Form 487 FIRST TRUST COMBINED
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Registration No. 333-264386
1940 Act No. 811-2541
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:
THE FIRST TRUST COMBINED SERIES 615
B.Name of depositor:
FIRST TRUST PORTFOLIOS L.P.
C.Complete address of depositor's principal executive offices:
120 East Liberty Drive
Suite 400
Wheaton, Illinois 60187
D.Name and complete address of agents for service:
| Copy to: | |
| JAMES A. BOWEN | ERIC F. FESS |
| c/o First Trust Portfolios L.P. | c/o Chapman and Cutler LLP |
| 120 East Liberty Drive | 320 South Canal Street |
| Suite 400 | 27th Floor |
| Wheaton, Illinois 60187 | Chicago, Illinois 60606 |
E.Title and Amount of Securities Being Registered:
An indefinite number of Units pursuant to Rule 24f-2 promulgated under the Investment Company Act of 1940, as amended.
F.Approximate date of proposed sale to public:
As soon as practicable after the effective date of the Registration Statement.
| |X| | Check box if it is proposed that this filing will become effective on December 6, 2022 at 2:00 p.m. pursuant to Rule 487. |
________________________________
Tax Exempt Municipal Income Trust, Intermediate, Series 46
The First Trust(R) Combined Series 615
The First Trust Combined Series 615 consists of a unit investment trust known
as Tax Exempt Municipal Income Trust, Intermediate, Series 46 (the "Trust").
The Trust invests in a portfolio of tax-exempt municipal bonds issued by or on
behalf of certain states or United States territories which, in the opinion of
recognized bond counsel to the issuing authorities, provide income which is
exempt from federal and, in certain instances, state and local income tax (the
"Securities"). The Trust seeks income exempt from federal and, in certain
instances, state and local income tax and to preserve capital.
THE SECURITIES AND EXCHANGE COMMISSION ("SEC") HAS NOT APPROVED OR DISAPPROVED
OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
FIRST TRUST(R)
800-621-1675
The date of this prospectus is December 6, 2022
Table of Contents
Summary of Essential Information 3
Fee Table 4
Report of Independent Registered Public Accounting Firm 5
Statement of Net Assets 6
Schedule of Investments 7
The First Trust Combined Series 12
Portfolio 13
Estimated Returns 13
Risk Factors 13
Public Offering 19
Distribution of Units 20
Underwriting Concessions 22
Underwriting 22
The Sponsor's Profits 22
The Secondary Market 22
How We Purchase Units 22
Expenses and Charges 23
Tax Status 23
Rights of Unit Holders 25
Income and Capital Distributions 25
Redeeming Your Units 26
Removing Securities from the Trust 26
Amending or Terminating the Indenture 27
Information on the Sponsor and Trustee 28
Other Information 29
Description of Bond Ratings 29
Federal Tax-Free Income 31
Page 2
Summary of Essential Information (Unaudited)
Tax Exempt Municipal Income Trust, Intermediate, Series 46
The First Trust Combined Series 615
At the Opening of Business on the Initial Date of Deposit-December 6, 2022
Sponsor: First Trust Portfolios L.P.
Trustee: The Bank of New York Mellon
Initial Number of Units 12,625
Fractional Undivided Interest in the Trust per Unit 1/12,625
Principal Amount (Par Value) of Securities per Unit (1) $ 1,000.00
Public Offering Price:
Public Offering Price per Unit (2) $ 1,078.25
Less Maximum Sales Charge per Unit (3) (26.81)
___________
Aggregate Offering Price Evaluation of Securities per Unit (4) 1,051.44
Less Organization Costs per Unit (5) (6.00)
___________
Net Asset Value per Unit (based on aggregate offer prices of Securities) (5) $ 1,045.44
===========
Sponsor's Initial Repurchase Price per Unit (5) $ 1,051.44
Redemption Price per Unit (based on aggregate bid prices of Securities) (5) $ 1,043.82
Weighted Average Maturity of the Securities 9.9 years
First Settlement Date December 8, 2022
Termination Date (6) December 14, 2035
Ticker Symbol FPZGCX
Distributions (7):
Estimated Net Annual Interest Income per Unit $ 40.50
Initial Distribution per Unit $ 3.59
Estimated Regular Distributions per Unit $ 3.37
Estimated Current Return (8) 3.76%
Estimated Long-Term Return (8) 3.04%
CUSIP Number 33741C 124
Fee Account CUSIP Number 33741C 132
Pricing Line Product Code 142185
____________
(1) Because certain of the Securities may, in certain circumstances, be sold,
redeemed or mature in accordance with their terms, the Unit value at the
Termination Date may not equal the Principal Amount (Par Value) of Securities
per Unit stated above.
(2) The Public Offering Price shown above reflects the value of the Securities
at the opening of business on the Initial Date of Deposit. No investor will
purchase Units at this price. The price you pay for your Units will be based
on their valuation at the Evaluation Time on the date you purchase your Units.
On the Initial Date of Deposit, the Public Offering Price per Unit will not
include any accrued interest on the Securities. After this date, a pro rata
share of any accrued interest on the Securities will be included.
(3) You will pay a maximum sales charge of 2.50% of the Public Offering Price
per Unit (equivalent to 2.564% of the net amount invested). Investors will not
be assessed a sales charge on the portion of their Units represented by cash
deposited to pay the Trust's organization costs.
(4) Each Security is valued at its aggregate offering price. The initial
evaluation for purposes of determining the purchase, sale or redemption price
of Units on the Initial Date of Deposit will occur at the latter of 4:00 p.m.
Eastern time or the effectiveness of the Trust. Thereafter, evaluations for
purposes of determining the purchase, sale or redemption price of Units are
made as of the close of trading on the New York Stock Exchange ("NYSE")
(generally 4:00 p.m. Eastern time) on each day on which it is open (the
"Evaluation Time").
(5) The Net Asset Value per Unit figure reflects the deduction of estimated
organization costs, which will be deducted from the assets of the Trust at the
end of the initial offering period. The Sponsor's Initial Repurchase Price per
Unit does not reflect the deduction of estimated organization costs until the
end of the initial offering period as set forth under "Fee Table." The
Redemption Price per Unit reflects the deduction of such estimated
organization costs. See "Redeeming Your Units."
(6) See "Amending or Terminating the Indenture."
