<Page>
As filed with the Securities and Exchange Commission on July 25, 2003
1933 Act File No. 333-106475
1940 Act File No. 811-03763
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
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: CLAYMORE SECURITIES DEFINED PORTFOLIOS, SERIES 154
B. Name of Depositor: CLAYMORE SECURITIES, INC.
C. Complete address of Depositor's principal executive offices:
210 North Hale Street
Wheaton, Illinois 60187
D. Name and complete address of agents for service:
CLAYMORE SECURITIES, INC.
Attention: Nicholas Dalmaso, Esq.
Executive Vice President and General Counsel
210 North Hale Street
Wheaton, Illinois 60187
CHAPMAN AND CUTLER LLP
Attention: Eric F. Fess, Esq.
111 West Monroe Street
Chicago, Illinois 60603
It is proposed that this filing will become effective (check appropriate box)
/ / immediately upon filing pursuant to paragraph (b)
/ / on (date) pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)
/ / on (date) pursuant to paragraph (a) of rule 485 or 486
E. Title of securities being registered: Units of fractional undivided
beneficial interest.
F. Approximate date of proposed sale to the public: As soon as practicable
after the effective date of the Registration Statement.
/ / Check box if it is proposed that this filing will become effective on
/ / July 25, 2003 at 1:30 P.M. Eastern Time pursuant to Rule 487.
<Page>
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.
<Page>
PRELIMINARY PROSPECTUS
DATED JULY 25, 2003
SUBJECT TO COMPLETION
CLAYMORE SECURITIES DEFINED PORTFOLIOS, SERIES 154
CLOSED-END SENIOR LOAN AND INCOME PORTFOLIO, SERIES 1
[CLAYMORE LOGO]
PROSPECTUS PART A DATED JULY 25, 2003
A DIVERSIFIED PORTFOLIO SEEKING TO PROVIDE HIGH CURRENT INCOME AND
THE POTENTIAL FOR CAPITAL APPRECIATION BY INVESTING IN COMMON STOCKS
OF CLOSED-END INVESTMENT COMPANIES THAT ARE CONSIDERED TO BE FIXED
OR FLOATING RATE SENIOR LOAN FUNDS AND/OR INCOME FUNDS.
The Securities and Exchange Commission has not approved or disapproved of these
securities or passed upon the adequacy or accuracy of this prospectus.
Any representation to the contrary is a criminal offense.
<Page>
INVESTMENT SUMMARY
- --------------------------------------------------------------------------------
OVERVIEW
Claymore Securities Defined Portfolios, Series 154 is a unit investment trust
that consists of the Closed-End Senior Loan and Income Portfolio, Series 1 (the
"TRUST"). The trust seeks to provide high current income and the potential for
capital appreciation by investing in common stocks of closed-end investment
companies that are considered to be floating or fixed-rate senior loan funds
and/or income funds. Claymore Securities, Inc. ("CLAYMORE" or the "SPONSOR")
serves as the sponsor of the trust.
The trust is scheduled to terminate in approximately 5 years.
INVESTMENT OBJECTIVE
The trust seeks to provide high current income and the potential for capital
appreciation by investing in common stocks of closed-end investment companies
that are considered to be floating or fixed-rate senior loan funds and/or income
funds.
PRINCIPAL INVESTMENT STRATEGY
The trust will invest under normal circumstances, at least 80% of the value
of its assets in common stocks of closed-end investment companies ("CLOSED-END
FUNDS"), that are considered to be senior loan funds and/or income funds.
Claymore, through proprietary research and strategic alliances, will strive to
select Closed-End Funds featuring the potential for current income,
diversification and overall liquidity. Senior loans are made by banks, other
financial institutions, and other investors ("LENDERS"), to corporations,
partnerships, limited liability companies and other entities ("BORROWERS") to
finance leveraged buyouts, recapitalizations, mergers, acquisitions, stock
repurchases, debt refinancings and, to a lesser extent, for general operating
and other purposes ("Senior Loans"). Senior Loans generally are not subordinate
to other significant claims on a Borrower's assets. Closed-End income funds may
include various bonds and other income producing securities including high-yield
securities. High-yield securities are securities rated below investment grade
(Baa or BBB) as determined by Moody's Investor Services ("MOODY'S") and/or
Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("STANDARD &
POOR'S"). Senior loans are generally rated below investment grade.
SECURITY SELECTION
The sponsor has selected for the portfolio common stocks of Closed-End Funds
believed to have the best potential to achieve the trust's investment objective
(the "SECURITIES"). The Closed-End Funds' portfolios consist primarily of Senior
Loans and/or income producing securities including high-yield securities.
As of the trust's inception date (the "INCEPTION DATE"), 100% of the trust's
portfolio is invested in securities of Closed-End Funds with portfolios that
consist primarily of Senior Loans and/or income producing securities including
high-yield securities. Senior Loans generally are negotiated between a Borrower
and the Lenders represented by one or more Lenders acting as agent ("AGENT") of
all the Lenders. The Agent is responsible for negotiating the loan agreement
("LOAN AGREEMENT") that establishes the terms and conditions of the Senior Loan
and the rights of the Borrower and the Lenders. The Agent is paid a fee by the
Borrower for its services.
2 Investment Summary
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The majority of senior loans have either fixed or floating rates. It is
anticipated that the majority of the income generated by the Closed-End Funds
this trust invests in will be from fixed- and/or floating-rate senior loans. The
key difference between floating- and fixed-rate debt instruments is the manner
in which the interest rate is set. In the case of fixed rate loans, the rate of
interest to be paid is fixed at the time of issuance. In the case of a floating
rate loan, current market interest rates dictate the rate of interest paid on
the loan. Therefore, if interest rates go up, the interest payments on a
floating rate loan will be reset at a higher level (typically over a 3-6 month
period). Conversely, if interest rates fall, the interest payments on a floating
rate loan will be re-set at a lower level.
While senior loans can provide investors with high current income potential,
the majority of senior loans are considered below investment grade, and
therefore retain a higher credit risk relative to lower yielding, investment
grade securities. The provision of price stability and preservation of capital
is typical to senior loans as well; however, the senior loan market is still
considered relatively illiquid.
For floating rate Senior Loans, the interest rates are generally adjusted
based on a base rate plus a premium or spread over the base rate. The base rate
usually is:
- the London Inter-Bank Offered Rate ("LIBOR");
- the prime rate offered by one or more major United States banks (the
"PRIME RATE"); or
- the certificate of deposit ("CD") rate or other base lending rates used by
commercial lenders.
LIBOR, as provided for in Loan Agreements, usually is an average of the
interest rates quoted by several designated banks as the rates at which they pay
interest to major depositors in the London interbank market on U.S. dollar-
denominated deposits. The Prime Rate quoted by a major U.S. bank is generally
the interest rate at which that bank is willing to lend U.S. dollars to its most
creditworthy borrowers, although it may not be the bank's lowest available rate.
The CD rate, as provided for in Loan Agreements, usually is the average rate
paid on large certificates of deposit traded in the secondary market.
Interest rates on Senior Loans may adjust daily, monthly, quarterly,
semi-annually or annually. Senior Loans are generally rated below investment
grade and may be unrated at the time of investment.
High-yield or "junk" securities, the generic names for securities rated below
"BBB" by Standard & Poor's or "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. Securities that are rated below investment grade by either
Standard & Poor's or Moody's will be deemed to be below investment grade for
purposes of the trust even if the security has received an investment grade
rating by either party. Obligations rated below investment grade should be
considered speculative as these ratings indicate a quality of less than
investment grade. Because high-yield securities are generally 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.
Investment Summary 3
<Page>
See "Description of Ratings" in Part B of the prospectus for additional
information regarding the ratings criteria.
THE ADVANTAGES OF CLOSED-END FUNDS
Closed-End Funds offer investors access to professional management in an
exchange-traded investment vehicle that further provides intraday pricing
visibility. Additionally, their structure allows for the employment of leverage,
a common portfolio management tool that allows investors increased income
potential due to a fund's ability to issue its own preferred shares and invest
the proceeds at generally higher rates. However, certain risks are associated
with the leveraging of common stock. Both the net asset value and the market
value of shares of common stock may be subject to greater volatility and a
decline in value.
A professionally-selected portfolio of managed Closed-End Funds may provide
an extra degree of diversification for those investors seeking monthly-income
potential.
PRINCIPAL RISKS
You can lose money by investing in the trust. The trust also might not
perform as well as you expect. This can happen for reasons such as these:
- SHARE PRICES CAN BE VOLATILE. The value of your investment may fall over
time.
- THE VALUE OF THE SECURITIES IN THE CLOSED-END FUNDS WILL GENERALLY FALL IF
INTEREST RATES, IN GENERAL, RISE. Typically, securities with longer
periods before maturity are more sensitive to interest rate changes.
- AN ISSUER MAY BE UNWILLING OR UNABLE TO MAKE PRINCIPAL PAYMENTS AND/OR TO
DECLARE DIVIDENDS IN THE FUTURE, MAY CALL A SECURITY BEFORE ITS STATED
MATURITY, OR MAY REDUCE THE LEVEL OF DIVIDENDS DECLARED. This may result
in a reduction in the value of your units.
- THE FINANCIAL CONDITION OF AN ISSUER MAY WORSEN OR ITS CREDIT RATINGS MAY
DROP, RESULTING IN A REDUCTION IN THE VALUE OF YOUR UNITS. This may occur
at any point in time, including during the primary offering period.
- THE TRUST IS CONCENTRATED IN SECURITIES OF CLOSED-END FUNDS. Closed-End
Funds are actively managed investment companies that 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. Closed-End Funds are not redeemable
at the option of the shareholder and they may trade in the market at a
discount to their net asset value. Closed-End Funds may also employ the
use of leverage which increases risk and volatility.
- CERTAIN CLOSED-END FUNDS HELD BY THE TRUST INVEST IN SECURITIES THAT ARE
RATED BELOW INVESTMENT GRADE AND ARE CONSIDERED TO BE "JUNK" SECURITIES.
Below
4 Investment Summary
<Page>
investment grade obligations are considered to be speculative and are
subject to greater market and credit risks, and accordingly, the risk of
non-payment or default is higher than investment grade securities. In
addition, such securities may be more sensitive to interest rate changes
and more likely to receive early returns of principal.
- SOME OF THE CLOSED-END FUNDS HELD BY THE TRUST MAY INVEST IN SECURITIES
THAT ARE RATED AS INVESTMENT GRADE BY ONLY ONE RATING AGENCY. As a result,
such split-rated securities may have more speculative characteristics and
are more subject to a greater risk of default than securities rated as
investment grade by both Moody's and Standard & Poor's.
- CLOSED-END FUNDS HELD BY THE TRUST INVEST IN SENIOR LOANS. Borrowers under
Senior Loans may default on their obligations to pay principal or interest
when due. This non-payment would result in a reduction of income to the
applicable Closed-End Fund, a reduction in the value of the Senior Loan
experiencing non-payment and a decrease in the net asset value of the
Closed-End Fund. Although Senior Loans in which the Closed-End Funds
invest 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 of scheduled principal or interest or that such
collateral could be readily liquidated.
Senior Loans in which the Closed-End Funds invest:
-- generally are of below investment grade credit quality;
-- may be unrated at the time of investment;
-- generally are not registered with the Securities and Exchange
Commission ("SEC") or any state securities commission; and
-- generally are not listed on any securities exchange.
In addition, the amount of public information available on Senior Loans
generally is less extensive than that available for other types of assets.
- THE TRUST IS CONSIDERED TO BE A "TRUST OF FUNDS." As such, it is subject
to certain termination restrictions that may result in a reduction in the
value of your units.
- Inflation may decrease the value of money, which may lead to a decrease in
the value of assets or income from investments.
- - WE DO NOT ACTIVELY MANAGE THE PORTFOLIO. The trust will generally hold, and
may continue to buy, the same securities even though the security's outlook
or rating or its market value or yield may have changed.
Investment Summary 5
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WHO SHOULD INVEST
You should consider this investment if:
- You are seeking to own Senior Loan closed-end fund common stocks in one
convenient package;
- You want current income and diversification;
- The trust represents only a portion of your overall investment portfolio;
and
- The trust is part of a longer term investment strategy.
You should not consider this investment if:
- You are unwilling to take the risks involved with owning Senior Loan
closed-end fund common stocks;
- You are seeking a short-term investment or an investment to be used as a
trading vehicle; or
- You are unwilling to take the increased risks involved with owning
non-investment grade or "junk" securities.
6 Investment Summary
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- --------------------------------------------------------------------------------
ESSENTIAL INFORMATION
(AS OF THE INCEPTION DATE)
UNIT PRICE AT INCEPTION (PUBLIC OFFERING PRICE) $10.00
INCEPTION DATE (INITIAL DATE OF DEPOSIT) July 25, 2003
TERMINATION DATE July 25, 2008
DISTRIBUTION DATES 25th day of each month,
commencing August 2003
RECORD DATES 15th day of each month,
commencing August 2003
CUSIP NUMBERS
CASH DISTRIBUTIONS (ALL ACCOUNTS) 18384P516
REINVESTED DISTRIBUTIONS
Standard Accounts 18384P524
Wrap Fee Accounts 18384P532
TICKER CESLAX
MINIMUM INVESTMENT
Standard accounts $1,000/100 units
Retirement accounts and
custodial accounts for minors $250/25 units
- --------------------------------------------------------------------------------
FEES AND EXPENSES
The amounts below are estimates of the direct and indirect expenses that you
may incur based on a $10 unit price. Actual expenses may vary.
<Table>
<Caption>
PERCENTAGE AMOUNT
OF PUBLIC PER $1,000
INVESTOR FEES OFFERING PRICE INVESTED(4)
------------- -------------- -----------
INITIAL SALES FEE PAID ON PURCHASE(1) 1.00% $10.00
DEFERRED SALES FEE(2) 3.45 34.50
CREATION AND DEVELOPMENT FEE(3) 0.50 5.00
--------- ------
MAXIMUM SALES FEES
(including creation and development fee) 4.95% $49.50
========= ======
</Table>
<Table>
<Caption>
INVESTOR FEES
-------------
ESTIMATED ORGANIZATION COSTS
(amount per 100 units paid by trust at
end of initial offering period or after
six months, at the discretion of the
sponsor) $ 8.00
=============
</Table>
<Table>
<Caption>
ANNUAL FUND APPROXIMATE
OPERATING EXPENSES % OF PUBLIC AMOUNT PER
OF THE TRUST OFFERING PRICE(4) 100 UNITS
- ------------ ----------------- ---------
Trustee's fee 0.0950% $ 0.950
Sponsor's supervisory fee 0.0300 0.300
Evaluator's fee 0.0350 0.350
Bookkeeping and administrative fee 0.0250 0.250
Estimated other trust operating
expenses(5) 0.0162 0.162
Estimated Closed-End Fund expenses(6) 1.5100 15.100
Total 1.7112% $17.112
============ =======
</Table>
(1) The initial sales fee provided above is based on the unit price on the
Inception Date. Because the initial sales fee equals the difference between
the maximum sales fee and the sum of the remaining deferred sales fee and
the creation and development fee ("C&D FEE") (as described below), the
percentage and dollar amount of the initial sales fee will vary as the unit
price varies and after deferred charges begin. Despite the variability of
the initial sales fee, each investor is obligated to pay the entire
applicable maximum sales fee.
(2) The deferred sales fee is fixed at $0.345 per unit and is deducted in
monthly installments of $0.115 per unit on the last business day of each
month from January, 2004 through March, 2004. The percentage provided is
based on a $10 unit as of the Inception Date and the percentage amount will
vary over time.
Investment Summary 7
<Page>
(3) The C&D Fee compensates the sponsor for creating and developing your trust.
The actual C&D Fee is $0.05 per unit and is paid to the sponsor at the
close of the initial offering period, which is expected to be six months to
one year from the Inception Date. The percentages provided are based on a
$10 unit as of the Inception Date and the percentage amount will vary over
time. If the unit price exceeds $10.00 per unit, the C&D Fee will be less
than 0.50% of the Public Offering Price; if the unit price is less than
$10.00 per unit, the C&D Fee will exceed 0.50% of the Public Offering
Price.
(4) Based on 100 units with a $10.00 per unit Public Offering Price as of the
Inception Date.
(5) Other operating expenses do not include brokerage cost and other
transactional fees.
(6) Although not an actual trust operating expense, the trust, and therefore
the unitholders, will indirectly bear similar operating expenses of the
Closed-End Funds held by the trust in the estimated amount provided above.
Estimated Closed-End Fund expenses are based upon the net asset value of
the number of Closed-End Fund shares held by the trust per Unit multiplied
by the Annual Operating Expenses of the Closed-End Funds for the most
recent fiscal year.
EXAMPLE
This example helps you compare the costs of this trust with other unit trusts
and mutual funds. In the example we assume that the expenses do not change and
the trust's annual return is 5%. Your actual returns and expenses will vary.
Based on these assumptions, you would pay these expenses for every $10,000 you
invest:
<Table>
1 year $ 741
3 years $1,078
5 years (life of trust) $1,415
</Table>
These amounts are the same regardless of whether you sell your investment at
the end of a period or continue to hold your investment. The example does not
consider any brokerage fees the trust pays or any transaction fees that
broker-dealers may charge for processing redemption requests.
ESTIMATED ANNUAL INCOME DISTRIBUTIONS
The portfolio's estimated annual income distributions are $0.592 per unit for
the first year. The amount of distributions may increase or decrease as
securities in the portfolio mature, are called or are sold, as the dividends
received change or as fees and expenses increase or decrease. Estimated
distributions assume that all of the securities and expected dividends are
delivered to the portfolio. These figures are estimates as of the business day
prior to the Inception Date; actual payments may vary.
See "Expenses of the Trust" in Part B of the prospectus for additional
information.
