to increasing rates, but reduces the benefit to the issuer of
declining rates. The Sponsor cannot predict future economic policies or
their consequences or, therefore, the course or extent of any similar
market fluctuations in the future.
"High-yield" or "junk" securities, the generic names for securities
rated below BBB by Standard & Poor's, or below Baa by Moody's, are
frequently issued by corporations in the growth stage of their
development, by established companies whose operations or industries are
depressed or by highly leveraged companies purchased in leveraged buyout
transactions. The market for high-yield securities is very specialized
and investors in it have been predominantly financial institutions. High-
yield securities are generally not listed on a national securities
exchange. Trading of high-yield securities, therefore, takes place
primarily in over-the-counter markets which consist of groups of dealer
firms that are typically major securities firms. Because the high-yield
security market is a dealer market, rather than an auction market, no
single obtainable price for a given security prevails at any given time.
Prices are determined by negotiation between traders. The existence of a
liquid trading market for the securities may depend on whether dealers
will make a market in the securities. There can be no assurance that a
market will be made for any of the securities, that any market for the
securities will be maintained or of the liquidity of the securities in
any markets made. Not all dealers maintain markets in all high-yield
securities. Therefore, since there are fewer traders in these securities
than there are in "investment grade" securities, the bid-offer spread is
usually greater for high-yield securities than it is for investment
grade securities. The price at which the securities may be sold to meet
redemptions and the value of the Trust will be adversely affected if
trading markets for the securities are limited or absent. If the rate of
redemptions is great, the value of the Trust may decline to a level that
requires liquidation.
Lower-rated securities tend to offer higher yields than higher-rated
securities with the same maturities because the creditworthiness of the
issuers of lower-rated securities may not be as strong as that of other
issuers. Moreover, if a security is recharacterized as equity by the
Internal Revenue Service for federal income tax purposes, the issuer's
interest deduction with respect to the security will be disallowed and
this disallowance may adversely affect the issuer's credit rating.
Because investors generally perceive that there are greater risks
associated with the lower-rated securities in the Trust, the yields and
prices of these securities tend to fluctuate more than higher-rated
securities with changes in the perceived quality of the credit of their
issuers. In addition, the market value of high-yield, high-risk, fixed-
income securities may fluctuate more than the market value of higher-
rated securities since high-yield, high-risk, fixed-income securities
tend to reflect short-term credit development to a greater extent than
higher-rated securities. Lower-rated securities generally involve
greater risks of loss of income and principal than higher-rated
securities. Issuers of lower-rated securities may possess fewer
creditworthiness characteristics than issuers of higher-rated securities
and, especially in the case of issuers whose obligations or credit
standing have recently been downgraded, may be subject to claims by
debtholders, owners of property leased to the issuer or others which, if
sustained, would make it more difficult for the issuers to meet their
payment obligations. High-yield, high-risk securities are also affected
Page 2
by variables such as interest rates, inflation rates and real growth in
the economy. Therefore, investors should consider carefully the relative
risks associated with investment in securities which carry lower ratings.
The value of the Units reflects the value of the portfolio securities,
including the value (if any) of securities in default. Should the issuer
of any security default in the payment of principal or interest, the
funds in the Trust may incur additional expenses seeking payment on the
defaulted security. Because amounts (if any) recovered by the funds in
payment under the defaulted security may not be reflected in the value
of the fund shares until actually received by the funds, and depending
upon when a Unit holder purchases or sells his or her Units, it is
possible that a Unit holder would bear a portion of the cost of recovery
without receiving any portion of the payment recovered.
High-yield, high-risk securities are generally subordinated obligations.
The payment of principal (and premium, if any), interest and sinking
fund requirements with respect to subordinated obligations of an issuer
is subordinated in right of payment to the payment of senior obligations
of the issuer. Senior obligations generally include most, if not all,
significant debt obligations of an issuer, whether existing at the time
of issuance of subordinated debt or created thereafter. Upon any
distribution of the assets of an issuer with subordinated obligations
upon dissolution, total or partial liquidation or reorganization of or
similar proceeding relating to the issuer, the holders of senior
indebtedness will be entitled to receive payment in full before holders
of subordinated indebtedness will be entitled to receive any payment.