(7) Distributions from the Interest Account will be paid on the twenty-fifth day
of each month ("Distribution Date") to Unit holders of record on the tenth day
of such month ("Distribution Record Date"). The amount of the Estimated Regular
Distributions per Unit was calculated on the basis of the Estimated Annual
Interest Income per Unit less the estimated annual expenses and divided by
twelve. Each Unit holder will receive the Initial Distribution per Unit from the
Interest Account on January 25, 2023. Estimated Regular Distributions per Unit
from the Interest Account will occur monthly, beginning February 25, 2023. The
actual distribution you receive will vary from that set forth above with changes
in the Trust's fees and expenses and with the sale, maturity or redemption of
Securities. See "Fee Table" and "Expenses and Charges." Distributions from the
Principal Account will be made monthly if the amount available for distribution
equals at least $1.00 per Unit. See "Income and Capital Distributions."
(8) Estimated Current Return is calculated by dividing Estimated Net Annual
Interest Income per Unit by the Public Offering Price. Estimated Long-Term
Return is calculated using a formula which (1) factors in the relative
weightings of the market values, yields (which take into account the
amortization of premiums and the accretion of discounts) and estimated
retirements of the Securities; and (2) takes into account a compounding
factor, the sales charge and expenses. There is no assurance that the
Estimated Current and Long-Term Returns set forth above will be realized in
the future because the various components used to calculate these figures,
such as Trust expenses, market values and estimated retirements of the
Securities, will change. In addition, neither rate reflects the true return
you will receive, which will be lower, because neither includes the effect of
certain delays in distributions with respect to when the Securities pay
interest and when distributions are paid by the Trust.
Page 3
Fee Table (Unaudited)
This Fee Table describes the fees and expenses that you may pay if you buy and
hold Units of the Trust and receive distributions monthly. See "Public
Offering" and "Expenses and Charges." Although the Trust has a term of
approximately 13 years and is a unit investment trust rather than a mutual
fund, this information allows you to compare fees.
Amount
per Unit
________
Unit Holder Sales Fees
(as a percentage of public offering price)
Maximum sales charge imposed on purchase 2.50%(a) $26.81
===== ======
Organization Costs
(as a percentage of public offering price)
Estimated organization costs .556%(b) $6.00
===== =====
Estimated Annual Trust Operating Expenses(c)
(as a percentage of average net assets)
Portfolio supervision, bookkeeping, administrative and evaluation fees .075% $0.81
Trustee's fee and other operating expenses .171%(d) $1.84
_____ _____
Total .246% $2.65
===== =====
Example
This example is intended to help you compare the cost of investing in the
Trust with the cost of investing in other investment products. The example
assumes that you invest $10,000 in the Trust for the periods shown and sell
all your Units at the end of those periods. The example also assumes a 5%
return on your investment each year and that the Trust's operating expenses
stay the same. The example does not take into consideration transaction fees
which may be charged by certain broker/dealers for processing redemption
requests. Although your actual costs may vary, based on these assumptions your
costs, assuming you sell or redeem your Units at the end of each period, would
be:
1 Year 3 Years 5 Years 10 Years
______ _______ _______ ________
$330 $381 $438 $603
The example will not differ if you hold rather than sell your Units at the end
of each period.
____________
(a) The maximum sales charge consists entirely of an initial sales charge,
deducted at the time of purchase. Investors will not be assessed a sales
charge on the portion of their Units represented by cash deposited to pay the
Trust's organization costs.
(b) Estimated organization costs will be deducted from the assets of the Trust
at the end of the initial offering period. Estimated organization costs are
assessed on a fixed dollar amount per Unit basis which, as a percentage of
average net assets, will vary over time.
(c) Each of the fees listed herein is assessed on a fixed dollar amount per
Unit basis which, as a percentage of average net assets, will vary over time.
(d) Other operating expenses do not include brokerage costs and other
portfolio transaction fees. A portion of the Trustee's fee represents the cost
to the Trustee of advancing funds to the Trust to meet scheduled
distributions, to provide funds for payment of redemptions, or otherwise as
required for the administration of the Trust. The Trustee can adjust the
amount of its fee in response to, among other things, changes in short-term
interest rates and changes in the average cash balances on hand in the Trust
Accounts. In certain circumstances the Trust may incur additional expenses not
set forth above. See "Expenses and Charges."
Page 4
Report of Independent
Registered Public Accounting Firm
To the Unit Holders and the Sponsor, First Trust Portfolios L.P., of The First
Trust(R) Combined Series 615
Opinion on the Statement of Net Assets
We have audited the accompanying statement of net assets of The First Trust(R)
Combined Series 615, comprising Tax Exempt Municipal Income Trust,
Intermediate, Series 46 (the "Trust"), one of the series constituting The
First Trust(R) Combined Series, including the schedule of investments, as of
the opening of business on December 6, 2022 (Initial Date of Deposit), and the
related notes. In our opinion, the statement of net assets presents fairly, in
all material respects, the financial position of the Trust as of the opening
of business on December 6, 2022 (Initial Date of Deposit), in conformity with
accounting principles generally accepted in the United States of America.
Basis for Opinion
This statement of net assets is the responsibility of the Trust's Sponsor. Our
responsibility is to express an opinion on this statement of net assets based
on our audit. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (PCAOB) and are required to
be independent with respect to the Trust in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of net assets is free of material
misstatement, whether due to error or fraud. The Trust is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. As part of our audit we are required to obtain an
understanding of internal control over financial reporting but not for the
purpose of expressing an opinion on the effectiveness of the Trust's internal
control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material
misstatement of the statement of net assets, whether due to error or fraud,
and performing procedures that respond to those risks. Such procedures
included examining, on a test basis, evidence regarding the amounts and
disclosures in the statement of net assets. Our audit also included evaluating
the accounting principles used and significant estimates made by the Trust's
Sponsor, as well as evaluating the overall presentation of the statement of
net assets. Our procedures included confirmation of securities delivered to
the Trust and of the irrevocable letter of credit held by The Bank of New York
Mellon, the Trustee, and deposited in the Trust for the purchase of
securities, as shown in the statement of net assets, as of the opening of
business on December 6, 2022, by correspondence with the Trustee. We believe
that our audit provides a reasonable basis for our opinion.
/s/ DELOITTE & TOUCHE LLP
Chicago, Illinois
December 6, 2022
We have served as the auditor of one or more investment companies sponsored by
First Trust Portfolios L.P. since 2001.