8 Investment Summary
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UNDERSTANDING YOUR INVESTMENT
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HOW TO BUY UNITS
You can buy units of the trust on any business day by contacting your
financial professional. Public Offering Prices of units are available daily on
the Internet at www.claymoresecurities.com. The Public Offering Price includes:
- the value of the securities,
- the initial sales fee, and
- cash and other net assets in the portfolio.
We often refer to the purchase price of units as the "OFFER PRICE" or the
"PUBLIC OFFERING PRICE." We must receive your order to buy units prior to the
close of the New York Stock Exchange (normally 4:00 p.m. Eastern time) to give
you the price for that day. If we receive your order after this time, you will
receive the price computed on the next business day.
VALUE OF THE SECURITIES. The sponsor serves as the evaluator of the trust
(the "EVALUATOR"). We determine the value of the securities as of the close of
the New York Stock Exchange on each day that the exchange is open (the
"EVALUATION TIME").
PRICING THE SECURITIES. We generally determine the value of securities using
the last sale price for securities traded on a national securities exchange or
the Nasdaq National Market System. In some cases we will price a security based
on the last asked or bid price in the over-the-counter market or by using other
recognized pricing methods. We will only do this if a security is not
principally traded on a national securities exchange or the Nasdaq National
Market System, or if the market quotes are unavailable or inappropriate.
The sponsor determined the initial prices of the securities shown in "Trust
Portfolio" in this prospectus. The sponsor determined these initial prices as
described above at the close of the New York Stock Exchange on the business day
before the date of this prospectus. On the first day we sell units we will
compute the unit price as of the close of the New York Stock Exchange or the
time the registration statement filed with the Securities and Exchange
Commission becomes effective, if later.
ORGANIZATION COSTS. During the initial offering period, part of your purchase
price includes a per unit amount sufficient to reimburse us for some or all of
the costs of creating your trust. These costs include the costs of preparing the
registration statement and legal documents, legal fees, federal and state
registration fees and the initial fees and expenses of the trustee. Your trust
will sell securities to reimburse us for these costs at the end of the initial
offering period or after six months, at the discretion of the sponsor.
TRANSACTIONAL SALES FEE. You pay a fee when you buy units. We refer to this
fee as the "TRANSACTIONAL SALES FEE." The transactional sales fee has both an
initial and a deferred component and is 4.45% of the Public Offering Price based
on a $10 unit. This percentage amount of the transactional sales fee is based on
the unit price on the Inception Date. Because the transactional sales fee equals
the difference between the maximum sales fee and the C&D Fee, the percentage and
dollar amount of the transactional sales fee will vary as the unit price varies.
The transactional sales fee does not include the C&D Fee which is described
under "Expenses of the
Understanding Your Investment 9
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Trust" in Part B of the prospectus and in "Fees and Expenses" in Part A of the
prospectus.
INITIAL SALES FEE. Based on a $10 unit, the initial sales fee is initially 1%
of the Public Offering Price. The initial sales fee, which you will pay at the
time of purchase, is equal to the difference between the maximum sales charge
(4.95% of the Public Offering Price) and the sum of the maximum remaining
deferred sales fees and the C&D Fee (initially $0.395 per unit). The dollar
amount and percentage amount of the initial sales fee will vary over time.
DEFERRED SALES FEE. To keep your money working longer, we defer payment of
the rest of the transactional sales fee through the deferred sales fee ($0.345
per unit).
REDUCING YOUR SALES FEE. We offer a variety of ways for you to reduce the
maximum sales fee you pay. It is your financial professional's responsibility to
alert us of any discount when you order units. Since the deferred sales fee and
the C&D Fee are a fixed dollar amount per unit, your trust must charge the
deferred sales fee and the C&D Fee per unit regardless of any discounts.
However, if you are eligible to receive a discount such that your total maximum
sales fee is less than the fixed dollar amount of the deferred sales fee and the
C&D Fee, the sponsor will credit you the difference between your maximum sales
fee and the sum of the deferred sales fee and the C&D Fee at the time you buy
units by providing you with additional units.
LARGE PURCHASES. You can reduce your maximum sales fee by increasing the size
of your investment.
INVESTORS WHO MAKE LARGE PURCHASES ARE ENTITLED TO THE FOLLOWING SALES CHARGE
REDUCTIONS:
<Table>
<Caption>
Sales Charge
Reductions
(as a % of the
Purchase Amount(1) Public
Offering Price)
---------------
Less than $50,000 0.00%
$50,000 - $99,999 0.25
$100,000 - $249,999 0.50
$250,000 - $499,999 1.00
$500,000 - $999,999 2.00
$1,000,000 or more 2.90
</Table>
(1) Sales charge reductions are computed both on a dollar basis and on the
basis of the number of units purchased, at any point of purchase, using the
equivalent of 5,000 units to $50,000, 10,000 units to $100,000 etc., and
will be applied on that basis which is more favorable to you.
You may AGGREGATE unit purchases by the same person on any single day from
any one broker-dealer to qualify for a purchase level.
You can include these purchases as your own for purposes of this aggregation:
- purchases by your spouse or minor children and
- purchases by your trust estate or fiduciary accounts.
You may also use a LETTER OF INTENT to combine purchases over time to qualify
for a purchase level. Under this option, you must give us a letter of intent to
purchase a specified amount of units of any Claymore unit trust over a specified
time period. The letter must specify a time period of no more than 13 months.
Once you sign a letter of intent, we will reduce your fee based on your total
purchase commitment as
10 Understanding Your Investment
<Page>
shown in the table above. If your purchases exceed the level specified in your
letter, you will still receive the additional fee reduction for your purchases
shown in the table above (we will not cap your discount). If your total
purchases are less than the level specified in your letter, you must pay the fee
difference to us. We reserve the right to redeem your units if you do not pay
the difference.
The discounts described above apply only during the initial offering period.
ADVISORY AND FEE ACCOUNTS. We eliminate your transactional sales fee for
purchases made through registered investment advisers, certified financial
planners or registered broker-dealers who charge periodic fees in lieu of
commissions or who charge for financial planning or for investment advisory or
asset management services or provide these services as part of an investment
account where a comprehensive "wrap fee" is imposed (a "FEE ACCOUNT").
This discount applies during the initial offering period and in the secondary
market. Your financial professional may purchase units with the Fee Account
CUSIP number to facilitate purchases under this discount, however, we do not
require that you buy units with this CUSIP number to qualify for the discount.
If you purchase units with this special CUSIP number, you should be aware that
all distributions will automatically reinvest into additional units of your
trust. We reserve the right to limit or deny purchases of units not subject to
the transactional sales charge by investors whose frequent trading activity we
determine to be detrimental to the trust. We, as sponsor, will receive and you
will pay the C&D Fee. See "Expenses of the Trust" in Part B of the prospectus.
EXCHANGE OR ROLLOVER OPTION. If you are buying units of the trust in the
primary market with redemption or termination proceeds from any other Claymore
unit trust, you may purchase units at 99% of the maximum Public Offering Price.
You may also buy units with this reduced sales fee if you are purchasing units
in the primary market with (1) the termination proceeds from a non-Claymore unit
trust with a similar investment strategy or (2) the redemption proceeds from a
non-Claymore trust if such trust has a similar investment strategy and the
corresponding Claymore trust provides a periodic update of that investment
strategy. Such purchases entitled to this sales charge reduction may be
classified as "ROLLOVER PURCHASES."
Rollover Purchases are also subject to the C&D Fee. See "Expenses of the
Trust" in Part B of the prospectus.
EMPLOYEES. We do not charge the portion of the transactional sales fee that
we would normally pay to your financial professional for purchases made by
officers, directors and employees and their family members (spouses, children
and parents) of Claymore and its affiliates, or by registered representatives of
selling firms and their family members (spouses, children and parents). You pay
only the portion of the fee that the sponsor retains. Such purchases are also
subject to the C&D Fee. This discount applies during the initial offering period
and in the secondary market.
DIVIDEND REINVESTMENT PLAN. We do not charge any transactional sales fee when
you reinvest distributions from your trust into additional units of the trust.
Since the deferred sales fee is a fixed dollar amount per unit, your trust must
charge the deferred sales fee per unit regardless of this discount. If you elect
the distribution reinvestment plan, we will credit you
Understanding Your Investment 11
<Page>
with additional units with a dollar value sufficient to cover the amount of any
remaining deferred sales fee that will be collected on such units at the time of
reinvestment. The dollar value of these units will fluctuate over time. This
discount applies during the initial offering period and in the secondary market.
See "Purchase, Redemption and Pricing of Units" in Part B of the prospectus
for more information regarding buying units.
HOW WE DISTRIBUTE UNITS. We sell units to the public through broker-dealers
and other firms. We pay part of the sales fee you pay to these distribution
firms when they sell units. The distribution fee paid for a given transaction is
as follows:
<Table>
<Caption>
Purchase Amount/ Concession per Unit:
Form of Purchase: (as a % of Public
Offering Price):
----------------
Less than $50,000 3.60%
$50,000 - $99,999 3.35
$100,000 - $249,999 3.10
$250,000 - $499,999 2.60
$500,000 - $999,999 1.60
$1,000,000 or more 1.00
Rollover Purchases 2.60
Wrap Account and Employee Purchases 0.00
</Table>
We apply these amounts as a percent of the unit price per transaction at the
time of the transaction. We also apply the different distribution levels on a
unit basis using a $10 unit equivalent. For example, if a firm executes a
transaction between 10,000 and 24,999 units, it earns 3.10% of the unit price.
We generally register units for sale in various states in the U.S. We do not
register units for sale in any foreign country. It is your financial
professional's responsibility to make sure that units are registered or exempt
from registration if you are a foreign investor or if you want to buy units in
another country. This prospectus does not constitute an offer of units in any
state or country where units cannot be offered or sold lawfully. We may reject
any order for units in whole or in part.
We may gain or lose money when we hold units in the primary or secondary
market due to fluctuations in unit prices. The gain or loss is equal to the
difference between the price we pay for units and the price at which we sell or
redeem them. We may also gain or lose money when we deposit securities to create
units. For example, we lost $536 on the initial deposit of securities into the
trust.
See "Purchase, Redemption and Pricing of Units" in Part B of the prospectus
for additional information.
HOW TO SELL YOUR UNITS
You can sell your units on any business day by contacting your financial
professional or, in some cases, the trustee. Unit prices are available daily on
the Internet at www.claymoresecurities.com or through your financial
professional. We often refer to the sale price of units as the "BID PRICE." You
pay any remaining deferred sales fee when you sell or redeem your units. Certain
broker-dealers may charge a transaction fee for processing unit redemptions or
sale requests.
Until the end of the initial offering period or six months after the
Inception Date, at the discretion of the sponsor, the price at which the trustee
will redeem units and the price at which the sponsor may repurchase units
include estimated organization costs. After such period, the
12 Understanding Your Investment
<Page>
amount paid will not include such estimated organization costs.
SELLING UNITS. We intend to, but are not obligated to, maintain a secondary
market for units. This means that if you want to sell your units, we may buy
them at the current price which is based on their net asset value. We may then
resell the units to other investors at the Public Offering Price or redeem them
for the redemption price. Our secondary market repurchase price is generally the
same as the redemption price. Certain broker-dealers might also maintain a
secondary market in units. You should contact your financial professional for
current unit prices to determine the best price available. We may discontinue
our secondary market at any time without notice. Even if we do not make a
market, you will be able to redeem your units with the trustee on any business
day for the current price.
REDEEMING UNITS. You may also be able to redeem your units directly with the
trustee, The Bank of New York, on any day the New York Stock Exchange is open.
The trustee must receive your completed redemption request prior to the close of
the New York Stock Exchange for you to receive the unit price for a particular
day. (For what constitutes a completed redemption request, see "Purchase,
Redemption and Pricing of Units - Redemption" in the Part B of the prospectus.)
If your request is received after that time or is incomplete in any way, you
will receive the next price computed after the trustee receives your completed
request. Rather than contacting the trustee directly, your financial
professional may also be able to redeem your units by using the Investors'
Voluntary Redemptions and Sales (IVORS) automated redemption service offered
through Depository Trust Company.
If you redeem your units, the trustee will generally send you a payment for
your units no later than three business days after it receives all necessary
documentation.
You can generally request an in-kind distribution of the securities
underlying your units if you own units worth at least $25,000 or you originally
paid at least that amount for your units. This option is generally available
only for securities traded and held in the United States. You may not request
this option in the last 30 days of your trust's life. We may modify or
discontinue this option at any time without notice. If you request an in-kind
distribution of the securities underlying your units, you will incur any
distribution or service fees (Rule 12b-1 fees) applicable to those securities.
EXCHANGE OPTION. You may be able to exchange your units for units of other
Claymore unit trusts at a reduced sales fee. You can contact your financial
professional or Claymore for more information about trusts currently available
for exchanges. Before you exchange units, you should read the prospectus
carefully and understand the risks and fees. You should then discuss this option
with your financial professional to determine whether your investment goals have
changed, whether current trusts suit you and to discuss tax consequences. To
qualify for a reduced sales fee, you must purchase units in a subsequent trust
on the same day that you redeem units of your current trust. We may discontinue
this option at any time.
For more complete information regarding selling or redeeming your units, see
"Purchase, Redemption and Pricing of Units" in Part B of the prospectus.
Understanding Your Investment 13
<Page>
DISTRIBUTIONS
MONTHLY DIVIDENDS. Your trust generally pays dividends from its net
investment income along with any excess capital on each monthly distribution
date to unitholders of record on the preceding record date. You can elect to:
- reinvest distributions in additional units of your trust at no fee, or
- receive distributions in cash.
You may change your election by contacting your financial professional or the
trustee. Once you elect to participate in a reinvestment program, the trustee
will automatically reinvest your distributions into additional units at their
net asset value on the distribution date. We waive the sales fee for
reinvestments into units of your trust. We cannot guarantee that units will
always be available for reinvestment. If units are unavailable, you will receive
cash distributions. We may discontinue these options at any time without notice.
In some cases, your trust might pay a special distribution if it holds an
excessive amount of principal pending distribution. For example, this could
happen as a result of a merger or similar transaction involving a company whose
stock is in your portfolio. The amount of your distributions will vary from time
to time as companies change their dividends or trust expenses change.
REINVEST IN YOUR TRUST. You can keep your money working by electing to
reinvest your distributions in additional units of your trust. The easiest way
to do this is to have your financial professional purchase units with one of the
Reinvestment CUSIP numbers listed in the "Investment Summary" section of this
prospectus. You may also make or change your election by contacting your
financial professional or the trustee.
REPORTS. The trustee will send your financial professional a statement
showing income and other receipts of your trust for each distribution. Each year
the trustee will also provide an annual report on your trust's activity and
certain tax information. You can request copies of stock evaluations to enable
you to complete your tax forms and audited financial statements for your trust,
if available.
See "Administration of the Trust" in Part B of the prospectus for additional
information.
INVESTMENT RISKS
ALL INVESTMENTS INVOLVE RISK. This section describes the main risks that can
impact the value of the securities in your portfolio. You should understand
these risks before you invest. If the value of the securities falls, the value
of your units will also fall. We cannot guarantee that your trust will achieve
its objective or that your investment return will be positive over any period.
MARKET RISK. Market risk is the risk that a particular security in the trust,
the trust itself or securities in general may fall in value. Market value may be
affected by a variety of factors including:
- General securities markets movements;
- Changes in the financial condition of an issuer or an industry;
- Changes in perceptions about an issuer or an industry;
14 Understanding Your Investment
<Page>
- Interest rates and inflation;
- Governmental policies and litigation; and
- Purchases and sales of securities by the trust.
High yield or "junk" securities that are rated below investment grade are
generally more susceptible to this risk than investment grade securities.
INTEREST RATE RISK. Interest rate risk is the risk that the value of
securities held by a Closed-End Fund in the trust will decline in value because
of a rise in interest rates. Generally, securities that pay fixed rates of
return will increase in value when interest rates decline and decrease in value
when interest rates rise. Typically, securities that pay fixed rates of return
with longer periods before maturity are more sensitive to interest rate changes.
High yield or "junk" securities that are rated below investment grade are
generally more susceptible to this risk than investment grade securities.
CREDIT AND DIVIDEND PAYMENT RISK. Credit risk is the risk that an issuer of a
security held by a Closed-End Fund in the trust is unable or unwilling to make
dividend and/or principal payments. High yield or "junk" securities that are
rated below investment grade are generally more susceptible to this risk than
investment grade securities.
CALL RISK. Call risk is the risk that securities held by a Closed-End Fund in
the trust can be prepaid or "called" by the issuer before their stated maturity.
If securities are called, your income will decline and you may not be able to
reinvest the money you receive at as high a yield. Also, an early call at par of
a security trading at a premium will reduce your return. Securities held by a
Closed-End Fund in the trust are more likely to be called when interest rates
decline. This would result in early returns of principal to the Closed-End Funds
in the trust. The securities may also be subject to special or extraordinary
call provisions and "mandatory put" features that may cause the securities to be
removed from a fund prior to maturity or stated call dates. High yield or "junk"
securities that are rated below investment grade are generally more susceptible
to this risk than investment grade securities.
SECURITY QUALITY RISK. Security quality risk is the risk that a reduction in
a securities rating may decrease its value the value of a Closed-End Fund and
the value of your investment in the trust. Securities ratings may be reduced at
any time, including during the primary offering period of the trust. High yield
or "junk" securities that are rated below investment grade are generally more
susceptible to this risk than investment grade securities.
SPLIT RATINGS RISK. Split-rated securities are those securities that, at the
time of investment, are rated below investment grade by Moody's or Standard &
Poor's, so long as at least one rating agency rates such securities within the
four highest grades (i.e., investment grade quality). This means that a
split-rated security may be regarded by one rating agency as having
predominately speculative characteristics with respect to the issuer's capacity
to pay interest and repay principal, and accordingly subject to a greater risk
of default. The prices of split-rated securities, in the view of one but not all
rating agencies, may be more sensitive than securities without a split-rating to
negative developments, such as a decline in the issuer's revenues or a general
economic downturn.