Moreover, generally no payment with respect to subordinated indebtedness
may be made while there exists a default with respect to any senior
indebtedness. Thus, in the event of insolvency, holders of senior
indebtedness of an issuer generally will recover more, ratably, than
holders of subordinated indebtedness of that issuer.
Obligations that are rated lower than "BBB" by Standard & Poor's, or Baa
by Moody's, respectively, should be considered speculative as such
ratings indicate a quality of less than investment grade. Investors
should carefully review the objective of the Trust and consider their
ability to assume the risks involved before making an investment in such
Trust.
Senior Corporate Loans.
All of the Closed-End Funds in the Trust invest in Senior Loans issued
by banks, other financial institutions, and other investors to
corporations, partnerships, limited liability companies and other
entities to finance leveraged buyouts, recapitalizations, mergers,
acquisitions, stock repurchases, debt refinancings and, to a lesser
extent, for general operating and other purposes. An investment by
Closed-End Funds in Senior Loans involves risk that the borrowers under
Senior Loans may default on their obligations to pay principal or
interest when due. Although Senior Loans may be secured by specific
collateral, there can be no assurance that liquidation of collateral
would satisfy the borrower's obligation in the event of non-payment or
that such collateral could be readily liquidated. Senior Loans are
typically structured as floating rate instruments in which the interest
rate payable on the obligation fluctuates with interest rate changes. As
a result, the yield on Closed-End Funds investing in Senior Loans will
generally decline in a falling interest rate environment and increase in
a rising interest rate environment. Senior Loans are generally below
investment grade quality and may be unrated at the time of investment;
are generally not registered with the SEC or state securities
commissions; and are generally not listed on any securities exchange. In
addition, the amount of public information available on Senior Loans is
generally less extensive than that available for other types of assets.
Page 3
MEMORANDUM
Re: FT 783
The only difference of consequence (except as described
below) between FT 775, which is the current fund, and FT 783, the
filing of which this memorandum accompanies, is the change in the
series number. The list of securities comprising the Fund, the
evaluation, record and distribution dates and other changes
pertaining specifically to the new series, such as size and
number of Units in the Fund and the statement of condition of the
new Fund, will be filed by amendment.
1940 ACT
FORMS N-8A AND N-8B-2
These forms were not filed, as the Form N-8A and Form N-8B-2
filed in respect of Templeton Growth and Treasury Trust, Series 1
and subsequent series (File No. 811-05903) related also to the
subsequent series of the Fund.
1933 ACT
PROSPECTUS
The only significant changes in the Prospectus from the
Series 775 Prospectus relate to the series number and size and
the date and various items of information which will be derived
from and apply specifically to the securities deposited in the
Fund.
CONTENTS OF REGISTRATION STATEMENT
ITEM A Bonding Arrangements of Depositor:
First Trust Portfolios, L.P. is covered by a Broker's
Fidelity Bond, in the total amount of $2,000,000, the
insurer being National Union Fire Insurance Company of
Pittsburgh.
ITEM B This Registration Statement on Form S-6 comprises the
following papers and documents:
The facing sheet
The Prospectus
The signatures
Exhibits
S-1
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, FT 783 has duly caused this Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the Village of Lisle and State of
Illinois on December 1, 2003.
FT 783
(Registrant)
By: FIRST TRUST PORTFOLIOS, L.P.