Page 5
Statement of Net Assets
Tax Exempt Municipal Income Trust, Intermediate, Series 46
The First Trust Combined Series 615
At the Opening of Business on the Initial Date of Deposit-December 6, 2022
NET ASSETS
Investment in Securities represented by Securities and/or purchase contracts (1)(2) $13,198,730
Accrued interest on underlying Securities (2)(3) 123,886
Cash (2) 75,750
___________
13,398,366
Less liability for reimbursement to Sponsor for organization costs (4) (75,750)
Less distributions payable (3) (123,886)
___________
Net assets $13,198,730
===========
Units outstanding 12,625
Net asset value per Unit (5) $ 1,045.44
ANALYSIS OF NET ASSETS
Cost to investors (6) $13,612,956
Less maximum sales charge (6) (338,476)
Less estimated reimbursement to Sponsor for organization costs (4) (75,750)
___________
Net assets $13,198,730
===========
_____________
NOTES TO STATEMENT OF NET ASSETS
The Trust is registered as a unit investment trust under the Investment
Company Act of 1940. The Sponsor is responsible for the preparation of
financial statements in accordance with accounting principles generally
accepted in the United States which require the Sponsor to make estimates and
assumptions that affect amounts reported herein. Actual results could differ
from those estimates. The Trust intends to comply in its initial fiscal year
and thereafter with provisions of the Internal Revenue Code applicable to
regulated investment companies and as such, will not be subject to federal
income taxes on otherwise taxable income (including net realized capital
gains) distributed to Unit holders.
(1) The Trust invests in a diversified portfolio of tax-exempt municipal
bonds. Aggregate cost of the Securities listed under "Schedule of Investments"
is based on their aggregate underlying value. The Trust has a Termination Date
of December 14, 2035.
(2) An irrevocable letter of credit issued by The Bank of New York Mellon, of
which $9,500,000 is allocated to the Trust, has been deposited with the
Trustee as collateral, covering the monies necessary for the purchase of
Securities subject to purchase contracts ($6,231,855) (which includes accrued
interest to the Initial Date of Deposit ($123,886)), cash ($75,750) and
accrued interest from the Initial Date of Deposit to the later of the First
Settlement Date of the Trust or the expected dates of delivery of the
Securities ($3,026). The Trustee will advance to the Trust the amount of net
interest accrued to the First Settlement Date, which will be distributed to
the Sponsor as Unit holder of record.
(3) The purchased interest on the underlying Securities accrued to the Initial
Date of Deposit will be distributed to the Sponsor as Unit holder of record.
(4) A portion of the Public Offering Price consists of an amount sufficient to
reimburse the Sponsor for all or a portion of the costs of establishing the
Trust. These costs have been estimated at $6.00 per Unit. A payment will be
made at the end of the initial offering period to an account maintained by the
Trustee from which the obligation of the investors to the Sponsor will be
satisfied. To the extent that actual organization costs are greater than the
estimated amount, only the estimated organization costs added to the Public
Offering Price will be reimbursed to the Sponsor and deducted from the assets
of the Trust.
(5) Net asset value per Unit is calculated by dividing the Trust's net assets
by the number of Units outstanding. This figure includes organization costs,
which will only be assessed to Units outstanding at the close of the initial
offering period.
(6) The aggregate cost to investors in the Trust, excluding the amount held in
cash deposited to pay the Trust's organization costs, includes a maximum sales
charge computed at the rate of 2.50% of the Public Offering Price per Unit
(equivalent to 2.564% of the net amount invested), assuming no reduction of
sales charge as set forth under "Public Offering."
Page 6
Schedule of Investments
Tax Exempt Municipal Income Trust, Intermediate, Series 46
The First Trust Combined Series 615
At the Opening of Business on the Initial Date of Deposit-December 6, 2022
Rating Cost of
Aggregate Issue Represented by Securities or (Unaudited) Redemption Securities to the
Principal Sponsor's Contracts to Purchase Securities (1) S&P (3) Provisions (4) Trust (2)(5)
_________ ______________________________________________ ___________ ______________ __________________
MUNICIPAL BONDS (100.00%):
ALABAMA (3.19%):
$ 125,000 Board of Trustees of the Alabama Community College System, AA 2031 @ 100 $ 127,136
Special Fee Revenue, Series 2021, Assured Guaranty Insured,
4.00%, Due 09/01/2035 (6)
325,000 Lurleen B. Wallace Community College, Revenue Refunding, Series AA 2031 @ 100 293,829
2021, Build America Mutual Insured, 3.00%, 2032 @ 100 S.F.
Due 09/01/2034 (6)
CALIFORNIA (2.00%):
235,000 San Joaquin Hills Transportation Corridor Agency, Senior Lien A 2032 @ 100 263,487
Toll Road Refunding Revenue, Series 2021A, 5.00%,
Due 01/15/2033
ILLINOIS (18.45%):
150,000 City of Chicago, Chicago O'Hare International Airport, General A+ 2030 @ 100 151,288
Airport Senior Lien Revenue Refunding, Series 2020A,
(Non-AMT), 4.00%, Due 01/01/2035
250,000 Community College District No. 515, Counties of Cook and Will, AA 2028 @ 100 263,352
State of Illinois, (Prairie State Community College), General
Obligation Limited Community College, Series 2020B, Build
America Mutual Insured, 4.00%, Due 12/01/2032 (6)
485,000 Community Unit School District Number 6, Woodford, LaSalle, AA 2029 @ 100 498,687
Livingston and Marshall Counties, Illinois, (Fieldcrest),
General Obligation School, Series 2020A, Build America Mutual
Insured, 4.00%, Due 12/01/2034 (6)
445,000 The County of Sangamon, Illinois, General Obligation Limited AA 2029 @ 100 413,240
Tax, Series 2021, Build America Mutual Insured, 3.00%,
Due 12/15/2034 (6)
175,000 Crawford Hospital District, Crawford County, Illinois, General BBB 178,803
Obligation Hospital, Series 2021A, 4.00%, Due 01/01/2028
525,000 Illinois Finance Authority, Health Services Facility Lease BBB+ 2030 @ 100 550,830
Revenue, (Provident Group - UIC Surgery Center LLC -
University of Illinois Health Services Facility Project),
Series 2020, 5.00%, Due 10/01/2035
145,000 School District Number 37, Rock Island County, Illinois, (East AA 2030 @ 100 142,362
Moline), General Obligation School, Series 2021B, Build America
Mutual Insured, 3.00%, Due 02/01/2032 (6)
100,000 School District Number 81, Cook County, Illinois, (Schiller AA 2029 @ 100 90,250
Park), General Obligation School, Series 2020, Build America
Mutual Insured, 3.00%, Due 12/01/2034 (6)
165,000 School District Number 87, Cook County, Illinois, (Berkeley), AA 2030 @ 100 146,017
General Obligation School, Series 2021, Assured Guaranty
Insured, 3.00%, Due 12/01/2035 (6)
INDIANA (9.06%):
215,000 Elkhart Community School Building Corporation, Elkhart County, AA+ 2032 @ 100 224,537
Indiana, First Mortgage, Series 2022B, 4.00%, Due 07/15/2033 2033 @ 100 S.F.