Understanding Your Investment 15
<Page>
CLOSED-END FUND RISK. 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.
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. 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. In addition, Closed-End Funds are subject
to their own annual fees and expenses, including a management fee. Such fees
reduce the potential benefits associated with owning a Closed-End Fund and are
in addition to the trust's expenses.
HIGH-YIELD SECURITY RISK. Certain Closed-End Funds held by the trust invest
in high-yield 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 increase 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 affect an issuer's ability to make dividend payments.
High yield or "junk" securities, the general names for securities rated below
"BBB" by Standard & Poor's or "Baa" by Moody's, are frequently issued by
corporations in the growth state of their development or by established
companies who are highly leveraged or whose operations or industries are
depressed. Obligations rated below investment grade 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. Also, the market for
high-yield securities is generally smaller and less liquid than that for
investment grade securities.
The market for high-yield securities is smaller and less liquid than that for
investment grade bonds. 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 bonds is generally greater than it is for investment grade securities
and the purchase or sale of such securities may take longer to complete.
16 Understanding Your Investment
<Page>
SENIOR LOAN RISK. The Closed-End Funds held by the trust invest in Senior
Loans. Senior Loans in which the Closed-End Funds invest:
- generally are of below investment grade credit quality;
- may be unrated at the time of investment;
- generally are not registered with the SEC or any state securities
commission; and
- generally are not listed on any securities exchange.
The amount of public information available on Senior Loans generally will be
less extensive than that available for other types of assets.
No reliable, active trading market currently exists for many Senior Loans,
although a secondary market for certain Senior Loans has developed over the past
several years. Senior Loans are thus relatively illiquid. Liquidity relates to
the ability of a Closed-End Fund to sell an investment in a timely manner at a
price approximately equal to its value on the Closed-End Fund's books. The
illiquidity of Senior Loans may impair a Closed-End Fund's ability to realized
the full value of its assets in the event of a voluntary or involuntary
liquidation of such assets. Because of the lack of an active trading market,
illiquid securities are also difficult to value and prices provided by external
pricing services may not reflect the true value of the securities. However, many
Senior Loans are of a large principal amount and are held by a large number of
financial institutions. To the extent that a secondary market does exist for
certain Senior Loans, the market may be subject to irregular trading activity,
wide bid/ask spreads and extended trade settlement periods. The market for
Senior Loans could be disrupted in the event of an economic downturn or a
substantial increase or decrease in interest rates. This could result in
increased volatility in the market and in the trust's net asset value.
If legislation or state or federal regulators impose additional requirements
or restrictions on the ability of financial institutions to make loans that are
considered highly leveraged transactions, the availability of Senior Loans for
investment by the Closed-End Funds may be adversely affected. In addition, such
requirements or restrictions could reduce or eliminate sources of financing for
certain Borrowers. This would increase the risk of default. If legislation or
federal or state regulators require financial institutions to dispose of Senior
Loans that are considered highly leveraged transactions or subject such Senior
Loans to increased regulatory scrutiny, financial institutions may determine to
sell such Senior Loans. Such sales could result in depressed prices. If a
Closed-End Fund attempts to sell a Senior Loan at a time when a financial
institution is engaging in such a sale, the price a Closed-End Fund could get
for the Senior Loan may be adversely affected.
Some Senior Loans are subject to the risk that a court, pursuant to
fraudulent conveyance or other similar laws, could subordinate the Senior Loans
to presently existing or future indebtedness of the Borrower or take other
action detrimental to Lenders. Such court action could under certain
circumstances include invalidation of Senior Loans. Any Lender, which could
include a Closed-End Fund, is subject to the risk that a court could find the
Lender liable for damages in a claim by a Borrower arising under the common laws
of tort or contracts or anti-fraud provisions of certain securities laws for
actions taken or omitted to be taken by the
Understanding Your Investment 17
<Page>
Lenders under the relevant terms of a Loan Agreement or in connection with
actions with respect to the collateral underlying the Senior Loan.
TRUST OF FUNDS RISK. In order to hold securities of Closed-End Funds, the
trust has agreed to the following condition. This condition may negatively
affect the value of the units.
- The trust has agreed that it will not terminate within 30 days of the
termination of any other Claymore trust that holds shares of one or more
common Closed-End Funds.
INFLATION RISK. Inflation risk is the risk that the value of assets or income
from investments will be less in the future as inflation decreases the value of
money.
CONCENTRATION RISK. When securities of a particular type or in a particular
industry make up 25% or more of a trust, it is said to be "concentrated" in that
type of security or in that industry which makes the trust subject to more
market risk. The trust is concentrated in the securities of Closed-End Funds.
See "Closed-End Fund risk" for a description of the risks associated with a
concentration in the securities of Closed-End Funds.
See "Risk Factors" in Part B of the prospectus for additional information.
HOW THE TRUST WORKS
YOUR TRUST. Your trust is a unit investment trust registered under the
Investment Company Act of 1940 and the Securities Act of 1933. We created the
trust under a trust agreement between Claymore Securities, Inc. (as sponsor,
evaluator and supervisor) and The Bank of New York (as trustee). To create your
trust, we deposited contracts to purchase securities with the trustee along with
an irrevocable letter of credit or other consideration to pay for the
securities. In exchange, the trustee delivered units of your trust to us. Each
unit represents an undivided interest in the assets of your trust. These units
remain outstanding until redeemed or until your trust terminates.
CHANGING YOUR PORTFOLIO. Your trust is not a managed fund. Unlike a managed
fund, we designed your portfolio to remain relatively fixed after its inception.
Your trust will generally buy and sell securities:
- to pay expenses,
- to issue additional units or redeem units,
- in limited circumstances to protect the trust,
- to make required distributions or avoid imposition of taxes on the trust,
or
- as permitted by the trust agreement.
Your trust will generally reject any offer for securities or property other
than cash in exchange for the securities in its portfolio. However, if a public
tender offer has been made for a security or a merger or acquisition has been
announced affecting a security, your trust may either sell the security or
accept a tender offer for cash if the supervisor determines that the sale or
tender is in the best interest of unitholders. The trustee will distribute any
cash proceeds to unitholders. If the trust receives securities or property other
than cash, it may either hold the securities or property in its portfolio or
sell the securities or property and
18 Understanding Your Investment
<Page>
distribute the proceeds. For example, this could happen in a merger or similar
transaction.
Only the trustee may vote the shares of the Closed-End Funds held in the
trust. The trustee will vote the shares in the same general proportion as the
shares held by other shareholders of each Closed-End Fund.
We will increase the size of your trust as we sell units. When we create
additional units, we will seek to replicate the existing portfolio. When your
trust buys securities, it will pay brokerage or other acquisition fees. You
could experience a dilution of your investment because of these fees and
fluctuations in stock prices between the time we create units and the time your
trust buys the securities. When your trust buys or sells securities, we may
direct that it place orders with and pay brokerage commissions to brokers that
sell units or are affiliated with your trust. We may consider whether a firm
sells units of our trusts when we select firms to handle these transactions.
TERMINATION OF YOUR TRUST. Your trust will terminate no later than the
termination date listed in the "Investment Summary" section of this prospectus.
The trustee may terminate your trust early if the value of the trust is less
than 20% of the value of the securities in the trust at the end of the initial
offering period. At this size, the expenses of your trust may create an undue
burden on your investment. Investors owning two-thirds of the units in your
trust may also vote to terminate the trust early. We may also terminate your
trust in other limited circumstances.
The trustee will notify you of any termination and will sell any remaining
securities. The trustee will send your final distribution to you within a
reasonable time following liquidation of all the securities after deducting
final expenses. Your termination distribution may be less than the price you
originally paid for your units. You may be able to request an in-kind
distribution of the securities underlying your units at termination. Please
refer to the section entitled "How to Sell Your Units - Redeeming Units" for
information on in-kind distributions.
See "Administration of the Trust" in Part B of the prospectus for additional
information.
GENERAL INFORMATION
CLAYMORE. Claymore Securities, Inc. specializes in the creation, development
and distribution of investment solutions for advisors and their valued clients.
In November 2001, we changed our name from Ranson & Associates, Inc. to Claymore
Securities, Inc. During our history we have been active in public and corporate
finance and have distributed bonds, mutual funds and unit trusts in the primary
and secondary markets. We are a registered broker-dealer and member of the
National Association of Securities Dealers, Inc. If we fail to or cannot perform
our duties as sponsor or become bankrupt, the trustee may replace us, continue
to operate your trust without a sponsor, or terminate your trust. You can
contact us at our headquarters at 210 North Hale Street, Wheaton, Illinois 60187
or by using the contacts listed on the back cover of this prospectus. Claymore
personnel may from time to time maintain a position in certain securities held
by the trust.
Claymore and your trust have adopted a code of ethics requiring Claymore'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 your trust.
Understanding Your Investment 19
<Page>
See "Administration of the Trust" in Part B of the prospectus for additional
information.
THE TRUSTEE. The Bank of New York is the trustee of your trust. It is a trust
company organized under New York law. You can contact the trustee by calling the
telephone number on the back cover of this prospectus or write to Unit
Investment Trust Division, 101 Barclay Street, 20th Fl., New York, New York
10286. We may remove and replace the trustee in some cases without your consent.
The trustee may also resign by notifying Claymore and investors.
See "Administration of the Trust" in Part B of the prospectus for additional
information.
EXPENSES
Your trust will pay various expenses to conduct its operations. The
"Investment Summary" section of this prospectus shows the estimated amount of
these expenses.
Your trust will pay a fee to the trustee for its services. The trustee also
benefits when it holds cash for your trust in non-interest bearing accounts.
Your trust will reimburse us as supervisor and evaluator for providing portfolio
supervisory services and for evaluating your portfolio. Our reimbursements may
exceed the costs of the services we provide to your trust but will not exceed
the costs of services provided to all Claymore unit investment trusts in any
calendar year. All of these fees may adjust for inflation without your approval.
Your trust will pay a fee to the sponsor for creating and developing the
trust, including determining the trust objective, policies, composition and
size, selecting service providers and information services, and for providing
other similar administrative and ministerial functions. Your trust pays this
"creation and development fee" of $0.05 per unit from the assets of the trust as
of the close of the initial public offering period. The sponsor does not use the
fee to pay distribution expenses or as compensation for sales efforts.
Your trust will also pay its general operating expenses. Your trust may pay
expenses such as trustee expenses (including legal and auditing expenses),
various governmental charges, fees for extraordinary trustee services, costs of
taking action to protect your trust, costs of indemnifying the trustee and
Claymore, legal fees and expenses, expenses incurred in contacting you and costs
incurred to reimburse the trustee for advancing funds to meet distributions.
Your trust may pay the costs of updating its registration statement each year.
The trustee may sell securities to pay any trust expenses.
The trust, and therefore the unitholders, will also indirectly bear the
expenses of the underlying Closed-End Funds. While the trust will not pay these
expenses directly out of its assets, these expenses are shown under "Annual Fund
Operating Expenses of the Trust" in "Fees and Expenses" to illustrate the impact
of these expenses.
See "Expenses of the Trust" in Part B of the prospectus for additional
information.
20 Understanding Your Investment
<Page>
TRUST PORTFOLIO
CLAYMORE SECURITIES DEFINED PORTFOLIOS, SERIES 154
THE TRUST PORTFOLIO AS OF THE INCEPTION DATE, JULY 25, 2003
- --------------------------------------------------------------------------------
<Table>
<Caption>
Percentage Per
Number of of Share Cost to
Shares Ticker Company Name(1) Portfolio Price Portfolio(2)(3)
- ---------------------------------------------------------------------------------
659 TLI Citigroup Investments
Corporate Loan Fund
Incorporated 6.00% $13.69 $ 9,022
782 EVV Eaton Vance Limited
Duration Income Fund 10.00 19.10 14,936
2,365 EVF Eaton Vance Senior Income
Trust 14.00 8.95 21,167
4,966 PPR ING Prime Rate Trust 24.50 7.50 37,245
1,908 NSL Nuveen Senior Income Fund 11.00 8.72 16,638
2,538 ARK Senior High Income
Portfolio, Incorporated 10.00 5.87 14,898
4,670 VVR Van Kampen Senior Income
Trust 24.50 7.91 36,940
--------
$150,846
========
</Table>
Notes to Portfolio
(1) All securities are represented entirely by contracts to purchase
securities, which were entered into by the sponsor on July 24, 2003. All
contracts for domestic securities are expected to be settled by the initial
settlement date for the purchase of units.
(2) Valuation of securities by the trustee was made using the market value per
share as of the Evaluation Time on July 24, 2003. Subsequent to inception,
securities are valued, for securities quoted on a national securities
exchange or Nasdaq National Market System, or a foreign securities
exchange, at the closing sales price.
(3) There was a $536 loss to the sponsor on the Inception Date.
Understanding Your Investment 21
<Page>
REPORT OF INDEPENDENT AUDITORS
UNITHOLDERS
CLAYMORE SECURITIES DEFINED PORTFOLIOS, SERIES 154
We have audited the accompanying statement of financial condition, including the
trust portfolio set forth on page 18 of this prospectus, of Claymore Securities
Defined Portfolios, Series 154, as of July 25, 2003, the initial date of
deposit. This statement of financial condition is the responsibility of the
trust's sponsor. Our responsibility is to express an opinion on this financial
statement 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 financial
statement is free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statement. Our procedures included confirmation with The Bank of New York,
Trustee, of cash deposited for the purchases of securities, as shown in the
statement of financial condition as of July 25, 2003. An audit also includes
assessing the accounting principles used and significant estimates made by the
sponsor, as well as evaluating the overall financial statement presentation. We
believe that our audit of the statement of financial condition provides a
reasonable basis for our opinion.
In our opinion, the statement of financial condition referred to above
presents fairly, in all material respects, the financial position of Claymore
Securities Defined Portfolios, Series 154 as of July 25, 2003, in conformity
with accounting principles generally accepted in the United States of America.
Grant Thornton LLP
Chicago, Illinois
July 25, 2003
22 Understanding Your Investment
<Page>
CLAYMORE SECURITIES DEFINED PORTFOLIOS, SERIES 154
STATEMENT OF FINANCIAL CONDITION
AS OF THE INCEPTION DATE, JULY 25, 2003
<Table>
INVESTMENT IN SECURITIES
Sponsor's contracts to purchase underlying
securities backed by cash deposited(1)(2)........ $150,846
-------
$150,846
=======
LIABILITIES AND INTEREST OF INVESTORS
Liabilities:
Organization costs(3)........................... $ 1,219
Deferred sales fee(4)........................... 5,257
-------
6,476
Interest of investors:
Cost to investors(5)............................ 152,370
Less: gross underwriting commission and
organization costs(3)(4)(5)(6)................. 8,000
-------
Net interest of investors....................... 144,370
-------
Total......................................... $150,846
=======
Number of units................................... 15,237
=======
Net Asset Value per Unit.......................... $ 9.475
=======
</Table>
- -------------------------
(1) Aggregate cost of the securities is based on the closing sale price
evaluations as determined by the trustee.
(2) Cash has been deposited with The Bank of New York, trustee, covering the
funds (aggregating $151,382) necessary for the purchase of the securities
in the trust represented by purchase contracts.
(3) A portion of the Public Offering Price represents an amount sufficient to
pay for all or a portion of the costs incurred in establishing the trust.
These costs have been estimated at $8.00 per 100 units for the trust. A
distribution will be made as of the close of the initial offering period or
six months after the initial date of deposit (at the discretion of the
sponsor) to an account maintained by the trustee from which this obligation
of the investors 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 deducted from
the assets of the trust.
(4) The total transactional sales fee consists of an initial sales fee and a
deferred sales fee. The initial sales fee is equal to the difference
between the maximum sales fee and the sum of the remaining deferred sales
fee and the C&D Fee. On the Inception Date, the total transactional sales
fee is 4.45% of the Public Offering Price (equivalent to 4.657% of the net
amount invested). The deferred sales fee is equal to $0.345 per unit.
(5) The aggregate cost to investors includes the applicable transactional sales
fee assuming no reduction of transactional sales fees for quantity
purchases.
(6) The trust is committed to pay a creation and development fee of $5.00 per
$1,000 invested at the close of the initial public offering period.
Understanding Your Investment 23
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CLAYMORE SECURITIES DEFINED PORTFOLIOS
CLAYMORE CLOSED-END PORTFOLIO PROSPECTUS
PROSPECTUS PART B DATED JULY 25, 2003
THE PROSPECTUS FOR A CLAYMORE SECURITIES DEFINED PORTFOLIO (A "TRUST") IS
DIVIDED INTO TWO PARTS. PART A OF THE PROSPECTUS RELATES EXCLUSIVELY TO A
PARTICULAR TRUST OR TRUSTS AND PROVIDES SPECIFIC INFORMATION REGARDING EACH
TRUST'S PORTFOLIO, STRATEGIES, INVESTMENT OBJECTIVES, EXPENSES, FINANCIAL
HIGHLIGHTS, INCOME AND CAPITAL DISTRIBUTIONS, HYPOTHETICAL PERFORMANCE
INFORMATION, RISK FACTORS AND OPTIONAL FEATURES. PART B OF THE PROSPECTUS
PROVIDES MORE GENERAL INFORMATION REGARDING THE CLAYMORE SECURITIES DEFINED
PORTFOLIOS. YOU SHOULD READ BOTH PARTS OF THE PROSPECTUS AND RETAIN THEM FOR
FUTURE REFERENCE. EXCEPT AS PROVIDED IN PART A OF THE PROSPECTUS, THE
INFORMATION CONTAINED IN THIS PART B WILL APPLY TO EACH TRUST.