(Depositor)
By: Robert M. Porcellino
Senior Vice President
S-2
Pursuant to the requirements of the Securities Act of 1933,
this Amendment to the Registration Statement has been signed
below by the following person in the capacity and on the date
indicated:
NAME TITLE* DATE
David J. Allen Director )
of The Charger )
Corporation, the ) December 1, 2003
General Partner of )
First Trust )
Portfolios, L.P. )
Judith M. Van Kampen Director )
of The Charger ) Robert M. Porcellino
Corporation, the ) Attorney-in-Fact**
General Partner of )
First Trust )
Portfolios, L.P. )
Karla M. Van Kampen-Pierre Director )
of The Charger )
Corporation, the )
General Partner of )
First Trust )
Portfolios, L.P. )
David G. Wisen Director )
of The Charger )
Corporation, the )
General Partner of )
First Trust )
Portfolios, L.P. )
* The title of the person named herein represents his
or her capacity in and relationship to First Trust
Portfolios, L.P., Depositor.
** An executed copy of the related power of attorney
was filed with the Securities and Exchange Commission in
connection with the Amendment No. 1 to Form S-6 of FT 597
(File No. 333-76518) and the same is hereby incorporated
herein by this reference.
S-3
CONSENTS OF COUNSEL
The consents of counsel to the use of their names in the
Prospectus included in this Registration Statement will be
contained in their respective opinions to be filed as Exhibits
3.1, 3.2, and 3.3 of the Registration Statement.
CONSENT OF DELOITTE & TOUCHE LLP
The consent of Deloitte & Touche LLP to the use of its name
and to the reference to such firm in the Prospectus included in
this Registration Statement will be filed by amendment.
CONSENT OF FIRST TRUST ADVISORS L.P.
The consent of First Trust Advisors L.P. to the use of its
name in the Prospectus included in the Registration Statement is
filed as Exhibit 4.1 to the Registration Statement.
S-4
EXHIBIT INDEX
1.1* Form of Standard Terms and Conditions of Trust for FT 783
among First Trust Portfolios, L.P., as Depositor, The
Bank of New York, as Trustee and First Trust Advisors
L.P., as Evaluator and Portfolio Supervisor.
1.1.1* Form of Trust Agreement for FT 783 among First Trust
Portfolios, L.P., as Depositor, The Bank of New York, as
Trustee and First Trust Advisors L.P., as Evaluator and
Portfolio Supervisor.
1.2 Copy of Certificate of Limited Partnership of First Trust
Portfolios, L.P. (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.3 Copy of Amended and Restated Limited Partnership
Agreement of First Trust Portfolios, L.P. (incorporated
by reference to Amendment No. 1 to Form S-6 [File No.
33-42683] filed on behalf of The First Trust Special
Situations Trust, Series 18).
1.4 Copy of Articles of Incorporation of The Charger
Corporation, the general partner of First Trust
Portfolios, L.P., Depositor (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42683] filed on
behalf of The First Trust Special Situations Trust,
Series 18).
1.5 Copy of By-Laws of The Charger Corporation, the general
partner of First Trust Portfolios, L.P., Depositor
(incorporated by reference to Amendment No. 1 to Form S-6
[File No. 33-42683] filed on behalf of The First Trust
Special Situations Trust, Series 18).
2.1 Copy of Certificate of Ownership (included in Exhibit 1.1
filed herewith on page 2 and incorporated herein by reference).
2.2 Copy of Code of Ethics (incorporated by reference to
Amendment No. 1 to form S-6 [File No. 333-31176] filed on behalf
of FT 415).
3.1* Opinion of counsel as to legality of Securities being
registered.
S-5
3.2* Opinion of counsel as to Federal income tax status of
Securities being registered.
3.3* Opinion of counsel as to New York income tax status of
Securities being registered.
4.1* Consent of First Trust Advisors L.P.
6.1 List of Directors and Officers of Depositor and other
related information (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42683] filed on
behalf of The First Trust Special Situations Trust,
Series 18).
7.1 Power of Attorney executed by the Directors listed on
page S-3 of this Registration Statement (incorporated by
reference to Amendment No. 1 to Form S-6 [File No.
333-76518] filed on behalf of FT 597).
___________________________________
* To be filed by amendment.
S-6