110,000 Indiana Finance Authority, Educational Facilities Revenue, NR 119,401
(Tax-Exempt), (Depauw University Project), Series 2022A, 5.00%,
Due 07/01/2028
Page 7
Schedule of Investments (cont'd.)
Tax Exempt Municipal Income Trust, Intermediate, Series 46
The First Trust Combined Series 615
At the Opening of Business on the Initial Date of Deposit-December 6, 2022
Rating Cost of
Aggregate Issue Represented by Securities or (Unaudited) Redemption Securities to the
Principal Sponsor's Contracts to Purchase Securities (1) S&P (3) Provisions (4) Trust (2)(5)
_________ ______________________________________________ ___________ ______________ _________________
INDIANA (CONT'D.):
$ 855,000 Town of Upland, Indiana, Economic Development Revenue, A- 2030 @ 100 S.F. $ 851,862
Series 2021, (Taylor University Project), 4.00%,
Due 09/01/2031
LOUISIANA (4.18%):
500,000 City of New Orleans, Louisiana, Sewerage Service Revenue, Series A 2030 @ 100 551,855
2020B, 5.00%, Due 06/01/2034
MICHIGAN (1.68%):
225,000 City of Southfield, County of Oakland, State of Michigan, 2019 AA 2029 @ 100 221,643
Water and Sewer Capital Improvement, (Limited Tax General
Obligation), 3.00%, Due 05/01/2031
MINNESOTA (1.59%):
200,000 Independent School District No. 720, Shakopee Public Schools, NR 209,274
Minnesota, Refunding, Series 2021B, 4.00%, Due 02/01/2030
MISSOURI (4.47%):
550,000 Health and Educational Facilities Authority of the State of BBB+ 2031 @ 100 590,430
Missouri, Health Facilities Revenue, (Lake Regional Health
System), Series 2021, 5.00%, Due 02/15/2032
MONTANA (3.00%):
440,000 Montana Facility Finance Authority, Health Care Facilities BBB- 2030 @ 100 395,732
Revenue, (Montana Children's Home and Hospital Project), 2031 @ 100 S.F.
Series 2020A, 4.00%, Due 07/04/2035
NEVADA (0.98%):
125,000 Washoe County School District, Nevada, General Obligation, AA 2029 @ 100 129,869
(Limited Tax), School Improvement, (Additionally Secured by
Pledged Revenues), Series 2019B, 4.00%, Due 10/01/2034
NEW JERSEY (14.48%):
685,000 The Board of Education of the City of Newark, In the County of AA 769,981
Essex, New Jersey, School Energy Savings Obligation Refunding,
Series 2021, Build America Mutual Insured, 5.00%,
Due 07/15/2030 (6)
650,000 New Jersey Transportation Trust Fund Authority, Transportation BBB+ 2031 @ 100 727,902
Program, 2022 Series BB, 5.00%, Due 06/15/2032
395,000 Township of Mansfield in the County of Burlington, New Jersey, AA 2029 @ 100 412,838
General Obligation, General Improvement and Sewer Utility,
Series 2022, 4.00%, Due 11/01/2034
NEW YORK (1.00%):
125,000 Long Island Power Authority, Electric System General Revenue, A 2031 @ 100 132,376
Series 2021A, 4.00%, Due 09/01/2033
OKLAHOMA (3.81%):
290,000 Pontotoc County Educational Facilities Authority, Educational NR 302,772
Facilities Lease Revenue, (Ada Public Schools Project),
Series 2021, 4.00%, Due 09/01/2028
210,000 Seminole County Educational Facilities Authority, Educational BBB+ 200,920
Facilities Lease Revenue, (Wewoka Public Schools Project),
Series 2021, 3.00%, Due 12/01/2030
Page 8
Schedule of Investments (cont'd.)
Tax Exempt Municipal Income Trust, Intermediate, Series 46
The First Trust Combined Series 615
At the Opening of Business on the Initial Date of Deposit-December 6, 2022
Rating Cost of
Aggregate Issue Represented by Securities or (Unaudited) Redemption Securities to the
Principal Sponsor's Contracts to Purchase Securities (1) S&P (3) Provisions (4) Trust (2)(5)
_________ _____________________________________________ ___________ ______________ _________________
PENNSYLVANIA (16.10%):
$ 500,000 Adams County General Authority, Gettysburg College, Revenue, A $ 555,380
Series 2020, 5.00%, Due 08/15/2030
390,000 City of Erie Higher Education Building Authority, (Commonwealth BBB+ 412,441
of Pennsylvania), Revenue, (AICUP Financing Program - Gannon
University Project), Series 2021 TT1, 5.00%,
Due 05/01/2030
1,000,000 City of Lancaster, Lancaster County, Pennsylvania, General AA 1,156,390
Obligation, Series 2022, Build America Mutual Insured, 5.00%,
Due 11/01/2032 (6)
TENNESSEE (0.90%):
130,000 City of Memphis, Tennessee, Memphis Light, Gas and Water A+ 2030 @ 100 118,759
Division, Electric System Revenue, Series 2020A, 3.00%,
Due 12/01/2035
TEXAS (9.12%):
310,000 Andrews County Hospital District, Texas, (Andrews County), NR 2030 @ 100 326,300
General Obligation Refunding, Series 2021, 4.00%,
Due 03/15/2032
160,000 Cities of Dallas and Fort Worth, Texas, Dallas Fort Worth A+ 2030 @ 100 162,714
International Airport, Joint Revenue Refunding, Series 2020A,
4.00%, Due 11/01/2035
110,000 City of Lubbock, Texas, Electric Light and Power System A 2030 @ 100 112,254
Revenue, Series 2021, 4.00%, Due 04/15/2035
145,000 City of New Braunfels, Texas, Combination Tax and Revenue AA 2029 @ 100 152,627
Certificates of Obligation, Series 2020, 4.00%, Due 02/01/2031
250,000 Dallas Fort Worth International Airport, Joint Revenue A+ 2030 @ 100 254,865
Refunding, Series 2020B, (Non-AMT), 4.00%, Due 11/01/2034
190,000 North Texas Tollway Authority, System Revenue and Refunding, A+ 2031 @ 100 194,982
Second Tier, Series 2021B, 4.00%, Due 01/01/2035
WASHINGTON (3.18%):
240,000 Washington Health Care Facilities Authority, Refunding Revenue, A+ 2028 @ 100 262,824
Series 2018B, (Providence St. Joseph Health), 5.00%,
Due 10/01/2031
145,000 Washington Health Care Facilities Authority, Revenue, NR 2030 @ 100 157,168
Series 2021, (Seattle Cancer Care Alliance), 5.00%,
Due 12/01/2033
WISCONSIN (2.81%):
165,000 Public Finance Authority, Health Care Facilities Revenue, A- 2031 @ 100 165,328
(Scotland Health Care System), Series 2021A, 4.00%,
Due 10/01/2035
190,000 Public Finance Authority, Health Care Facilities Revenue, A- 206,025
(Scotland Health Care System), Series 2021A, 5.00%,
Due 10/01/2029
___________ ___________
$12,625,000 Total Investments $13,198,730
=========== ===========
__________
See "Notes to Schedule of Investments" on page 10.