CONTENTS
<Table>
General Information............................... 2
Investment Policies............................... 2
Risk Factors...................................... 3
Administration of the Trust....................... 11
Expenses of the Trust............................. 16
Portfolio Transactions and Brokerage Allocation... 17
Purchase, Redemption and Pricing of Units......... 18
Taxes............................................. 21
Experts........................................... 23
Performance Information........................... 24
Description of Ratings............................ 24
</Table>
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GENERAL INFORMATION
Each trust is one of a series of separate unit investment trusts created
under the name Claymore Securities Defined Portfolios and registered under the
Investment Company Act of 1940 and the Securities Act of 1933. Each trust was
created as a common law trust on the inception date described in the prospectus
under the laws of the state of New York. Each trust was created under a trust
agreement among Claymore Securities, Inc. (as sponsor, evaluator and supervisor)
and The Bank of New York (as trustee).
When your trust was created, the sponsor delivered to the trustee securities
or contracts for the purchase thereof for deposit in the trust and the trustee
delivered to the sponsor documentation evidencing the ownership of units of the
trust. After your trust is created, the sponsor may deposit additional
securities in the trust, contracts to purchase additional securities along with
cash (or a bank letter of credit in lieu of cash) to pay for such contracted
securities or cash (including a letter of credit) with instructions to purchase
additional securities. Such additional deposits will be in amounts which will
seek to maintain, for the first 90 days, as closely as possible the same
original percentage relationship among the number of shares of each security in
the trust established by the initial deposit of securities and, thereafter, the
same percentage relationship that existed on such 90th day. If the sponsor
deposits cash, existing and new investors may experience a dilution of their
investments and a reduction in their anticipated income because of fluctuations
in the prices of the securities between the time of the cash deposit and the
purchase of the securities and because the trust will pay the associated
brokerage fees.
A trust consists of (a) the securities listed under "Trust Portfolio" in the
prospectus as may continue to be held from time to time in the trust, (b) any
additional securities acquired and held by the trust pursuant to the provisions
of the trust agreement and (c) any cash held in the accounts of the trust.
Neither the sponsor nor the trustee shall be liable in any way for any failure
in any of the securities. However, should any contract for the purchase of any
of the securities initially deposited in a trust fail, the sponsor will, unless
substantially all of the moneys held in the trust to cover such purchase are
reinvested in substitute securities in accordance with the trust agreement,
refund the cash and sales charge attributable to such failed contract to all
unitholders on the next distribution date.
INVESTMENT POLICIES
The trust is a unit investment trust and is not an "actively managed" fund.
Traditional methods of investment management for a managed fund typically
involve frequent changes in a portfolio of securities on the basis of economic,
financial and market analysis. The portfolio of a trust, however, will not be
actively managed and therefore the adverse financial condition of an issuer will
not necessarily require the sale of its securities from a portfolio.
The trust agreement provides that the sponsor may (but need not) direct the
trustee to dispose of a security in certain events such as the issuer having
defaulted on the payment on any of its outstanding obligations or the price of a
security has declined to such an extent or other such credit factors exist so
that in the opinion of the sponsor the retention of such securities would be
detrimental to the trust. If a public tender offer has been made for a security
or a merger or acquisition has been announced affecting a security, the trustee
may either sell the security or accept a tender offer for cash if the supervisor
determines that the sale or tender is in the best interest of unitholders. The
trustee will distribute any cash proceeds to unitholders. Pursuant to the trust
agreement and with limited exceptions, the trustee may sell any securities or
other properties acquired in exchange for securities such as those acquired in
connection with a merger or other transaction. If offered such new or exchanged
securities or property other than cash, the trustee shall reject the offer.
However, in the event such securities or property are nonetheless acquired by
the trust, they may be accepted for deposit in a trust and either sold by the
trustee or held in a trust pursuant to the direction of the sponsor. Proceeds
from the sale of securities (or any securities or other property received by the
trust in exchange for securities) are credited to the Capital Account for
distribution to unitholders or to meet redemptions.
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Except as stated in the trust agreement, or in the prospectus, the
acquisition by the trust of any securities other than the portfolio securities
is prohibited. The trustee may sell securities, designated by the sponsor, from
the trust for the purpose of redeeming units of a trust tendered for redemption
and the payment of expenses and for such other purposes as permitted under the
trust agreement.
Notwithstanding the foregoing, the trustee is authorized to reinvest any
funds held in the Capital or Income Accounts, pending distribution, in U.S.
Treasury obligations which mature on or before the next applicable distribution
date. Any obligations so acquired must be held until they mature and proceeds
therefrom may not be reinvested.
Proceeds from the sale of securities (or any securities or other property
received by a trust in exchange for securities) are credited to the Capital
Account of a trust for distribution to unitholders or to meet redemptions.
Except for failed securities and as provided in the prospectus or in the trust
agreement, the acquisition by a trust of any securities other than the portfolio
securities is prohibited. The trustee may sell securities from a trust for
limited purposes, including redeeming units tendered for redemption and the
payment of expenses.
RISK FACTORS
The primary risk factors are set forth in Part A of the prospectus. An
additional discussion of certain risk factors is set forth below.
CLOSED-END FUND RISKS. The trust may invest in the common stock of
closed-end funds ("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.
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. 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.
HIGH-YIELD BOND RISKS. If set forth in Part A of the prospectus, a trust, or
issuers of securities held by a trust, may invest in high-yield bonds.
High-yield, high risk bonds are subject to greater market fluctuations and risk
of loss than bonds with higher investment ratings. The value of these bonds 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" bonds, the generic names for bonds rated below "Triple
B" by Standard & Poor's or "Baa" 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 bonds are
generally subordinated obligations and are perceived by investors to be riskier
than higher rated bonds, their prices tend to fluctuate more than higher rated
bonds and are affected by short-term credit developments to a greater degree.
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The market for high-yield bonds is smaller and less liquid than that for
investment grade bonds. High-yield bonds 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 bonds, the bid- offer spread on such
bonds is generally greater than it is for investment grade bonds and the
purchase or sale of such bonds may take longer to complete.
PREFERRED STOCK RISKS. If set forth in Part A of the prospectus, a trust, or
issuers of securities held by a trust, may invest in preferred stock. If this is
the case, an investment in units should be made with an understanding of the
risks which an investment in preferred stocks entails, including the risk that
the financial condition of the issuers of the securities or the general
condition of the preferred stock market may worsen, and the value of the
preferred stocks and therefore the value of the units may decline. Preferred
stocks may be susceptible to general stock market movements and to volatile
increases and decreases of value as market confidence in and perceptions of the
issuers change. These perceptions are based on unpredictable factors, including
expectations regarding government, economic, monetary and fiscal policies,
inflation and interest rates, economic expansion or contraction, market
liquidity, and global or regional political, economic or banking crises.
Preferred stocks are also vulnerable to congressional reductions in the
dividends-received deduction which would adversely affect the after-tax return
to the investors who can take advantage of the deduction. Such a reduction might
adversely affect the value of preferred stocks in general. Holders of preferred
stocks, as owners of the entity, have rights to receive payments from the
issuers of those preferred stocks that are generally subordinate to those of
creditors of, or holders of debt obligations or, in some cases, other senior
preferred stocks of, such issuers. Preferred stocks do not represent an
obligation of the issuer and, therefore, do not offer any assurance of income or
provide the same degree of protection of capital as do debt securities. The
issuance of additional debt securities or senior preferred stocks will create
prior claims for payment of principal and interest and senior dividends which
could adversely affect the ability and inclination of the issuer to declare or
pay dividends on its preferred stock or the rights of holders of preferred stock
with respect to assets of the issuer upon liquidation or bankruptcy. The value
of preferred stocks is subject to market fluctuations for as long as the
preferred stocks remain outstanding, and thus the value of the securities may be
expected to fluctuate over the life of the trust to values higher or lower than
those prevailing on the initial date of deposit.
CONVERTIBLE SECURITIES RISKS. If set forth in Part A of the prospectus, a
trust, or issuers of securities held by a trust, may invest in convertible
securities.
Convertible securities generally offer lower interest or dividend yields
than non-convertible fixed-income securities of similar credit quality because
of the potential for capital appreciation. The market values of convertible
securities tend to decline as interest rates increase and, conversely, to
increase as interest rates decline. However, a convertible security's market
value also tends to reflect the market price of the common stock of the issuing
company, particularly when the stock price is greater than the convertible
security's conversion price. The conversion price is defined as the
predetermined price or exchange ratio at which the convertible security can be
converted or exchanged for the underlying common stock. As the market price of
the underlying common stock declines below the conversion price, the price of
the convertible security tends to be increasingly influenced more by the yield
of the convertible security than by the market price of the underlying common
stock. Thus, it may not decline in price to the same extent as the underlying
common stock, and convertible securities generally have less potential for gain
or loss than common stocks. However, mandatory convertible securities (as
discussed below) generally do not limit the potential for loss to the same
extent as securities convertible at the option of the holder. In the event of a
liquidation of the issuing company, holders of convertible securities would be
paid before that company's common stockholders. Consequently, an issuer's
convertible securities generally entail less risk than its common stock.
However, convertible securities fall below debt obligations of the same issuer
in order of preference or priority in the event of a liquidation and are
typically unrated or rated lower than such debt obligations. In addition,
contingent payment, convertible securities allow the issuer to claim deductions
based on its nonconvertible cost of debt, which generally will result in
deduction in excess of the actual cash payments made on the securities (and
accordingly, holders will recognize income in amounts in excess of the cash
payments received).
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Mandatory convertible securities are distinguished as a subset of
convertible securities because the conversion is not optional and the conversion
price at maturity is based solely upon the market price of the underlying common
stock, which may be significantly less than par or the price (above or below
par) paid. For these reasons, the risks associated with investing in mandatory
convertible securities most closely resemble the risks inherent in common
stocks. Mandatory convertible securities customarily pay a higher coupon yield
to compensate for the potential risk of additional price volatility and loss
upon conversion. Because the market price of a mandatory convertible security
increasingly corresponds to the market price of its underlying common stock as
the convertible security approaches its conversion date, there can be no
assurance that the higher coupon will compensate for the potential loss.
SENIOR LOAN RISKS. If set forth in Part A of the prospectus, a trust, or
issuers of securities held by a trust, may invest in Senior Loans.
Senior Loans in which a Closed-End Fund may invest:
- generally are of below investment grade credit quality;
- may be unrated at the time of investment;
- generally are not registered with the SEC or any state securities
commission; and
- generally are not listed on any securities exchange.
The amount of public information available on Senior Loans generally will be
less extensive than that available for other types of assets.
No reliable, active trading market currently exists for many Senior Loans,
although a secondary market for certain Senior Loans has developed over the past
several years. Senior Loans are thus relatively illiquid. Liquidity relates to
the ability of a Closed-End Fund to sell an investment in a timely manner at a
price approximately equal to its value on the Closed-End Fund's books. The
illiquidity of Senior Loans may impair a Closed-End Fund's ability to realized
the full value of its assets in the event of a voluntary or involuntary
liquidation of such assets. Because of the lack of an active trading market,
illiquid securities are also difficult to value and prices provided by external
pricing services may not reflect the true value of the securities. However, many
Senior Loans are of a large principal amount and are held by a large number of
financial institutions. To the extent that a secondary market does exist for
certain Senior Loans, the market may be subject to irregular trading activity,
wide bid/ask spreads and extended trade settlement periods. The market for
Senior Loans could be disrupted in the event of an economic downturn or a
substantial increase or decrease in interest rates. This could result in
increased volatility in the market and in the trusts' net asset value.
If legislation or state or federal regulators impose additional requirements
or restrictions on the ability of financial institutions to make loans that are
considered highly leveraged transactions, the availability of Senior Loans for
investment by the Closed-End Funds may be adversely affected. In addition, such
requirements or restrictions could reduce or eliminate sources of financing for
certain Borrowers. This would increase the risk of default. If legislation or
federal or state regulators require financial institutions to dispose of Senior
Loans that are considered highly leveraged transactions or subject such Senior
Loans to increased regulatory scrutiny, financial institutions may determine to
sell such Senior Loans. Such sales could result in depressed prices. If a
Closed-End Fund attempts to sell a Senior Loan at a time when a financial
institution is engaging in such a sale, the price a Closed-End Fund could get
for the Senior Loan may be adversely affected.
Some Senior Loans are subject to the risk that a court, pursuant to
fraudulent conveyance or other similar laws, could subordinate the Senior Loans
to presently existing or future indebtedness of the Borrower or take other
action detrimental to Lenders. Such court action could under certain
circumstances include invalidation of Senior Loans. Any
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Lender, which could include a Closed-End Fund, is subject to the risk that a
court could find the Lender liable for damages in a claim by a Borrower arising
under the common laws of tort or contracts or anti-fraud provisions of certain
securities laws for actions taken or omitted to be taken by the Lenders under
the relevant terms of a Loan Agreement or in connection with actions with
respect to the collateral underlying the Senior Loan.
MUNICIPAL BOND RISKS. If set forth in Part A of the prospectus, a trust, or
issuers of securities held by a trust, may invest in municipal bonds. If this is
the case, an investment in units should be made with an understanding of the
risks which an investment in municipal bonds entails.
FAILURE OF ISSUERS TO PAY INTEREST AND/OR PRINCIPAL. The primary risk
associated with an investment in municipal bonds is that the issuer or an
insurer of the municipal bond will default on principal and/or interest payments
when due on the municipal bond. Such a default would have the effect of
lessening the income generated by each trust and/or the value of the trust's
units. The bond ratings assigned by major rating organizations are an indication
of the issuer's ability to make interest and principal payments when due on its
municipal bonds. Subsequent to the initial date of deposit the rating assigned
to a municipal bond may decline. Neither the sponsor nor the trustee shall be
liable in any way for any default, failure or defect in any bond.
FIXED-RATE BONDS. Municipal bonds are subject to the risk that the value of
such municipal bonds (and, therefore, of the units) will decline with increases
in interest rates or a decrease in the federal or state (if applicable) income
tax rate. Inflation and economic recession are two of the major factors, among
others, which contribute to fluctuations in interest rates and the values of
fixed-rate municipal bonds.
ORIGINAL ISSUE DISCOUNT BONDS AND ZERO COUPON BONDS. Certain municipal bonds
may be original issue discount bonds and/ or zero coupon bonds. Original issue
discount bonds are bonds originally issued at less than the market interest
rate. Zero coupon bonds are original issue discount bonds that do not provide
for the payment of any current interest. Zero coupon bonds are subject to
substantially greater price fluctuations during periods of changing market
interest rates than bonds of comparable quality that pay current income. For
federal income tax purposes, original issue discount on tax-exempt bonds must be
accrued over the term of the bonds. On sale or redemption of the bonds, the
difference between (i) the amount realized (other than amounts treated as
tax-exempt income) and (ii) the tax basis of such bonds (properly adjusted, in
the circumstances described below, for the accrual of original issue discount)
will generally be treated as taxable gain or loss.
"WHEN ISSUED" AND "DELAYED DELIVERY" BONDS. Certain municipal bonds may have
been purchased by the sponsor or issuers of the securities in a trust on a "when
issued" basis. Municipal bonds purchased on a "when issued" basis have not yet
been issued by their governmental entity on the initial date of deposit
(although such governmental entity had committed to issue such municipal bonds).
In the case of these and/or certain other municipal bonds, the delivery of the
municipal bonds may be delayed ("delayed delivery") or may not occur. The effect
of a trust containing "delayed delivery" or "when issued" municipal bonds is
that unitholders who purchased their units prior to the date such municipal
bonds are actually delivered to the trustee may have to make a downward
adjustment in the tax basis of their units. Such downward adjustment may be
necessary to account for interest accruing on such "when issued" or "delayed
delivery" municipal bonds during the time between their purchase of units and
delivery of such municipal bonds to a trust.
REDEMPTION OR SALE PRIOR TO MATURITY. Certain municipal bonds are subject to
redemption prior to their stated maturity date pursuant to sinking fund or call
provisions. A call or redemption provision is more likely to be exercised when
the offering price valuation of a bond is higher than its call or redemption
price. Such price valuation is likely to be higher in periods of declining
interest rates. Certain municipal bonds may be sold or redeemed or otherwise
mature.
MARKET DISCOUNT. Certain municipal bonds have current market values below
face value. A primary reason for the market value of such municipal bonds being
less than face value at maturity is that the interest rate of such municipal
bonds is at lower rates than the current market interest rate for comparably
rated municipal bonds.
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Municipal bonds selling at market discounts tend to increase in market value as
they approach maturity. A market discount tax-exempt municipal bond held to
maturity will have a larger portion of its total return in the form of taxable
ordinary income and less in the form of tax-exempt income than a comparable
municipal bond bearing interest at current market rates.
GENERAL OBLIGATION BONDS. Certain municipal bonds may be general obligations
of a governmental entity that are secured by the taxing power of the entity.
General obligation bonds are backed by the issuer's pledge of its full faith,
credit and taxing power for the payment of principal and interest. The taxing
power of any governmental entity may be limited, however, by provisions of state
constitutions or laws. An entity's credit will depend on many factors: tax base,
reliance on federal or state aid, and factors that are beyond the entity's
control.
APPROPRIATIONS BONDS. Certain municipal bonds may be municipal bonds that
are, in whole or in part, subject to and dependent upon either the governmental
entity making appropriations from time to time or the continued existence of
special temporary taxes which require legislative action for their reimposition.
The availability of any appropriation is subject to the willingness or ability
of the governmental entity to continue to make such special appropriations or to
reimpose such special taxes. The obligation to make lease payments exists only
to the extent of the monies available to the governmental entity therefor, and
no liability is incurred by the governmental entity beyond the monies so
appropriated. Once an annual appropriation is made, the governmental entity's
obligation to make lease rental payments is absolute and unconditional
regardless of any circumstances or occurrences which might arise. In the event
of non-appropriation, certificateholders' or bondowners' sole remedy (absent
credit enhancement) generally is limited to repossession of the collateral for
resale or releasing. In the event of non-appropriation, the sponsor may instruct
the trustee to sell such municipal bonds.