Page 9
NOTES TO SCHEDULE OF INVESTMENTS
(1) The percentages shown in the Schedule of Investments represent the
percentage of net assets. All Securities are represented by the actual
Securities and/or regular way contracts to purchase such Securities which are
backed by an irrevocable letter of credit deposited with the Trustee. The
Sponsor entered into purchase contracts for the Securities on November 28,
2022, November 29, 2022, November 30, 2022, December 1, 2022, December 2,
2022, December 5, 2022 and December 6, 2022, and the Sponsor expects that any
outstanding purchase contracts as of December 6, 2022 will settle on or prior
to December 8, 2022. The Securities are obligations of issuers of certain
states or United States territories. The Securities in the Trust are divided
by source of revenue and represent the percentage of net assets as indicated
by the following table:
Number of Issues Source of Revenue Portfolio Percentage
________________ _________________ ____________________
6 Education 17.88%
15 General Obligation 38.85%
7 Health Care 17.64%
1 Lease Obligation 1.52%
2 Miscellaneous 3.88%
6 Transportation Facility 13.30%
3 Utility 2.75%
1 Water and Sewerage 4.18%
(2) The cost of the Securities to the Trust represents the aggregate
underlying value with respect to the Securities acquired (generally determined
by the aggregate offering price of the Securities at the opening of business
on the Initial Date of Deposit). The cost of the Securities to the Sponsor and
the Sponsor's profit (which is the difference between the cost of the
Securities to the Sponsor and the cost of the Securities to the Trust) are
$13,033,187 and $165,543, respectively. The cost of the Securities to the
Sponsor may include the cost of and gain or loss on certain futures contracts
entered into by the Sponsor in an effort to hedge the impact of interest rate
fluctuations on the value of certain of the Securities to the extent the
Sponsor entered into such contracts. The aggregate bid price of the Securities
at the opening of business on the Initial Date of Deposit was $13,178,230
(unaudited).
(3) The ratings are by Standard & Poor's Financial Services LLC, a division of
S&P Global Inc. ("S&P" or "Standard & Poor's") and are unaudited. Such ratings
were obtained from an information reporting service other than S&P. "NR"
indicates no rating by S&P. Such Securities may, however, be rated by another
nationally recognized statistical rating organization. "(e)" indicates an
"Expected Rating" and is intended to anticipate Standard & Poor's forthcoming
rating assignment. Expected Ratings are generated by Bloomberg Finance L.P.
("Bloomberg") based on sources it considers reliable or established Standard &
Poor's rating practices. Expected Ratings exist only until Standard & Poor's
assigns a rating to the issue. There is no guarantee that the ratings, when
assigned, will not differ from those currently expected. See "Description of
Bond Ratings."
(4) Certain Securities may be redeemed before their stated maturity. This
column shows when a Security is initially redeemable and the redemption price
for that year. Securities are redeemable at declining prices (but not below
par value) in subsequent years. S.F. indicates a sinking fund is established
with respect to an issue of Securities. Certain Securities may also be
redeemed in whole or in part other than by operation of the stated redemption
provisions under certain circumstances, including the occurrence of certain
"extraordinary" events, detailed in the instruments creating them. These
"extraordinary" events typically include acts of God, war, a change in law or
the tax-exempt nature of the distributions and other items outside the control
of the issuer. Such redemption provisions may result in a redemption price
less than the value of the Securities on the Initial Date of Deposit.
Redemption pursuant to call provisions generally will occur at times when the
redeemed Securities have an offering side valuation which represents a premium
over par. To the extent that Securities were deposited in the Trust at a price
higher than the price at which they are redeemed, this will represent a loss
of capital when compared with the original Public Offering Price of the Units.
Distributions will generally be reduced by the amount of the income which
would otherwise have been paid with respect to redeemed Securities and Unit
holders will receive a distribution of the principal amount and any premium
received on such redemption (except to the extent the proceeds of the redeemed
Page 10
Securities are used to pay for Unit redemptions). Estimated Current Return and
Estimated Long-Term Return may also be affected by such redemptions.
(5) In accordance with Financial Accounting Standards Board Accounting
Standards Codification 820 ("ASC 820"), "Fair Value Measurement," fair value
is defined as the price that the Trust would receive upon selling an
investment in a timely transaction to an independent buyer in the principal or
most advantageous market of the investment. ASC 820 established a three-tier
hierarchy to maximize the use of the observable market data and minimize the
use of unobservable inputs and to establish classification of the fair value
measurements for disclosure purposes. Inputs refer broadly to the assumptions
that market participants would use in pricing the asset or liability,
including the technique or pricing model used to measure fair value and the
risk inherent in the inputs to the valuation technique. Inputs may be
observable or unobservable. Observable inputs are inputs that reflect the
assumptions market participants would use in pricing the asset or liability,
developed based on market data obtained from sources independent of the
reporting entity. Unobservable inputs are inputs that may reflect the
reporting entity's own assumptions about the assumptions market participants
would use in pricing the asset or liability, developed based on the best
information available in the circumstances. The three-tier hierarchy of inputs
is summarized in the three broad levels: Level 1 which represents quoted
prices in active markets for identical investments; Level 2 which represents
fair value based on other significant observable inputs (including, quoted
prices for similar investments in active markets, quoted prices for identical
or similar investments in markets that are non-active, inputs other than
quoted prices that are observable for the investment (for example, interest
rates and yield curves observable at commonly quoted intervals, volatilities,
prepayment speeds, loss severities, credit risks, and default rates) or inputs
that are derived from or corroborated by observable market data by correlation
or other means); and Level 3 which represents fair value based on significant
unobservable inputs (including the Trust's own assumptions in determining the
fair value of investments). At the date of deposit, all of the Trust's
investments are classified as Level 2; the valuation on the date of deposit
was determined by the Sponsor using offering prices provided by third-party
pricing services. The inputs used by these third party pricing services were
based upon significant observable inputs, that included, but were not limited
to, the items noted above.
(6) Insurance has been obtained by the issuer of this Security. Such insurance
coverage continues in force so long as a Security is outstanding and the
insurer remains in business. For Securities with credit support from third
party guarantees, the rating reflects the greater of the underlying rating of
the issuer or the insured rating. See "Risk Factors" in the prospectus for a
discussion of risks of investing in insured Securities.
Page 11
The First Trust Combined Series
The First Trust Combined Series Defined.
We, First Trust Portfolios L.P. (the "Sponsor"), have created hundreds of
similar yet separate series of an investment company which we have named The
First Trust Combined Series. The series to which this prospectus relates, The
First Trust Combined Series 615, consists of a single portfolio known as Tax
Exempt Municipal Income Trust, Intermediate, Series 46.
The Trust was created under the laws of the State of New York by a Trust
Agreement (the "Indenture") dated the Initial Date of Deposit. This agreement,
entered into between First Trust Portfolios L.P., as Sponsor, The Bank of New
York Mellon as Trustee and First Trust Advisors L.P. as Portfolio Supervisor,
governs the operation of the Trust.
YOU MAY GET MORE SPECIFIC DETAILS CONCERNING THE NATURE, STRUCTURE AND RISKS
OF THIS PRODUCT IN AN "INFORMATION SUPPLEMENT" BY CALLING THE SPONSOR AT 800-
621-1675, DEPT. CODE 2.
How We Created the Trust.
On the Initial Date of Deposit, we deposited municipal bonds and/or contracts
for municipal bonds (including a letter of credit or the equivalent) with the
Trustee and, in turn, the Trustee delivered documents to us representing our
ownership of the Trust, in the form of units ("Units").
After the Initial Date of Deposit, we may deposit additional Securities in the
Trust, or cash (including a letter of credit or the equivalent) with
instructions to buy more Securities to create new Units for sale. If we create
additional Units, we will attempt, to the extent practicable, to maintain the
percentage relationship established among the Securities on the Initial Date
of Deposit (as set forth under "Schedule of Investments"), adjusted to reflect
the occurrence of an event which affects the capital structure of the issuer
of a Security or a sale of a Security made as described in "Removing
Securities from the Trust."
Since the prices of the Securities will fluctuate daily, the ratio of
Securities in the Trust, on a market value basis, will also change daily. The
portion of Securities represented by each Unit will not change as a result of
the deposit of additional Securities in the Trust. If we deposit cash, you and
new investors may experience a dilution of your investment. This is because
prices of Securities will fluctuate between the time of the cash deposit and
the purchase of the Securities, and because the Trust pays the associated
brokerage fees. To reduce this dilution, the Trust will try to buy the
Securities as close to the Evaluation Time and as close to the evaluation
price as possible. In addition, because the Trust pays the brokerage fees
associated with the creation of new Units and with the sale of Securities to
meet redemption and exchange requests, frequent redemption and exchange
activity will likely result in higher brokerage expenses.
An affiliate of the Trustee may receive these brokerage fees or the Trustee
may retain and pay us (or our affiliate) to act as agent for the Trust to buy
Securities. If we or an affiliate of ours act as agent to the Trust, we will
be subject to the restrictions under the Investment Company Act of 1940, as
amended (the "1940 Act"). When acting in an agency capacity, we may select
various broker/dealers to execute securities transactions on behalf of the
Trust, which may include broker/dealers who sell Units of the Trust. We do not
consider sales of Units of the Trust or any other products sponsored by First
Trust as a factor in selecting such broker/dealers.
We cannot guarantee that the Trust will keep its present size and composition
for any length of time. Securities will mature or may be redeemed prior to the
Termination Date or may be periodically sold under certain circumstances to
satisfy Trust obligations, to meet redemption requests and, as described in
"Removing Securities from the Trust," to maintain the sound investment
character of the Trust, and the proceeds received by the Trust will be used to
meet Trust obligations or distributed to Unit holders. However, Securities
will not be sold to take advantage of market fluctuations or changes in
anticipated rates of appreciation or depreciation, or if they no longer meet
the criteria by which they were selected. You will not be able to dispose of
or vote any of the Securities in the Trust. As the holder of the Securities,
the Trustee will vote the Securities and, except as described in "Removing
Securities from the Trust," will endeavor to vote the Securities such that the
Securities are voted as closely as possible in the same manner and the same
general proportion as are the Securities held by owners other than such Trust.
Neither we nor the Trustee will be liable for a failure in any of the
Securities. However, if a contract for the purchase of any of the Securities
initially deposited in the Trust fails, unless we can purchase substitute
Securities ("Replacement Securities"), we will refund to you that portion of
the purchase price and sales charge resulting from the failed contract on the
next Distribution Date. Any Replacement Security the Trust acquires will meet
requirements specified in the Indenture.
Page 12
Portfolio
Objectives.
The Trust seeks to distribute income that is exempt from federal and, in
certain instances, state and local income taxes and to preserve capital by
investing in a portfolio of investment grade tax-exempt municipal bonds. Under
normal circumstances, the Trust will invest at least 80% of its assets in tax-
exempt municipal bonds.
Portfolio Selection Process.
The Sponsor utilized various metrics to select the Securities for the Trust,
including various sources of revenue and/or any such criteria as the Sponsor
deemed appropriate in relation to the Trust's investment objectives.
As of the Initial Date of Deposit, all of the Securities were rated "BBB-" or
better by Standard & Poor's, or of comparable quality by another nationally
recognized statistical rating organization. See "Description of Bond Ratings."
After the Initial Date of Deposit, a Security's rating may be lowered. This
would not immediately cause the Security to be removed from the Trust, but may
be considered by us in determining whether to direct the Trustee to dispose of
such Security. See "Removing Securities from the Trust."
Alternative Minimum Tax. The Securities included in the Trust's portfolio are
exempt from the alternative minimum tax.
The Trust has an expected life of approximately 9.6 years. A diversified
portfolio helps to offset the risks normally associated with such an
investment, although it does not eliminate them entirely.
Additional Portfolio Contents.
In addition to the investments described above, the Trust invests in: general
obligation and revenue bonds.
As with any similar investments, there can be no guarantee that the objectives
of the Trust will be achieved. See "Risk Factors" for a discussion of the
risks of investing in the Trust.
Estimated Returns
The Estimated Current and Long-Term Returns set forth in the "Summary of
Essential Information" are estimates and are designed to be comparative rather
than predictive. We cannot predict your actual return, which will vary with
Unit price, how long you hold your investment and with changes in the
portfolio, interest income and expenses. In addition, neither rate reflects
the true return you will receive, which will be lower, because neither
includes the effect of certain delays in distributions with respect to when
the Securities pay interest and when distributions are paid by the Trust.