INDUSTRIAL DEVELOPMENT REVENUE BONDS ("IDRS"). IDRs, including pollution
control revenue bonds, are tax-exempt securities issued by states,
municipalities, public authorities or similar entities to finance the cost of
acquiring, constructing or improving various projects. These projects are
usually operated by corporate entities. IDRs are not general obligations of
governmental entities backed by their taxing power. Issuers are only obligated
to pay amounts due on the IDRs to the extent that funds are available from the
unexpended proceeds of the IDRs or receipts or revenues of the issuer. Payment
of IDRs is solely dependent upon the creditworthiness of the corporate operator
of the project or corporate guarantor. Such corporate operators or guarantors
that are industrial companies may be affected by many factors which may have an
adverse impact on the credit quality of the particular company or industry.
HOSPITAL AND HEALTH CARE FACILITY BONDS. The ability of hospitals and other
health care facilities to meet their obligations with respect to revenue bonds
issued on their behalf is dependent on various factors. Some such factors are
the level of payments received from private third-party payors and government
programs and the cost of providing health care services. There can be no
assurance that payments under governmental programs will remain at levels
comparable to present levels or will be sufficient to cover the costs associated
with their bonds. It also may be necessary for a hospital or other health care
facility to incur substantial capital expenditures or increased operating
expenses to effect changes in its facilities, equipment, personnel and services.
Hospitals and other health care facilities are additionally subject to claims
and legal actions by patients and others in the ordinary course of business.
There can be no assurance that a claim will not exceed the insurance coverage of
a health care facility or that insurance coverage will be available to a
facility.
HOUSING BONDS. Multi-family housing revenue bonds and single family mortgage
revenue bonds are state and local housing issues that have been issued to
provide financing for various housing projects. Multi-family housing revenue
bonds are payable primarily from mortgage loans to housing projects for low to
moderate income families. Single-family mortgage revenue bonds are issued for
the purpose of acquiring notes secured by mortgages on residences. The ability
of housing issuers to make debt service payments on their obligations may be
affected by various economic and non-economic factors. Such factors include:
occupancy levels, adequate rental income in multi-family projects, the rate of
default on mortgage loans underlying single family issues and the ability of
mortgage insurers to pay claims. All single family mortgage revenue bonds and
certain multi-family housing revenue bonds are
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prepayable over the life of the underlying mortgage or mortgage pool. Therefore,
the average life of housing obligations cannot be determined. However, the
average life of these obligations will ordinarily be less than their stated
maturities. Mortgage loans are frequently partially or completely prepaid prior
to their final stated maturities. To the extent that these obligations were
valued at a premium when a unitholder purchased units, any prepayment at par
would result in a loss of capital to the unitholder and reduce the amount of
income that would otherwise have been paid to unitholders.
POWER BONDS. The ability of utilities to meet their obligations with respect
to bonds they issue is dependent on various factors. These factors include the
rates they may charge their customers, the demand for a utility's services and
the cost of providing those services. Utilities may also be subject to extensive
regulations relating to the rates which they may charge customers. Utilities can
experience regulatory, political and consumer resistance to rate increases.
Utilities engaged in long-term capital projects are especially sensitive to
regulatory lags in granting rate increases. Utilities are additionally subject
to increased costs due to governmental environmental regulation and decreased
profits due to increasing competition. Any difficulty in obtaining timely and
adequate rate increases could adversely affect a utility's results of
operations. The sponsor cannot predict at this time the ultimate effect of such
factors on the ability of any issuers to meet their obligations with respect to
municipal bonds.
WATER AND SEWER REVENUE BONDS. Water and sewer bonds are generally payable
from user fees. The ability of state and local water and sewer authorities to
meet their obligations may be affected by a number of factors. Some such factors
are the failure of municipalities to utilize fully the facilities constructed by
these authorities, declines in revenue from user charges, the possible inability
to obtain rate increases, rising construction and maintenance costs, impact of
environmental requirements, the difficulty of obtaining or discovering new
supplies of fresh water, the effect of conservation programs, the impact of "no
growth" zoning ordinances and the continued availability of federal and state
financial assistance and of municipal bond insurance for future bond issues.
EDUCATION, UNIVERSITY AND COLLEGE BONDS. The ability of educational
institutions, including universities and colleges, to meet their obligations is
dependent upon various factors. Some of these factors include the size and
diversity of their sources of revenues, enrollment, reputation, management
expertise, the availability and restrictions on the use of endowments and other
funds, the quality and maintenance costs of campus facilities. Also, in the case
of public institutions, the financial condition of the relevant state or other
governmental entity and its policies with respect to education may affect an
institution's ability to make payment on its own.
LEASE RENTAL BONDS. Lease rental bonds are predominantly issued by
governmental authorities that have no taxing power or other means of directly
raising revenues. Rather, the authorities are financing vehicles created solely
for the construction of buildings or the purchase or equipment that will be used
by a state or local government. Thus, the bonds are subject to the ability and
willingness of the lessee government to meet its lease rental payments which
include debt service on the bonds. Lease rental bonds are subject to the risk
that the lessee government is not legally obligated to budget and appropriate
for the rental payments beyond the current fiscal year. These bonds are also
subject to the risk of abatement in many states as rental bonds cease in the
event that damage, destruction or condemnation of the project prevents its use
by the lessee. Also, in the event of default by the lessee government, there may
be significant legal and/or practical difficulties involved in the reletting or
sale of the project.
CAPITAL IMPROVEMENT FACILITY BONDS. Capital improvement bonds are bonds
issued to provide funds to assist political subdivisions or agencies of a state
through acquisition of the underlying debt of a state or local political
subdivision or agency. The risks of an investment in such bonds include the risk
of possible prepayment or failure of payment of proceeds on and default of the
underlying debt.
SOLID WASTE DISPOSAL BONDS. Municipal bonds issued for solid waste disposal
facilities are generally payable from tipping fees and from revenues that may be
earned by the facility on the sale of electrical energy generated in the
combustion of waste products. The ability of solid waste disposal facilities to
meet their obligations depends upon the continued use of the facility, the
successful and efficient operation of the facility and, in the case of
waste-to-energy
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facilities, the continued ability of the facility to generate electricity on a
commercial basis. Also, increasing environmental regulation of the federal,
state and local level has a significant impact on waste disposal facilities.
While regulation requires most waste producers to use waste disposal facilities,
it also imposes significant costs on the facilities.
MORAL OBLIGATION BONDS. Certain bonds may be "moral obligation" bonds. If an
issuer of moral obligation bonds is unable to meet its obligations, the
repayment of the bonds becomes a moral commitment but not a legal obligation of
the state or municipality in question. Thus, such a commitment generally
requires appropriation by the state legislature and accordingly does not
constitute a legally enforceable obligation of debt of the state. The agencies
or authorities generally have no taxing power.
REFUNDED BONDS. Refunded bonds are typically secured by direct obligations
of the U.S. Government, or in some cases obligations guaranteed by the U.S.
Government, placed in an escrow account maintained by an independent trustee
until maturity or a predetermined redemption date. These obligations are
generally non-callable prior to maturity or the predetermined redemption date.
In a few isolated instances to date, however, bonds which were thought to be
escrowed to maturity have been called for redemption prior to maturity.
AIRPORT, PORT AND HIGHWAY REVENUE BONDS. Certain facility revenue bonds are
payable from and secured by the revenues from the ownership and operation of
particular facilities, such as airports, highways and port authorities. Airport
operating income may be affected by the ability of airlines to meet their
obligations under the agreements with airports. Similarly, payment on bonds
related to other facilities is dependent on revenues from the projects, such as
use fees from ports, tolls on turnpikes and bridges and rents from buildings.
Payment may be adversely affected by reduction in revenues due to such factors
and increased cost of maintenance or decreased use of a facility. The sponsor
cannot predict what effect conditions may have on revenues which are dependent
for payment on these bonds.
SPECIAL TAX BONDS. Special tax bonds are payable for and secured by the
revenues derived by a municipality from a particular tax. Examples of special
taxes are a tax on the rental of a hotel room, on the purchase of food and
beverages, on the rental of automobiles or on the consumption of liquor. Special
tax bonds are not secured by the general tax revenues of the municipality, and
they do not represent general obligations of the municipality. Payment on
special tax bonds may be adversely affected by a reduction in revenues realized
from the underlying special tax. Also, should spending on the particular goods
or services that are subject to the special tax decline, the municipality may be
under no obligation to increase the rate of the special tax to ensure that
sufficient revenues are raised from the shrinking taxable base.
TAX ALLOCATION BONDS. Tax allocation bonds are typically secured by
incremental tax revenues collected on property within the areas where
redevelopment projects, financed by bond proceeds are located. Municipal bond
payments are expected to be made from projected increases in tax revenues
derived from higher assessed values of property resulting from development in
the particular project area and not from an increase in tax rates. Special risk
considerations include: variations in taxable values of property in the project
area; successful appeals by property owners of assessed valuations; substantial
delinquencies in the payment of property taxes; or imposition of any
constitutional or legislative property tax rate decrease.
TRANSIT AUTHORITY BONDS. Mass transit is generally not self-supporting from
fare revenues. Additional financial resources must be made available to ensure
operation of mass transit systems as well as the timely payment of debt service.
Often such financial resources include federal and state subsidies, lease
rentals paid by funds of the state or local government or a pledge of a special
tax. If fare revenues or the additional financial resources do not increase
appropriately to pay for rising operating expenses, the ability of the issuer to
adequately service the debt may be adversely affected.
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CONVENTION FACILITY BONDS. Municipal bonds in the convention facilities
category include special limited obligation securities issued to finance
convention and sports facilities payable from rental payments and annual
governmental appropriations. The governmental agency is not obligated to make
payments in any year in which the monies have not been appropriated to make such
payments. In addition, these facilities are limited use facilities that may not
be used for purposes other than as convention centers or sports facilities.
CORRECTIONAL FACILITY BONDS. Municipal bonds in the correctional facilities
category include special limited obligation securities issued to construct,
rehabilitate and purchase correctional facilities payable from governmental
rental payments and/ or appropriations.
TOBACCO SETTLEMENT BONDS. Tobacco settlement bonds are municipal obligations
that are backed entirely by expected revenues to be derived from lawsuits
settled between governmental entities and American tobacco companies involving
tobacco related deaths and illnesses. The settlements primarily involve Phillip
Morris; R.J. Reynolds; Brown & Williamson, a division of British American
Tobacco; and Lorillard, a division of the Loews Corporation. Revenues from
approximately 17 other companies are also providing part of the settlement
payments. Because tobacco settlement bonds are backed by a single source of
revenue--the payments from tobacco companies, the creditworthiness of the bonds
depends in large part, on the ability of these companies to meet their
obligations. Risk factors facing tobacco companies include: reduced cigarette
consumption, increased taxes on cigarettes, continuing litigation and the
possibility of bankruptcy. The initial and annual payments made by the tobacco
companies will be adjusted based on a number of factors, the most important of
which is domestic cigarette consumption. If the volume of cigarettes shipped in
the U.S. by manufacturers participating in the settlement decreases
significantly, payments due from them will also decrease. Demand for cigarettes
in the U.S. could continue to decline due to price increases needed to recoup
the cost of payments by tobacco companies. Demand could also be affected by:
anti-smoking campaigns, tax increases, reduced advertising, enforcement of laws
prohibiting sales to minors; elimination of certain sales venues such as vending
machines; and the spread of local ordinances restricting smoking in public
places.
MARKET DISCOUNTS OR PREMIUMS. Certain of the securities may have been
deposited at a market discount or premium principally because their dividend
rates are lower or higher than prevailing rates on comparable securities. The
current returns of market discount securities are lower than comparably rated
securities selling at par because discount securities tend to increase in market
value as they approach maturity. The current returns of market premium
securities are higher than comparably rated securities selling at par because
premium securities tend to decrease in market value as they approach maturity.
Because part of the purchase price is returned through current income payments
and not at maturity, an early redemption at par of a premium security will
result in a reduction in yield to the trust. Market premium of discount
attributable to dividend rate changes does not indicate market confidence or
lack of confidence in the issue.
LITIGATION AND LEGISLATION. From time to time Congress considers proposals
to reduce the rate of the dividends-received deduction. Enactment into law of a
proposal to reduce the rate would adversely affect the after-tax return to
investors who can take advantage of the deduction. Unitholders are urged to
consult their own tax advisers. Further, at any time litigation may be initiated
on a variety of grounds, or legislation may be enacted with respect to the
securities in a trust or the issuers of the securities. There can be no
assurance that future litigation or legislation will not have a material adverse
effect on the trust or will not impair the ability of issuers to achieve their
business goals.
FIXED PORTFOLIO. Investors should be aware that the trust is not "managed"
and as a result, the adverse financial condition of a company will not result in
the elimination of its securities from the portfolio of the trust except under
extraordinary circumstances. Investors should note in particular that the
securities were selected on the basis of the criteria set forth in the
prospectus and that the trust may continue to purchase or hold securities
originally selected through this process even though the evaluation of the
attractiveness of the securities may have changed. A number of the securities in
the trust may also be owned by other clients of the sponsor. However, because
these clients may have differing investment objectives, the sponsor may sell
certain securities from those accounts in instances where a sale by the trust
would be impermissible, such as to maximize return by taking advantage of market
fluctuations. In the event a
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public tender offer is made for a security or a merger or acquisition is
announced affecting a security, the sponsor may instruct the trustee to tender
or sell the security on the open market when, in its opinion, it is in the best
interest of the unitholders of the unit to do so. Although the portfolio is
regularly reviewed and evaluated and the sponsor may instruct the trustee to
sell securities under certain limited circumstances, securities will not be sold
by the trust to take advantage of market fluctuations or changes in anticipated
rates of appreciation. As a result, the amount realized upon the sale of the
securities may not be the highest price attained by an individual security
during the life of the trust. The prices of single shares of each of the
securities in the trust vary widely, and the effect of a dollar of fluctuation,
either higher or lower, in stock prices will be much greater as a percentage of
the lower-price stocks' purchase price than as a percentage of the higher-price
stocks' purchase price.
LIQUIDITY. Whether or not the securities are listed on a national securities
exchange, the principal trading market for the securities may be in the
over-the-counter market. As a result, 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. In addition, a trust is
restricted under the Investment Company Act of 1940 from selling securities to
the sponsor. The price at which the securities may be sold to meet redemptions
and the value of a trust will be adversely affected if trading markets for the
securities are limited or absent.
ADDITIONAL DEPOSITS. The trust agreement authorizes the sponsor to increase
the size of a trust and the number of units thereof by the deposit of additional
securities, or cash (including a letter of credit) with instructions to purchase
additional securities, in such trust and the issuance of a corresponding number
of additional units. If the sponsor deposits cash, existing and new investors
may experience a dilution of their investments and a reduction in their
anticipated income because of fluctuations in the prices of the securities
between the time of the cash deposit and the purchase of the securities and
because a trust will pay the associated brokerage fees. To minimize this effect,
the trust will attempt to purchase the securities as close to the evaluation
time or as close to the evaluation prices as possible.
Some of the securities may have limited trading volume. The trustee, with
directions from the sponsor, will endeavor to purchase securities with deposited
cash as soon as practicable reserving the right to purchase those securities
over the 20 business days following each deposit in an effort to reduce the
effect of these purchases on the market price of those securities. This could,
however, result in the trust's failure to participate in any appreciation of
those securities before the cash is invested. If any cash remains at the end of
this period (and such date is within the 90-day period following the inception
date) and cannot be invested in one or more securities, at what the sponsor
considers reasonable prices, it intends to use that cash to purchase each of the
other securities in the original proportionate relationship among those
securities. Similarly, at termination of the trust, the sponsor reserves the
right to sell securities over a period of up to 20 business days to lessen the
impact of its sales on the market price of the securities. The proceeds received
by unitholders following termination of the trust will reflect the actual sales
proceeds received on the securities, which will likely differ from the closing
sale price on the termination date.
ADMINISTRATION OF THE TRUST
DISTRIBUTIONS TO UNITHOLDERS. Income received by a trust is credited by the
trustee to the Income Account of the trust. Other receipts are credited to the
Capital Account of a trust. Income received by a trust will be distributed on or
shortly after the distribution dates each year shown in the prospectus on a pro
rata basis to unitholders of record as of the preceding record date shown in the
prospectus. All distributions will be net of applicable expenses. There is no
assurance that any actual distributions will be made since all dividends
received may be used to pay expenses. In addition, excess amounts from the
Capital Account of a trust, if any, will be distributed at least annually to the
unitholders then of record. Proceeds received from the disposition of any of the
securities after a record date and prior to the following distribution date will
be held in the Capital Account and not distributed until the next distribution
date applicable to the Capital Account. The trustee shall be required to make a
distribution from the Capital Account if the cash balance on deposit therein
available for distribution shall be sufficient to distribute at least $1.00 per
100 units.
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The trustee is not required to pay interest on funds held in the Capital or
Income Accounts (but may itself earn interest thereon and therefore benefits
from the use of such funds). The trustee is authorized to reinvest any funds
held in the Capital or Income Accounts, pending distribution, in U.S. Treasury
obligations which mature on or before the next applicable distribution date. Any
obligations so acquired must be held until they mature and proceeds therefrom
may not be reinvested.
The distribution to the unitholders as of each record date will be made on
the following distribution date or shortly thereafter and shall consist of an
amount substantially equal to such portion of the unitholders' pro rata share of
the dividend distributions then held in the Income Account after deducting
estimated expenses. Because dividends are not received by a trust at a constant
rate throughout the year, such distributions to unitholders are expected to
fluctuate. Persons who purchase units will commence receiving distributions only
after such person becomes a record owner. A person will become the owner of
units, and thereby a unitholder of record, on the date of settlement provided
payment has been received. Notification to the trustee of the transfer of units
is the responsibility of the purchaser, but in the normal course of business
such notice is provided by the selling broker-dealer.