Estimated Current Return equals the estimated annual interest income to be
received from the Securities less estimated annual Trust expenses, divided by
the Public Offering Price per Unit (which includes the initial sales charge).
Estimated Long-Term Return is a measure of the estimated return over the
estimated life of the Trust and is calculated using a formula which (1)
factors in the market values, yields (which take into account the amortization
of premiums and the accretion of discounts) and estimated retirements of the
Securities, and (2) takes into account a compounding factor, the sales charge
and expenses. Unlike Estimated Current Return, Estimated Long-Term Return
reflects maturities, discounts and premiums of the Securities in the Trust. We
will provide you with estimated cash flows for the Trust at no charge upon
your request.
Risk Factors
Price Volatility. The Trust invests in municipal bonds. The value of the
Securities will decline 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.
The value of the Securities will also fluctuate with changes in investors'
perceptions of an issuer's financial condition or the general condition of the
municipal bond market, changes in inflation rates or when political or
economic events affecting the issuers occur, negatively impacting issuers.
Because the Trust is not managed, the Trustee will not sell Securities in
response to or in anticipation of market fluctuations, as is common in managed
investments. As with any investment, we cannot guarantee that the performance
of the Trust will be positive over any period of time or that you won't lose
money. Units of the Trust are not deposits of any bank and are not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.
Interest. There is no guarantee that the issuers of the Securities will be
able to satisfy their interest payment obligations to the Trust over the life
of the Trust.
Market Risk. Market risk is the risk that a particular security, or Units of
the Trust in general, may fall in value. Securities are subject to market
Page 13
fluctuations caused by such factors as economic, political, regulatory or
market developments, changes in interest rates and perceived trends in
securities prices. Units of the Trust could decline in value or underperform
other investments. In addition, local, regional or global events such as war,
acts of terrorism, spread of infectious diseases or other public health
issues, recessions, political turbulence or other events could have a
significant negative impact on the Trust and its investments. Such events may
affect certain geographic regions, countries, sectors and industries more
significantly than others. Such events could adversely affect the prices and
liquidity of the Trust's portfolio securities and could result in disruptions
in the trading markets. Any such circumstances could have a materially
negative impact on the value of the Trust's Units and result in increased
market volatility.
In February 2022, Russia commenced a military attack on Ukraine. In response,
various countries, including the United States, issued broad-ranging sanctions
on Russia and certain Russian companies and individuals. The hostilities
between the two countries may escalate and any existing or future sanctions
could have a severe adverse effect on Russia's economy, currency, companies
and region as well as negatively impact other regional and global economic
markets of the world, companies in such countries and various sectors,
industries and markets for securities and commodities globally, such as oil
and natural gas, and may have a negative effect on the Trust's investments and
performance beyond any direct exposure to Russian issuers or those of
adjoining geographic regions. Russia may also take retaliatory actions or
countermeasures, such as cyberattacks and espionage, which may negatively
impact the countries and companies in which the Trust may invest. The extent
and duration of the military action or future escalation of such hostilities;
the extent and impact of existing and any future sanctions, market disruptions
and volatility; and the result of any diplomatic negotiations cannot be
predicted. These and any related events could have a significant negative
impact on certain of the Trust's investments as well as a Trust's performance,
and the value or liquidity of certain Securities held by the Trust may decline
significantly.
An outbreak of a respiratory disease designated as COVID-19 was first detected
in China in December 2019. The COVID-19 global pandemic and the ensuing
policies enacted by governments and central banks have caused and may continue
to cause significant volatility and uncertainty in global financial markets,
negatively impacting global growth prospects. While the U.S. has resumed
"reasonably" normal business activity, many countries continue to impose
lockdown measures. The duration of the COVID-19 outbreak and its effects
cannot be determined with certainty and may exacerbate other pre-existing
political, social and economic risks. Additionally, there is no guarantee that
vaccines will be effective against emerging variants of the disease.
Governments and central banks, including the Federal Reserve, have taken
extraordinary and unprecedented actions to support local and global economies
and financial markets. These measures have included, among other policy
responses, a $700 billion quantitative easing program, a reduction of the
Federal funds rate to near-zero, and numerous economic stimulus packages. The
impact of these and additional measures taken in the future, and whether they
will be effective in mitigating economic and market disruptions, including
upward pressure on prices, will not be known for some time. As a means to
fight inflation, the Federal Reserve has raised interest rates and expects to
continue to do so and has announced that it intends to reverse previously
implemented quantitative easing.
Municipal Securities. The Trust invests in tax-exempt municipal bonds.
Municipal bonds are debt obligations issued by states or political
subdivisions or authorities of states. Municipal bonds are typically
designated as general obligation bonds, which are general obligations of a
governmental entity that are backed by the taxing power of such entity, or
revenue bonds, which are payable from the income of a specific project or
authority and are not supported by the issuer's power to levy taxes. Municipal
bonds are long-term fixed rate debt obligations that generally decline in
value with increases in interest rates, when an issuer's financial condition
worsens or when the rating on a bond is decreased. Many municipal bonds may be
called or redeemed prior to their stated maturity, an event which is more
likely to occur when interest rates fall. In such an occurrence, you may not
be able to reinvest the money you receive in other bonds that have as high a
yield or as long a maturity.
Many municipal bonds are subject to continuing requirements as to the actual
use of the bond proceeds or manner of operation of the project financed from
bond proceeds that may affect the exemption of interest on such bonds from
federal income taxation. The market for municipal bonds is generally less
liquid than for other securities and therefore the price of municipal bonds
may be more volatile and subject to greater price fluctuations than securities
with greater liquidity. In addition, an issuer's ability to make income
distributions generally depends on several factors including the financial
condition of the issuer and general economic conditions. Any of these factors
Page 14
may negatively impact the price of municipal bonds held by the Trust and would
therefore impact the price of both the Securities and the Units.
Acts of terrorism and any resulting damage may not be covered by insurance on
the bonds. Issuers of the bonds may therefore be at risk of default due to
losses sustained as a result of terrorist activities.
The costs associated with combating the COVID-19 pandemic and the negative
impact on tax revenues has adversely affected the financial condition of many
states and political subdivisions. As a result, an increasing number of
municipalities have been unable to make payments on existing debt obligations.