The trustee will periodically deduct from the Income Account of a trust and,
to the extent funds are not sufficient therein, from the Capital Account of a
trust amounts necessary to pay the expenses of a trust. The trustee also may
withdraw from said accounts such amounts, if any, as it deems necessary to
establish a reserve for any governmental charges payable out of a trust. Amounts
so withdrawn shall not be considered a part of a trust's assets until such time
as the trustee shall return all or any part of such amounts to the appropriate
accounts. In addition, the trustee may withdraw from the Income and Capital
Accounts of a trust such amounts as may be necessary to cover redemptions of
units.
DISTRIBUTION REINVESTMENT. Unitholders may elect to have distributions of
capital (including capital gains, if any) or dividends or both automatically
invested into additional units of their trust without a sales fee.
Your trust will pay any deferred sales fee per unit regardless of any sales
fee discounts. However, if you elect to have distributions on your units
reinvested into additional units of your trust, you will be credited the amount
of any remaining deferred sales charge on such additional units at the time of
reinvestment.
Unitholders who are receiving distributions in cash may elect to participate
in distribution reinvestment by filing with the Program Agent an election to
have such distributions reinvested without charge. Such election must be
received by the Program Agent at least ten days prior to the record date
applicable to any distribution in order to be in effect for such record date.
Any such election shall remain in effect until a subsequent notice is received
by the Program Agent.
The Program Agent is The Bank of New York. All inquiries concerning
participating in distribution reinvestment should be directed to The Bank of New
York at its Unit Investment Trust Division office.
STATEMENTS TO UNITHOLDERS. With each distribution, the trustee will furnish
to each unitholder a statement of the amount of income and the amount of other
receipts, if any, which are being distributed, expressed in each case as a
dollar amount per unit.
The accounts of a trust are required to be audited annually, at the related
trust's expense, by independent public accountants designated by the sponsor,
unless the sponsor determines that such an audit would not be in the best
interest of the unitholders of the trust. The accountants' report will be
furnished by the trustee to any unitholder upon written request. Within a
reasonable period of time after the end of each calendar year, the trustee shall
furnish to each
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person who at any time during the calendar year was a unitholder of a trust a
statement, covering the calendar year, generally setting forth for the trust:
(A) As to the Income Account:
(1) Income received;
(2) Deductions for applicable taxes and for fees and expenses of the trust
and for redemptions of units, if any; and
(3) The balance remaining after such distributions and deductions,
expressed in each case both as a total dollar amount and as a dollar
amount representing the pro rata share of each unit outstanding on the
last business day of such calendar year; and
(B) As to the Capital Account:
(1) The dates of disposition of any securities and the net proceeds
received therefrom;
(2) Deductions for payment of applicable taxes and fees and expenses of
the trust held for distribution to unitholders of record as of a date
prior to the determination; and
(3) The balance remaining after such distributions and deductions
expressed both as a total dollar amount and as a dollar amount
representing the pro rata share of each unit outstanding on the last
business day of such calendar year; and
(C) The following information:
(1) A list of the securities as of the last business day of such calendar
year;
(2) The number of units outstanding on the last business day of such
calendar year;
(3) The redemption price based on the last evaluation made during such
calendar year;
(4) The amount actually distributed during such calendar year from the
Income and Capital Accounts separately stated, expressed both as total
dollar amounts and as dollar amounts per unit outstanding on the
record dates for each such distribution.
RIGHTS OF UNITHOLDERS. A unitholder may at any time tender units to the
trustee for redemption. The death or incapacity of any unitholder will not
operate to terminate a trust nor entitle legal representatives or heirs to claim
an accounting or to bring any action or proceeding in any court for partition or
winding up of a trust. No unitholder shall have the right to control the
operation and management of a trust in any manner, except to vote with respect
to the amendment of the trust agreement or termination of a trust.
AMENDMENT AND TERMINATION. The trust agreement may be amended by the trustee
and the sponsor without the consent of any of the unitholders: (1) to cure any
ambiguity or to correct or supplement any provision which may be defective or
inconsistent; (2) to change any provision thereof as may be required by the
Securities and Exchange Commission or any successor governmental agency; or
(3) to make such provisions as shall not adversely affect the interests of the
unitholders. The trust agreement with respect to any trust may also be amended
in any respect by the sponsor and the trustee, or any of the provisions thereof
may be waived, with the consent of the holders of units representing 66 2/3% of
the units then outstanding of the trust, provided that no such amendment or
waiver will reduce the interest of any unitholder thereof without the consent of
such unitholder or reduce the percentage of units required
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to consent to any such amendment or waiver without the consent of all
unitholders of the trust. In no event shall the trust agreement be amended to
increase the number of units of a trust issuable thereunder or to permit the
acquisition of any securities in addition to or in substitution for those
initially deposited in the trust, except in accordance with the provisions of
the trust agreement. The trustee shall promptly notify unitholders of the
substance of any such amendment.
The trust agreement provides that a trust shall terminate upon the
liquidation, redemption or other disposition of the last of the securities held
in the trust but in no event is it to continue beyond the mandatory termination
date set forth in Part A of the prospectus. If the value of a trust shall be
less than the applicable minimum value stated in the prospectus (generally 20%
of the total value of securities deposited in the trust during the initial
offering period), the trustee may, in its discretion, and shall, when so
directed by the sponsor, terminate the trust. A trust may be terminated at any
time by the holders of units representing 66 2/3% of the units thereof then
outstanding. In addition, the sponsor may terminate a trust if it is based on a
security index and the index is no longer maintained.
Beginning nine business days prior to, but no later than, the mandatory
termination date described in the prospectus, the trustee may begin to sell all
of the remaining underlying securities on behalf of unitholders in connection
with the termination of the trust. The sponsor may assist the trustee in these
sales and receive compensation to the extent permitted by applicable law. The
sale proceeds will be net of any incidental expenses involved in the sales.
The trustee will attempt to sell the securities as quickly as it can during
the termination proceedings without in its judgment materially adversely
affecting the market price of the securities, but it is expected that all of the
securities will in any event be disposed of within a reasonable time after a
trust's termination. The sponsor does not anticipate that the period will be
longer than one month, and it could be as short as one day, depending on the
liquidity of the securities being sold. The liquidity of any security depends on
the daily trading volume of the security and the amount that the sponsor has
available for sale on any particular day. Of course, no assurances can be given
that the market value of the securities will not be adversely affected during
the termination proceedings.
Approximately thirty days prior to termination of certain trusts, the
trustee will notify unitholders of the termination and provide a form allowing
qualifying unitholders to elect an in-kind distribution (a "DISTRIBUTION IN
KIND"). A unitholder who owns the minimum number of units shown in Part A of the
prospectus may request a Distribution In Kind from the trustee instead of cash.
The trustee will make a Distribution In Kind through the distribution of each of
the securities of the trust in book entry form to the account of the
unitholder's bank or broker-dealer at Depository Trust Company. The unitholder
will be entitled to receive whole shares of each of the securities comprising
the portfolio of a trust and cash from the Capital Account equal to the
fractional shares to which the unitholder is entitled. The trustee may adjust
the number of shares of any security included in a unitholder's Distribution In
Kind to facilitate the distribution of whole shares. The sponsor may terminate
the Distribution In Kind option at any time upon notice to the unitholders.
Special federal income tax consequences will result if a unitholder requests a
Distribution In Kind. Unitholders who request a Distribution In Kind will be
subject to any 12b-1 Fees applicable to the underlying securities.
Within a reasonable period after termination, the trustee will sell any
securities remaining in a trust and, after paying all expenses and charges
incurred by the trust, will distribute to unitholders thereof (upon surrender
for cancellation of certificates for units, if issued) their pro rata share of
the balances remaining in the Income and Capital Accounts of the trust.
The sponsor currently intends, but is not obligated, to offer for sale units
of a subsequent series of certain trusts. If the sponsor does offer such units
for sale, unitholders may be given the opportunity to purchase such units at a
public offering price which includes a reduced sales fee. There is, however, no
assurance that units of any new series of a trust will be offered for sale at
that time, or if offered, that there will be sufficient units available for sale
to meet the requests of any or all unitholders.
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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, 20th Fl., New York, New York 10286,
telephone 1-800-701-8178. 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, whose duties are ministerial in nature, has not participated in
selecting the portfolio of any trust. In accordance with the trust agreement,
the trustee shall keep records of all transactions at its office. Such records
shall include the name and address of, and the number of units held by, every
unitholder of a trust. Such books and records shall be open to inspection by any
unitholder at all reasonable times during usual business hours. The trustee
shall make such annual or other reports as may from time to time be required
under any applicable state or federal statute, rule or regulation. The trustee
shall keep a certified copy or duplicate original of the trust agreement on file
in its office available for inspection at all reasonable times during usual
business hours by any unitholder, together with a current list of the securities
held in each trust. Pursuant to the trust agreement, the trustee may employ one
or more agents for the purpose of custody and safeguarding of securities
comprising a trust.
Under the trust agreement, the trustee or any successor trustee may resign
and be discharged of a trust created by the trust agreement by executing an
instrument in writing and filing the same with the sponsor. The trustee or
successor trustee must mail a copy of the notice of resignation to all
unitholders then of record, not less than sixty days before the date specified
in such notice when such resignation is to take effect. The sponsor upon
receiving notice of such resignation is obligated to appoint a successor trustee
promptly. If, upon such resignation, no successor trustee has been appointed and
has accepted the appointment within thirty days after notification, the retiring
trustee may apply to a court of competent jurisdiction for the appointment of a
successor. The sponsor may at any time remove the trustee, with or without
cause, and appoint a successor trustee as provided in the trust agreement.
Notice of such removal and appointment shall be mailed to each unitholder by the
sponsor. Upon execution of a written acceptance of such appointment by such
successor trustee, all the rights, powers, duties and obligations of the
original trustee shall vest in the successor. The trustee must be a corporation
organized under the laws of the United States, or any state thereof, be
authorized under such laws to exercise trust powers and have at all times an
aggregate capital, surplus and undivided profits of not less than $5,000,000.
THE SPONSOR. Claymore Securities, Inc. specializes in the creation,
development and distribution of investment solutions for advisors and their
valued clients. Claymore Securities, Inc., the sponsor, is an investment banking
firm created as Ranson & Associates, Inc. in 1995 and is the successor sponsor
to unit investment trusts formerly sponsored by EVEREN Unit Investment Trusts, a
service of EVEREN Securities, Inc. Claymore Securities, Inc. is also the sponsor
and successor sponsor of Series of Ranson Unit Investment Trusts and The Kansas
Tax-Exempt Trust and Multi-State Series of The Ranson Municipal Trust. On
October 29, 2001, Ranson & Associates, Inc. was acquired by Claymore Group LLC.
The sale to Claymore Group LLC was financed by a loan from The Bank of New York,
the trustee. In November 2001, the sponsor changed its name from Ranson &
Associates, Inc. to Claymore Securities, Inc. Claymore Securities, Inc. has been
active in public and corporate finance and has sold bonds and unit investment
trusts and maintained secondary market activities relating thereto. At present,
Claymore Securities, Inc. which is a member of the National Association of
Securities Dealers, Inc., is the sponsor to each of the above-named unit
investment trusts. The sponsor's offices are located at 210 North Hale Street,
Wheaton, Illinois 60187 and at 620 West Germantown Pike, Suite 440, Plymouth
Meeting, Pennsylvania 19462.
If at any time the sponsor shall fail to perform any of its duties under the
trust agreement or shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or shall have its affairs taken over by public
authorities, then the trustee may (a) appoint a successor sponsor at rates of
compensation deemed by the trustee to be reasonable and not exceeding such
reasonable amounts as may be prescribed by the Securities and Exchange
Commission, or (b) terminate the trust agreement and liquidate any trust as
provided therein, or (c) continue to act as trustee without terminating the
trust agreement.
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THE SUPERVISOR AND THE EVALUATOR. Claymore Securities, Inc., the sponsor,
also serves as evaluator and supervisor. The evaluator and supervisor may resign
or be removed by the trustee in which event the trustee is to use its best
efforts to appoint a satisfactory successor. Such resignation or removal shall
become effective upon acceptance of appointment by the successor evaluator. If
upon resignation of the evaluator no successor has accepted appointment within
thirty days after notice of resignation, the evaluator may apply to a court of
competent jurisdiction for the appointment of a successor. Notice of such
registration or removal and appointment shall be mailed by the trustee to each
unitholder.
LIMITATIONS ON LIABILITY. The sponsor is liable for the performance of its
obligations arising from its responsibilities under the trust agreement, but
will be under no liability to the unitholders for taking any action or
refraining from any action in good faith pursuant to the trust agreement or for
errors in judgment, except in cases of its own gross negligence, bad faith or
willful misconduct or its reckless disregard for its duties thereunder. The
sponsor shall not be liable or responsible in any way for depreciation or loss
incurred by reason of the sale of any securities.
The trust agreement provides that the trustee shall be under no liability
for any action taken in good faith in reliance upon prima facie properly
executed documents or for the disposition of moneys, securities or certificates
except by reason of its own gross negligence, bad faith or willful misconduct,
or its reckless disregard for its duties under the trust agreement, nor shall
the trustee be liable or responsible in any way for depreciation or loss
incurred by reason of the sale by the trustee of any securities. In the event
that the sponsor shall fail to act, the trustee may act and shall not be liable
for any such action taken by it in good faith. The trustee shall not be
personally liable for any taxes or other governmental charges imposed upon or in
respect of the securities or upon the interest thereof. In addition, the trust
agreement contains other customary provisions limiting the liability of the
trustee.
The trustee and unitholders may rely on any evaluation furnished by the
evaluator and shall have no responsibility for the accuracy thereof. The trust
agreement provides that the determinations made by the evaluator shall be made
in good faith upon the basis of the best information available to it, provided,
however, that the evaluator shall be under no liability to the trustee or
unitholders for errors in judgment, but shall be liable for its gross
negligence, bad faith or willful misconduct or its reckless disregard for its
obligations under the trust agreement.
EXPENSES OF THE TRUST
The sponsor does not charge trusts an annual advisory fee. The sponsor will
receive a portion of the sale commissions paid in connection with the purchase
of units and will share in profits, if any, related to the deposit of securities
in the trust. The sponsor and/or its affiliates do, also, receive an annual fee
as set forth in Part A of the prospectus for maintaining surveillance over the
portfolio and for performing certain administrative services for the Trust (the
"SPONSOR'S SUPERVISORY FEE"). In providing such supervisory services, the
sponsor may purchase research from a variety of sources, which may include
dealers of the trusts. If so provided in Part A of the prospectus, the sponsor
may also receive an annual fee for providing bookkeeping and administrative
services for a trust (the "BOOKKEEPING AND ADMINISTRATIVE FEE"). Such services
may include, but are not limited to, the preparation of various materials for
unitholders and providing account information to the unitholders. If so provided
in Part A of the prospectus, the evaluator may also receive an annual fee for
performing evaluation services for the trusts (the "EVALUATOR'S FEE"). In
addition, if so provided in Part A of the prospectus, a trust may be charged an
annual licensing fee to cover licenses for the use of service marks, trademarks,
trade names and intellectual property rights and/or for the use of databases and
research. The trust will bear all operating expenses. Estimated annual trust
operating expenses are as set forth in Part A of the prospectus; if actual
expenses are higher than the estimate, the excess will be borne by the trust.
The estimated expenses include listing fees but do not include the brokerage
commissions and other transactional fees payable by the trust in purchasing and
selling securities.
The trustee receives for its services that fee set forth in Part A of the
prospectus. The trustee's fee which is calculated monthly, is based on the
largest number of units of a trust outstanding at any time during the period
subsequent to the inception date. The Sponsor's Supervisory Fee, the Bookkeeping
and Administrative Fee and the
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Evaluator's Fee are calculated monthly and are based on the largest number of
units outstanding at any time during the period for which such compensation is
being computed. The trustee benefits to the extent there are funds for future
distributions, payment of expenses and redemptions in the Capital and Income
Accounts since these Accounts are non-interest bearing and the amounts earned by
the trustee are retained by the trustee. Part of the trustee's compensation for
its services to a trust is expected to result from the use of these funds. In
addition, the Sponsor's Supervisory Fee, Bookkeeping and Administrative Fee,
Evaluator's Fee and the Trustee's Fee may be adjusted in accordance with the
cumulative percentage increase of the United States Department of Labor's
Consumer Price Index entitled "All Services Less Rent" since the establishment
of the trust. In addition, with respect to any fees payable to the sponsor or an
affiliate of the sponsor for providing bookkeeping and other administrative
services, supervisory services and evaluation services, such individual fees may
exceed the actual costs of providing such services for a trust, but at no time
will the total amount received for such services, in the aggregate, rendered to
all unit investment trusts of which Claymore is the sponsor in any calendar year
exceed the actual cost to the sponsor or its affiliates of supplying such
services, in the aggregate, in such year.
The trust will also will pay a fee to the sponsor for creating and
developing the trust, including determining the trust objective, policies,
composition and size, selecting service providers and information services, and
for providing other similar administrative and ministerial functions. Your trust
pays this "creation and development fee" as a fixed dollar amount at the close
of the initial offering period. The sponsor does not use the fee to pay
distribution expenses or as compensation for sales efforts.
The following additional charges are or may be incurred by the trust:
(a) fees for the trustee's extraordinary services; (b) expenses of the trustee
(including legal and auditing expenses, but not including any fees and expenses
charged by an agent for custody and safeguarding of securities) and of counsel,
if any; (c) various governmental charges; (d) expenses and costs of any action
taken by the trustee to protect the trust or the rights and interests of the
unitholders; (e) indemnification of the trustee for any loss, liability or
expense incurred by it in the administration of the trust not resulting from
gross negligence, bad faith or willful misconduct on its part;
(f) indemnification of the sponsor for any loss, liability or expense incurred
in acting in that capacity without gross negligence, bad faith or willful
malfeasance or its reckless disregard for its obligations under the trust
agreement; (g) any offering costs incurred after the end of the initial offering
period; and (h) expenditures incurred in contacting unitholders upon termination
of the trust. The fees and expenses set forth herein are payable out of a trust
and, when owing to the trustee, are secured by a lien on the trust. The sponsor
cannot provide any assurance that dividends will be sufficient to meet any or
all expenses of a trust. If the balances in the Income and Capital Accounts are
insufficient to provide for amounts payable by the trust, the trustee has the
power to sell securities to pay such amounts. These sales may result in capital
gains or losses to unitholders. It is expected that the income stream produced
by dividend payments may be insufficient to meet the expenses of a trust and,
accordingly, it is expected that securities will be sold to pay all of the fees
and expenses of the trust.
The trust shall also bear the expenses associated with updating the trust's
registration statement and maintaining registration or qualification of the
units and/or a trust under federal or state securities laws subsequent to
initial registration. Such expenses shall include legal fees, accounting fees,
typesetting fees, electronic filing expenses and regulatory filing fees. The
expenses associated with updating registration statements have been historically
paid by a unit investment trust's sponsor.
PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATION
When a trust sells securities, the composition and diversity of the
securities in the trust may be altered. In order to obtain the best price for a
trust, it may be necessary for the supervisor to specify minimum amounts (such
as 100 shares) in which blocks of securities are to be sold. In effecting
purchases and sales of a trust's portfolio securities, the sponsor may direct
that orders be placed with and brokerage commissions be paid to brokers,
including brokers which may be affiliated with the trust, the sponsor or dealers
participating in the offering of units. In addition, in selecting
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among firms to handle a particular transaction, the sponsor may take into
account whether the firm has sold or is selling products which it sponsors.
PURCHASE, REDEMPTION AND PRICING OF UNITS
PUBLIC OFFERING PRICE. Units of a trust are offered at the public offering
price (which is based on the aggregate underlying value of the securities in the
trust and includes the initial sales fee plus a pro rata share of any
accumulated amounts in the accounts of the trust). The initial sales fee is
equal to the difference between the maximum sales fee and the sum of the
remaining deferred sales fee and the creation and development fee ("C&D FEE").
The maximum sales fee is set forth in Part A of the prospectus. The deferred
sales fee and the C&D Fee will be collected as described in this prospectus.
Units purchased subsequent to the initial deferred sales fee payment will be
subject to the initial sales fee, the remaining deferred sales fee payments and
the C&D Fee. Units sold or redeemed prior to such time as the entire applicable
deferred sales fee has been collected will be assessed the remaining deferred
sales fee at the time of such sale or redemption. During the initial offering
period, a portion of the public offering price includes an amount of securities
to pay for all or a portion of the costs incurred in establishing a trust
("ORGANIZATION COSTS"). These organization costs include the cost of preparing
the registration statement, the trust indenture and other closing documents,
registering units with the Securities and Exchange Commission and states, the
initial audit of the trust portfolio, legal fees and the initial fees and
expenses of the trustee. These costs will be deducted from a trust as of the end
of the initial offering period or after six months, at the discretion of the
sponsor. As indicated above, the initial public offering price of the units was
established by dividing the aggregate underlying value of the securities by the
number of units outstanding. Such price determination as of the opening of
business on the date a trust was created was made on the basis of an evaluation
of the securities in the trust prepared by the evaluator. After the opening of
business on this date, the evaluator will appraise or cause to be appraised
daily the value of the underlying securities as of the close of the New York
Stock Exchange on days the New York Stock Exchange is open and will adjust the
public offering price of the units commensurate with such valuation. Such public
offering price will be effective for all orders properly received at or prior to
the close of trading on the New York Stock Exchange on each such day. Orders
received by the trustee, sponsor or any dealer for purchases, sales or
redemptions after that time, or on a day when the New York Stock Exchange is
closed, will be held until the next determination of price.
The value of the securities is determined on each business day by the
evaluator based on the closing sale prices on a national securities exchange or
the Nasdaq National Market System or by taking into account the same factors
referred to under "Computation of Redemption Price."
PUBLIC DISTRIBUTION OF UNITS. During the initial offering period, units of a
trust will be distributed to the public at the public offering price thereof.
Upon the completion of the initial offering, units which remain unsold or which
may be acquired in the secondary market may be offered at the public offering
price determined in the manner provided above.
The sponsor intends to qualify units of a trust for sale in a number of
states. Units will be sold through dealers who are members of the National
Association of Securities Dealers, Inc. and through others. Broker-dealers and
others will be allowed a concession or agency commission in connection with the
distribution of units during the initial offering period as set forth in the
prospectus.
Certain commercial banks may be making units of a trust available to their
customers on an agency basis. Furthermore, as a result of certain legislative
changes effective November 1999, banks are no longer prohibited from certain
affiliations with securities firms. This new legislation grants banks new
authority to conduct certain authorized activity, such as sales of Units,
through financial subsidiaries. A portion of the sales charge discussed above is
retained by or remitted to the banks or their financial subsidiaries for these
agency and brokerage transactions. The sponsor reserves the right to change the
concessions or agency commissions set forth in the prospectus from time to time.
In addition to such concessions or agency commissions, the sponsor may, from
time to time, pay or allow additional concessions or agency commissions, in the
form of cash or other compensation, to dealers employing registered
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representatives who sell, during a specified time period, a minimum dollar
amount of units of unit investment trusts underwritten by the sponsor. At
various times the sponsor may implement programs under which the sales force of
a broker or dealer may be eligible to win nominal awards for certain sales
efforts, or under which the sponsor will reallow to any such broker or dealer
that sponsors sales contests or recognition programs conforming to criteria
established by the sponsor, or participates in sales programs sponsored by the
sponsor, an amount not exceeding the total applicable sales charges on the sales
generated by such person at the public offering price during such programs.
Also, the sponsor in its discretion may from time to time pursuant to objective
criteria established by the sponsor pay fees to qualifying brokers or dealers
for certain services or activities which are primarily intended to result in
sales of units of a trust. Such payments are made by the sponsor out of its own
assets, and not out of the assets of any trust. These programs will not change
the price unitholders pay for their units or the amount that a trust will
receive from the units sold. The difference between the discount and the sales
charge will be retained by the sponsor.
The sponsor reserves the right to reject, in whole or in part, any order for
the purchase of units.
SPONSOR PROFITS. The sponsor will receive gross sales fees equal to the
percentage of the public offering price of the units of a trust described in the
prospectus. In addition, the sponsor may realize a profit (or sustain a loss) as
of the date a trust is created resulting from the difference between the
purchase prices of the securities to the sponsor and the cost of such securities
to the trust. Thereafter, on subsequent deposits the sponsor may realize profits
or sustain losses from such deposits. The sponsor may realize additional profits
or losses during the initial offering period on unsold units as a result of
changes in the daily market value of the securities in the trust.
MARKET FOR UNITS. After the initial offering period, the sponsor may
maintain a market for units of a trust offered hereby and continuously offer to
purchase said units at prices, determined by the evaluator, based on the value
of the underlying securities. Unitholders who wish to dispose of their units
should inquire of their broker as to current market prices in order to determine
whether there is in existence any price in excess of the redemption price and,
if so, the amount thereof. Unitholders who sell or redeem units prior to such
time as the entire deferred sales fee on such units has been collected will be
assessed the amount of the remaining deferred sales fee at the time of such sale
or redemption. The offering price of any units resold by the sponsor will be in
accord with that described in the currently effective prospectus describing such
units. Any profit or loss resulting from the resale of such units will belong to
the sponsor. If the sponsor decides to maintain a secondary market, it may
suspend or discontinue purchases of units of the trust if the supply of units
exceeds demand, or for other business reasons.
REDEMPTION. A unitholder who does not dispose of units in the secondary
market described above may cause units to be redeemed by the trustee by making a
written request to the trustee at its Unit Investment Trust Division office in
the city of New York. Unitholders must sign the request, and such transfer
instrument, exactly as their names appear on the records of the trustee. If the
amount of the redemption is $500 or less and the proceeds are payable to the
unitholder(s) of record at the address of record, no signature guarantee is
necessary for redemptions by individual account owners (including joint owners).
Additional documentation may be requested, and a signature guarantee is always
required, from corporations, executors, administrators, trustees, guardians or
associations. The signatures must be guaranteed by a participant in the
Securities Transfer Agents Medallion Program ("STAMP") or such other signature
guaranty program in addition to, or in substitution for, STAMP, as may be
accepted by the trustee.
Redemption shall be made by the trustee no later than the third business day
following the day on which a tender for redemption is received (the "REDEMPTION
DATE") by payment of cash equivalent to the redemption price, determined as set
forth below under "Computation of Redemption Price," as of the close of the New
York Stock Exchange next following such tender, multiplied by the number of
units being redeemed. Any units redeemed shall be canceled and any undivided
fractional interest in the related trust extinguished. The price received upon
redemption might be more or less than the amount paid by the unitholder
depending on the value of the securities in the trust at the time of redemption.
Unitholders who sell or redeem units prior to such time as the entire deferred
sales fee on such units has been collected will be assessed the amount of the
remaining deferred sales fee at the time of such sale or redemption. Certain
broker-dealers may charge a transaction fee for processing redemption requests.
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Under regulations issued by the Internal Revenue Service, the trustee is
required to withhold a specified percentage of the principal amount of a unit
redemption if the trustee has not been furnished the redeeming unitholder's tax
identification number in the manner required by such regulations. Any amount so
withheld is transmitted to the Internal Revenue Service and may be recovered by
the unitholder only when filing a tax return. Under normal circumstances the
trustee obtains the unitholder's tax identification number from the selling
broker. However, any time a unitholder elects to tender units for redemption,
such unitholder should make sure that the trustee has been provided a certified
tax identification number in order to avoid this possible "back-up withholding."
In the event the trustee has not been previously provided such number, one must
be provided at the time redemption is requested. Any amounts paid on redemption
representing unpaid dividends shall be withdrawn from the Income Account of a
trust to the extent that funds are available for such purpose. All other amounts
paid on redemption shall be withdrawn from the Capital Account for a trust.
Unitholders tendering units for redemption may request a Distribution In
Kind from the trustee in lieu of cash redemption. A unitholder may request a
Distribution In Kind of an amount and value of securities per unit equal to the
redemption price per unit as determined as of the evaluation time next following
the tender, provided that the tendering unitholder is (1) entitled to receive at
least $25,000 of proceeds as part of his or her distribution or if he paid at
least $25,000 to acquire the units being tendered and (2) the unitholder has
elected to redeem at least thirty days prior to the termination of the trust. If
the unitholder meets these requirements, a Distribution In Kind will be made by
the trustee through the distribution of each of the securities of the trust in
book entry form to the account of the unitholder's bank or broker-dealer at
Depository Trust Company. The tendering unitholder shall be entitled to receive
whole shares of each of the securities comprising the portfolio of the trust and
cash from the Capital Account equal to the fractional shares to which the
tendering unitholder is entitled. The trustee shall make any adjustments
necessary to reflect differences between the redemption price of the units and
the value of the securities distributed in kind as of the date of tender. If
funds in the Capital Account are insufficient to cover the required cash
distribution to the tendering unitholder, the trustee may sell securities. The
in-kind redemption option may be terminated by the sponsor at any time. The
trustee is empowered to sell securities in order to make funds available for the
redemption of units. To the extent that securities are sold or redeemed in kind,
the size of a trust will be, and the diversity of a trust may be, reduced but
each remaining unit will continue to represent approximately the same
proportional interest in each security. Sales may be required at a time when
securities would not otherwise be sold and may result in lower prices than might
otherwise be realized. The price received upon redemption may be more or less
than the amount paid by the unitholder depending on the value of the securities
in the portfolio at the time of redemption.
The right of redemption may be suspended and payment postponed for more than
three business days following the day on which tender for redemption is made
(1) for any period during which the New York Stock Exchange is closed, other
than customary weekend and holiday closings, or during which (as determined by
the Securities and Exchange Commission) trading on the New York Stock Exchange
is restricted; (2) for any period during which an emergency exists as a result
of which disposal by the trustee of securities is not reasonably practicable or
it is not reasonably practicable to fairly determine the value of the underlying
securities in accordance with the trust agreement; or (3) for such other period
as the Securities and Exchange Commission may by order permit. The trustee is
not liable to any person in any way for any loss or damage which may result from
any such suspension or postponement.
COMPUTATION OF REDEMPTION PRICE. The redemption price per unit (as well as
the secondary market public offering price) will generally be determined on the
basis of the last sale price of the securities in a trust. The redemption price
per unit is the pro rata share of each unit in a trust determined generally on
the basis of (i) the cash on hand in the trust or moneys in the process of being
collected and (ii) the value of the securities in the trust less (a) amounts
representing taxes or other governmental charges payable out of the trust,
(b) any amount owing to the trustee for its advances and (c) the accrued
expenses or remaining deferred sales fees of the trust. During the initial
offering period, the redemption price and the secondary market repurchase price
will also include estimated organizational costs. The evaluator may determine
the value of the securities in the trust in the following manner: if the
securities are listed on a national securities exchange or foreign securities
exchange or the Nasdaq National Market System, such evaluation shall generally
be based on the last available sale price on or immediately prior to the
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Evaluation Time on the exchange or the Nasdaq National Market System which is
the principal market therefor, which shall be deemed to be the New York Stock
Exchange if the Securities are listed thereon (unless the evaluator deems such
price inappropriate as a basis for evaluation) or, if there is no such available
sale price on such exchange, at the last available bid prices (offer prices for
primary market purchases) of the securities. Securities not listed on the New
York Stock Exchange but principally traded on the Nasdaq National Market System
will be valued at Nasdaq's official close price. If the securities are not so
listed or, if so listed, the principal market therefor is other than on such
exchange or there is no such available sale price on such exchange, such
evaluation shall generally be based on the following methods or any combination
thereof whichever the evaluator deems appropriate: (i) on the basis of the
current bid price (offer prices for primary market purchases) for comparable
securities (unless the evaluator deems such price inappropriate as a basis for
evaluation), (ii) by determining the valuation of the Securities on the bid side
(offer side for primary market purchases) of the market by appraisal or
(iii) by any combination of the above. If the trust holds securities denominated
in a currency other than U.S. dollars, the evaluation of such security shall be
converted to U.S. dollars based on current bid side (offer side for primary
market purchases) exchange rates (unless the evaluator deems such prices
inappropriate as a basis for valuation).
RETIREMENT PLANS. A trust may be well suited for purchase by Individual
Retirement Accounts, Keogh Plans, pension funds and other qualified retirement
plans. Generally, capital gains and income received under each of the foregoing
plans are deferred from federal taxation. All distributions from such plans are
generally treated as ordinary income but may, in some cases, be eligible for
special income averaging or tax deferred rollover treatment. Investors
considering participation in any such plan should review specific tax laws
related thereto and should consult their attorneys or tax advisers with respect
to the establishment and maintenance of any such plan. Such plans are offered by
brokerage firms and other financial institutions. The trust will lower the
minimum investment requirement for IRA accounts to $250. Fees and charges with
respect to such plans may vary.
OWNERSHIP OF UNITS. Ownership of units will not be evidenced by
certificates. All evidence of ownership of units will be recorded in book entry
form either at Depository Trust Company("DTC") through an investor's brokers'
account or through registration of the units on the books of the trustee. Units
held through DTC will be registered in the nominee name of Cede & Co. Individual
purchases of beneficial ownership interest in the trust will be made in book
entry form through DTC or the trustee. Ownership and transfer of units will be
evidenced and accomplished by book entries made by DTC and its participants if
the units are evidenced at DTC, or otherwise will be evidenced and accomplished
by book entries made by the trustee. DTC will record ownership and transfer of
the units among DTC participants and forward all notices and credit all payments
received in respect of the units held by the DTC participants. Beneficial owners
of units will receive written confirmation of their purchases and sale from the
broker dealer or bank from whom their purchase was made. Units are transferable
by making a written request properly accompanied by a written instrument or
instruments of transfer which should be sent registered or certified mail for
the protection of the unitholder. Unitholders must sign such written request
exactly as their names appear on the records of the trust. The signatures must
be guaranteed by a participant in the STAMP or such other signature guaranty
program in addition to, or in substitution for, STAMP, as may be acceptable by
the trustee.
Units may be purchased in denominations of one unit or any multiple thereof,
subject to the minimum investment requirement. Fractions of units, if any, will
be computed to three decimal places.
TAXES
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
these summaries do not describe all of the tax consequences to all taxpayers.
For example, these summaries generally do 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
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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 AND DISTRIBUTIONS. 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 your 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. This is true even if you elect to have your distributions automatically
reinvested into additional Units. In addition, the income from a 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 your 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 each Trust Asset by apportioning the cost of your Units, generally including
sales charges, among each 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. For example, there are special transition rules
provided with respect to gain properly taken into account for the portion of the
taxable year before May 6, 2003.
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.
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. However, it is important to note that pursuant to the Tax Act, certain
ordinary income dividends received by the Trust (and distributed to the
Unitholders) from a regulated investment company may qualify to be taxed at the
same new rates that apply to net capital gain (as discussed above), provided
certain holding period requirements are satisfied and provided the dividends are
attributable to qualifying dividends received by the RIC itself. These special
rules relating to the taxation of ordinary income dividends from regulated
investment companies generally apply to taxable years beginning after
December 31, 2002 and beginning before January 1, 2009. Regulated investment
companies will provide notice to their shareholders of the amount of any
distribution which may be taken into account as a dividend which is eligible for
the new capital gains tax rates.
If you hold a Unit for six months or less or if a Trust holds a Security for
six months or less, any loss incurred by you related to the disposition of such
Security will be treated as long-term capital loss to the extent of any
long-term
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capital gain distributions received (or deemed to have been 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 a 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 a Trust. However,
if you also receive cash in exchange for a Security or a fractional share of a
Security held by a Trust, you will generally recognize gain or loss based on the
difference between the amount of cash you receive and your tax basis in such
Security or fractional share.
LIMITATIONS ON THE DEDUCTIBILITY OF TRUST EXPENSES. Generally, for federal
income tax purposes, you must take into account your full pro rata share of a
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.
FOREIGN, STATE AND LOCAL TAXES. Under certain circumstances, a RIC may elect
to pass through to its shareholders certain foreign taxes paid by the RIC. If a
RIC makes this election with respect to Securities, you must include in your
income for federal income tax purposes your portion of such taxes, and you may
be entitled to a credit or deduction for such taxes.
In the opinion of Emmet, Marvin & Martin, LLP, Special Counsel to the trust
for New York tax matters, under the existing income tax laws of the State of New
York, the trust is not an association taxable as a corporation and the income of
the trust will be treated as the income of the unitholders thereof.
EXPERTS
LEGAL MATTERS. Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois
60603, acts as counsel for the trust and has passed upon the legality of the
units.
INDEPENDENT AUDITORS. The statement of financial condition, including the
Trust Portfolio, appearing herein, has been audited by Grant Thornton LLP,
independent auditors, as set forth in their report thereon appearing elsewhere
herein, and is included in reliance on such report given on the authority of
such firm as experts in accounting and auditing.
PERFORMANCE INFORMATION
Information contained in the prospectus, as it currently exists or as
further updated, may also be included from time to time in other prospectuses or
in advertising material. Information on the performance of a trust strategy or
the actual performance of a trust may be included from time to time in other
prospectuses or advertising material and may reflect sales charges and expenses
of a trust. The performance of a trust may also be compared to the performance
of money managers as reported in SEI Fund Evaluation Survey or of mutual funds
as reported by Lipper Analytical Services Inc. (which calculates total return
using actual dividends on ex-dates accumulated for the quarter and reinvested at
quarter end), Money Magazine Fund Watch (which rates fund performance over a
specified time period
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after sales charge and assuming all dividends reinvested) or Wiesenberger
Investment Companies Service (which states fund performance annually on a total
return basis) or of the New York Stock Exchange Composite Index, the American
Stock Exchange Index (unmanaged indices of stocks traded on the New York and
American Stock Exchanges, respectively), the Dow Jones Industrial Average (an
index of 30 widely traded industrial common stocks) or the Standard & Poor's 500
Index (an unmanaged diversified index of 500 stocks) or similar measurement
standards during the same period of time.
DESCRIPTION OF RATINGS
STANDARD & POOR'S ISSUE CREDIT RATINGS
A Standard & Poor's issue credit rating is a current opinion of the
credit-worthiness of an obligor with respect to a specific financial obligation,
a specific class of financial obligations, or a specific financial program
(including ratings on medium term note programs and commercial paper programs).
It takes into consideration the creditworthiness of guarantors, insurers, or
other forms of credit enhancement on the obligation and takes into account the
currency in which the obligation is denominated. The issue credit rating is not
a recommendation to purchase, sell, or hold a financial obligation, inasmuch as
it does not comment as to market price or suitability for a particular investor.
Issue credit ratings are based on current information furnished by the obligors
or obtained by Standard & Poor's from other sources it considers reliable.
Standard & Poor's does not perform an audit in connection with any credit rating
and may, on occasion, rely on unaudited financial information. Credit ratings
may be changed, suspended, or withdrawn as a result of changes in, or
unavailability of, such information, or based on other circumstances.
LONG-TERM ISSUE CREDIT RATINGS
Issue credit ratings are based, in varying degrees, on the following
considerations:
- Likelihood of payment-capacity and willingness of the obligor to meet its
financial commitment on an obligation in accordance with the terms of the
obligation;
- Nature of and provisions of the obligation;
- Protection afforded by, and relative position of, the obligation in the
event of bankruptcy, reorganization, or other arrangement under the laws of
bankruptcy and other laws affecting creditors' rights.
The issue rating definitions are expressed in terms of default risk. As
such, they pertain to senior obligations of an entity. Junior obligations are
typically rated lower than senior obligations, to reflect the lower priority in
bankruptcy, as noted above. (Such differentiation applies when an entity has
both senior and subordinated obligations, secured and unsecured obligations, or
operating company and holding company obligations.) Accordingly, in the case of
junior debt, the rating may not conform exactly with the category definition.
<Table>
AAA An obligation rated "AAA" has the highest rating assigned by
Standard & Poor's. The obligor's capacity to meet its
financial commitment on the obligation is extremely strong.
AA An obligation rated "AA" differs from the highest rated
obligations only in small degree. The obligor's capacity to
meet its financial commitment on the obligation is very
strong.
A An obligation rated "A" is somewhat more susceptible to the
adverse effects of changes in circumstances and economic
conditions than obligations in higher rated categories.
However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.
</Table>
24
<Page>
<Table>
BBB An obligation rated "BBB" exhibits adequate protection
parameters. However, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity
of the obligor to meet its financial commitment on the
obligation. Obligations rated "BB", "B", "CCC", "CC", and
"C" are regarded as having significant speculative
characteristics. "BB" indicates the least degree of
speculation and "C" the highest. While such obligations will
likely have some quality and protective characteristics,
these may be outweighed by large uncertainties or major
exposures to adverse conditions.
BB An obligation rated "BB" is less vulnerable to nonpayment
than other speculative issues. However, it faces major
ongoing uncertainties or exposure to adverse business,
financial, or economic conditions which could lead to the
obligor's inadequate capacity to meet its financial
commitment on the obligation.
B An obligation rated "B" is more vulnerable to nonpayment
than obligations rated "BB", but the obligor currently has
the capacity to meet its financial commitment on the
obligation. Adverse business, financial, or economic
conditions will likely impair the obligor's capacity or
willingness to meet its financial commitment on the
obligation.
CCC An obligation rated "CCC" is currently vulnerable to
nonpayment, and is dependent upon favorable business,
financial, and economic conditions for the obligor to meet
its financial commitment on the obligation. In the event of
adverse business, financial, or economic conditions, the
obligor is not likely to have the capacity to meet its
financial commitment on the obligation.
CC An obligation rated "CC" is currently highly vulnerable to
nonpayment.
CA A subordinated debt or preferred stock obligation rated "C"
is CURRENTLY HIGHLY VULNERABLE to nonpayment. The "C" rating
may be used to cover a situation where a bankruptcy petition
has been filed or similar action taken, but payments on this
obligation are being continued. A "C" also will be assigned
to a preferred stock issue in arrears on dividends or
sinking fund payments, but that is currently paying.
D An obligation rated "D" is in payment default. The "D"
rating category is used when payments on an obligation are
not made on the date due even if the applicable grace period
has not expired, unless Standard & Poor's believes that
such payments will be made during such grace period. The "D"
rating also will be used upon the filing of a bankruptcy
petition or the taking of a similar action if payments on an
obligation are jeopardized.
</Table>
Plus (+) or minus (-) The ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
<Table>
r This symbol is attached to the ratings of instruments with
significant noncredit risks. It highlights risks to
principal or volatility of expected returns which are not
addressed in the credit rating.
N.R. This indicates that no rating has been requested, that there
is insufficient information on which to base a rating, or
that Standard & Poor's does not rate a particular obligation
as a matter of policy.
</Table>
MOODY'S RATINGS
<Table>
Aaa Bonds and preferred stock which are rated Aaa are judged to
be of the best quality. They carry the smallest degree of
investment risk and are generally referred to as "gilt
edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While
the various protective elements are likely to change, such
changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
</Table>
25
<Page>
<Table>
Aa Bonds and preferred stock which are rated Aa are judged to
be of high quality by all standards. Together with the Aaa
group they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa
securities or fluctuation of protective elements may be of
greater amplitude or there may be other elements present
which make the long-term risk appear somewhat larger than
the Aaa securities.
A Bonds and preferred stock which are rated A possess many
favorable investment attributes and are to be considered as
upper-medium-grade obligations. Factors giving security to
principal and interest are considered adequate, but elements
may be present which suggest a susceptibility to impairment
some time in the future.
Baa Bonds and preferred stock which are rated Baa are considered
as medium- grade obligations (i.e., they are neither highly
protected nor poorly secured). Interest payments and
principal security appear adequate for the present but
certain protective elements may be lacking or may be
characteristically unreliable over any great length of time.
Such bonds lack out standing investment characteristics and
in fact have speculative characteristics as well.
Ba Bonds and preferred stock which are rated Ba are judged to
have speculative elements; their future cannot be considered
as well-assured. Often the protection of interest and
principal payments may be very moderate, and thereby not
well safeguarded during both good and bad times over the
future. Uncertainty of position characterizes bonds in this
class.
B Bonds and preferred stock which are rated B generally lack
characteristics of the desirable investment. Assurance of
interest and principal payments or of maintenance of other
terms of the contract over any long period of time may be
small.
Caa Bonds and preferred stock which are rated Caa are of poor
standing. Such issues may be in default or there may be
present elements of danger with respect to principal or
interest.
Ca Bonds and preferred stock which are rated Ca represent
obligations which are speculative in a high degree. Such
issues are often in default or have other marked
shortcomings.
C Bonds and preferred stock which are rated C are the lowest
rated class of bonds, and issues so rated can be regarded as
having extremely poor prospects of ever attaining any real
investment standing.
</Table>
Note: Moody's applies numerical modifiers 1, 2, and 3 in each generic rating
classification from Aa through Caa. The modifier 1 indicates that the obligation
ranks in the higher end of its generic rating category; the modifier 2 indicates
a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of
that generic rating category.
26
<Page>
CLAYMORE SECURITIES DEFINED PORTFOLIOS
CLAYMORE CLOSED-END PORTFOLIO
PROSPECTUS-PART B
JULY 25, 2003
WHERE TO LEARN MORE
You can contact us for free information about this and other investments.
VISIT US ON THE INTERNET
http://www.claymoresecurities.com
BY E MAIL
invest@claymoresecurities.com
CALL CLAYMORE
(800) 345-7999
Pricing Line (888) 248-4954
CALL THE BANK OF NEW YORK
(800) 701-8178 (investors)
(800) 647-3383 (brokers)
ADDITIONAL INFORMATION
This prospectus does not contain all information filed with the Securities
and Exchange Commission. To obtain a copy of this information (a duplication fee
may be required):
<Table>
E MAIL: publicinfo@sec.gov
WRITE: Public Reference Section
Washington, D.C. 20549-0102
VISIT: http://www.sec.gov (EDGAR Database)
CALL: 1-202-942-8090 (only for information on the operation of the
Public Reference System)
</Table>
When units of the trust are no longer available, we may use this prospectus
as a preliminary prospectus for a future trust. In this case you should note
that:
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE WITH RESPECT TO FUTURE
TRUSTS AND MAY BE CHANGED. NO ONE MAY SELL UNITS OF A FUTURE TRUST UNTIL A
REGISTRATION STATEMENT IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND
IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL UNITS AND IS NOT
SOLICITING AN OFFER TO BUY UNITS IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
<Page>
Contents
Investment Summary
A CONCISE 2 Overview
DESCRIPTION 2 Investment Objective
OF ESSENTIAL 2 Principal Investment Strategy
INFORMATION 2 Security Selection
ABOUT THE 3 Principal Risks
PORTFOLIO 5 Who Should Invest
6 Essential Information
6 Fees and Expenses
7 Example
7 Estimated Annual Income Distributions
Understanding Your Investment
DETAILED 8 How to Buy Units
INFORMATION 11 How to Sell Your Units
TO HELP YOU 13 Distributions
UNDERSTAND 13 Investment Risks
YOUR 17 How the Trust Works
INVESTMENT 18 General Information
19 Expenses
20 Trust Portfolio
21 Report of Independent Auditors
22 Statement of Financial Condition
FOR THE TABLE OF CONTENTS OF PART B, SEE PART B OF THE PROSPECTUS.
Where to Learn More
YOU CAN CONTACT US FOR VISIT US ON THE INTERNET
FREE INFORMATION ABOUT http://www.claymoresecurities.com
THIS AND OTHER BY E-MAIL
INVESTMENTS. invest@claymoresecurities.com
CALL CLAYMORE (800) 345-7999
Pricing Line (888) 248-4954
CALL THE BANK OF NEW YORK
(800) 701-8178 (investors)
(800) 647-3383 (brokers)
Additional Information
This prospectus does not contain all information filed with the Securities
and Exchange Commission. To obtain or copy this information (a duplication
fee may be required):
E-MAIL: publicinfo@sec.gov
WRITE: Public Reference Section, Washington, D.C. 20549-0102
VISIT: http://www.sec.gov (EDGAR Database)
CALL: 1-202-942-8090 (only for information on
the operation of the Public Reference Section)
REFER TO:
CLAYMORE SECURITIES DEFINED PORTFOLIOS, SERIES 154
Securities Act file number: 333-106475
Investment Company Act file number: 811-03763
When units of the trust are no longer available, we may use this prospectus
as a preliminary prospectus for a future trust. In this case you should note
that:
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE WITH RESPECT TO FUTURE
TRUSTS AND MAY BE CHANGED. NO ONE MAY SELL UNITS OF A FUTURE TRUST UNTIL A
REGISTRATION STATEMENT IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
AND IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL UNITS AND IS NOT
SOLICITING AN OFFER TO BUY UNITS IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
Claymore Securities
Defined Portfolios
Series 154
Prospectus
Dated July 25, 2003
Closed-End
Floating Rate
Portfolio, Series 1
[CLAYMORE LOGO]
<Page>
CONTENTS OF REGISTRATION STATEMENT
A. Bonding Arrangements of Depositor:
The Depositor has obtained the following Securities Dealer Blanket
Bond for its officers, directors and employees:
<Table>
<Caption>
INSURER/POLICY NO. AMOUNT
National Union Fire Insurance
Company of Pittsburgh, $ 250,000
Pennsylvania
959-9000
</Table>
B. This amendment to the Registration Statement comprises the following papers
and documents:
The facing sheet
The Prospectus
The signatures
Consents of Independent Auditors
and Counsel as indicated
Exhibits as listed on page S-5
<Page>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Claymore Securities Defined Portfolios, Series 154 has duly caused this
Amendment to the Registration Statement to be signed on its behalf by the
undersigned thereunto duly authorized in the City of Wheaton and State of
Illinois on the 25th day of July, 2003.
CLAYMORE SECURITIES DEFINED
PORTFOLIOS, SERIES 154
(Registrant)
By CLAYMORE SECURITIES, INC.
(Depositor)
By /s/ Nicholas Dalmaso
--------------------------------
Chief Operations Officer and
General Counsel
<Page>
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons in
the capacities and on the date indicated:
<Table>
<Caption>
SIGNATURE* TITLE** DATE
)
)
)
DAVID HOOTEN* Chief Executive Officer and ) By: /s/ Nicholas Dalmaso
Chairman of the Board of ) --------------------
Directors ) Nicholas Dalmaso
Attorney-in-Fact*
July 25, 2003
Chief Financial Officer, July 25, 2003
/S/ CHARLES MILLINGTON Treasurer and Director
- ----------------------
CHARLES MILLINGTON
Chief Operations Officer, July 25, 2003
/S/ NICHOLAS DALMASO General Counsel,
- -------------------- Secretary and Director
NICHOLAS DALMASO
</Table>
- ----------
* An executed copy of each of the related powers of attorney were filed as
Exhibit 6.0 to Registration Statement No. 333-98345 on August 22, 2002.
** The titles of the persons named herein represent their capacity in and
relationship to Claymore Securities, Inc., the Depositor.
<Page>
CONSENT OF INDEPENDENT AUDITORS
The consent of Grant Thornton LLP to the use of its report and to the reference
to such firm in the Prospectus included in the Registration Statement is filed
by this amendment as Exhibit 4.1 to the Registration Statement.
CONSENT OF CHAPMAN AND CUTLER LLP
The consent of Chapman and Cutler LLP to the use of its name in the Prospectus
included in the Registration Statement is contained in its opinions filed by
this amendment as Exhibits 3.1 and 3.2 to the Registration Statement.
CONSENT OF EMMET, MARVIN & MARTIN, LLP
The consent of Emmet, Marvin & Martin, LLP to the use of its name in the
Prospectus included in the Registration Statement is contained in its opinions
filed by this amendment as Exhibits 3.3 and 3.4 to the Registration Statement.
<Page>
MEMORANDUM
CLAYMORE SECURITIES DEFINED PORTFOLIOS, SERIES 154
FILE NO. 333-106475
The Prospectus and the Indenture filed with Amendment No. 1 to the
Registration Statement on Form S-6 have been revised to reflect information
regarding the deposit of securities on July 25, 2003 and to set forth certain
data based thereon. In addition, there are a number of other changes from the
Prospectus as originally filed.
An effort has been made to set forth below certain of the changes and also
to reflect all changes by marking the Prospectus submitted with the Amendment.
FORM S-6
FACING SHEET. The amendment number and 487 election are now provided.
THE PROSPECTUS
PART A. The date of the Prospectus has been updated.
PART A. The "Essential Information" and "Fees and Expenses" sections,
including applicable footnotes, have been updated.
PART A. The period over which the deferred sales charge will be collected
has been updated.
PART A. The Trust Portfolio(s) and the related footnotes have been updated.
PART A. The Statement(s) of Financial Condition and the related footnotes
have been updated.
PART A. The Report of Independent Auditors has been updated.
PART B. The date of the Prospectus has been updated.
BACK COVER. The date of the Prospectus has been updated.
CHAPMAN AND CUTLER LLP
Chicago, Illinois
July 25, 2003