This increase in defaults has resulted in many municipal issuers making draws
on reserves, further impacting the value of bonds. To aid municipalities, the
Federal Reserve and the U.S. Treasury announced the Municipal Liquidity
Facility ("MLF") program on April 9, 2020 under which the Federal Reserve will
lend on a recourse basis to a special purpose vehicle to purchase up to $500
billion of eligible notes from cities and states subject to certain population
thresholds and other requirements. The Federal Reserve's MLF program provides
a backstop for issuers to help meet the cash shortfall from lower revenues
tied to the COVID-19 pandemic. In addition, Congress included provisions in
the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") to
provide $150 billion in federal aid to state and local governments for COVID-
19 relief efforts. Different states are taking different approaches, depending
on the status of their budgets prior to the COVID-19 crisis and how
significantly they have been impacted by the pandemic. The Federal government
may provide additional relief for municipalities, however additional federal
funding for state and local governments is uncertain. It is impossible to
assess the long-term impact of these government interventions on the municipal
bond market, as many of the programs are just beginning to be operationalized.
The ongoing effects of the COVID-19 pandemic could result in continuing
financial difficulties for municipal issuers, increasing the risk of
additional defaults and volatility in the market, which could negatively
impact the performance of the Trust.
General Obligation and Revenue Bonds. General obligation bonds are general
obligations of a governmental entity that are backed by the taxing power of
such entity. All other Securities held by the Trust are revenue bonds payable
from the income of a specific project or authority and are not supported by
the issuer's power to levy taxes. General obligation bonds are secured by the
issuer's pledge of its faith, credit and taxing power for the payment of
principal and interest. Revenue bonds, on the other hand, are payable only
from the revenues derived from a particular facility or class of facilities
or, in some cases, from the proceeds of a special excise tax or other specific
revenue source. There are, of course, variations in the security of the
different bonds, both within a particular classification and between
classifications, depending on numerous factors.
Education Revenue Bonds. Certain of the Securities are considered education
revenue bonds. Education revenue bonds are payable from and secured by
revenues derived from the operation of schools, colleges and universities and
whose revenues are derived mainly from ad valorem taxes, or for higher
education systems, or from tuition, dormitory revenues, grants and endowments.
General problems relating to school bonds include litigation contesting the
state constitutionality of financing public education in part from ad valorem
taxes, thereby creating a disparity in educational funds available to schools
in wealthy areas and schools in poor areas. Litigation or legislation on this
issue may affect the sources of funds available for the payment of school
bonds in the Trust. General problems relating to college and university
obligations would include the prospect of a declining percentage of the
population consisting of "college" age individuals, possible inability to
raise tuitions and fees sufficiently to cover increased operating costs, the
uncertainty of continued receipt of Federal grants and state funding and new
government legislation or regulations which may adversely affect the revenues
or costs of such issuers. All of such issuers have been experiencing certain
of these problems in varying degrees.
Health Care Revenue Bonds. Certain of the Securities are considered health
care revenue bonds. Ratings of bonds issued for health care facilities are
sometimes based on feasibility studies that contain projections of occupancy
levels, revenue and expenses. A facility's gross receipts and net income
available for debt service may be affected by future events and conditions
including among other things, demand for services, the ability of the facility
to provide the services required, physicians' confidence in the facility,
management capabilities, competition with other hospitals, efforts by insurers
and governmental agencies to limit rates, legislation establishing state rate-
setting agencies, expenses, government regulation, the cost and possible
unavailability of malpractice insurance and the termination or restriction of
governmental financial assistance, including that associated with Medicare,
Medicaid and other similar third party payor programs.
Lease Obligation Revenue Bonds. Certain of the Securities are lease
obligations issued for the most part by governmental authorities that have no
Page 15
taxing power or other means of directly raising revenues. Rather, the
governmental authorities are financing vehicles created solely for the
construction of buildings (schools, administrative offices, convention centers
and prisons, for example) or the purchase of equipment (police cars and
computer systems, for example) that will be used by a state or local
government (the "lessee"). Thus, these obligations are subject to the ability
and willingness of the lessee government to meet its lease rental payments
which include debt service on the obligations. Lease obligations are subject,
in almost all cases, to the annual appropriation risk, i.e., the lessee
government is not legally obligated to budget and appropriate for the rental
payments beyond the current fiscal year. These obligations are also subject to
construction and abatement risk in many states-rental obligations cease in the
event that delays in building, damage, destruction or condemnation of the
project prevents its use by the lessee. In these cases, insurance provisions
designed to alleviate this risk become important credit factors. In the event
of default by the lessee government, there may be significant legal and/or
practical difficulties involved in the re-letting or sale of the project. Some
of these issues, particularly those for equipment purchase, contain the so-
called "substitution safeguard," which bars the lessee government, in the
event it defaults on its rental payments, from the purchase or use of similar
equipment for a certain period of time. This safeguard is designed to insure
that the lessee government will appropriate, even though it is not legally
obligated to do so, but its legality remains untested in most, if not all,
states.
Transportation Facility Revenue Bonds. Certain of the Securities are
considered transportation facility revenue bonds. Transportation facility
revenue bonds are obligations which are payable from and secured by revenues
derived from the ownership and operation of facilities such as airports,
bridges, turnpikes, port authorities, convention centers and arenas. The major
portion of an airport's gross operating income is generally derived from fees
received from signatory airlines pursuant to use agreements which consist of
annual payments for leases, occupancy of certain terminal space and service
fees. Airport operating income may therefore be affected by the ability of the
airlines to meet their obligations under the use agreements. The air transport
industry is experiencing significant variations in earnings and traffic, due
to increased competition, excess capacity, increased costs, deregulation,
traffic constraints and other factors, and several airlines are experiencing
severe financial difficulties. The Sponsor cannot predict what effect these
industry conditions may have on airport revenues which are dependent for
payment on the financial condition of the airlines and their usage of the
particular airport facility. Similarly, payment on bonds related to other
facilities is dependent on revenues from the projects, such as user fees from
ports, tolls on turnpikes and bridges and rents from buildings. Therefore,
payment may be adversely affected by reduction in revenues due to such factors
as increased cost of maintenance, decreased use of a facility, lower cost of
alternative modes of transportation, scarcity of fuel and reduction or loss of
rents.
Utility Revenue Bonds. Certain of the Securities are obligations of issuers
whose revenues are primarily derived from the sale of energy. Utilities are
generally subject to extensive regulation by state utility commissions which,
among other things, establish the rates which may be charged and the
appropriate rate of return on an approved asset base. The problems faced by
such issuers include the difficulty in obtaining approval for timely and
adequate rate increases from the governing public utility commission, the
difficulty in financing large construction programs, the limitations on
operations and increased costs and delays attributable to environmental
considerations, increased competition, recent reductions in estimates of
future demand for electricity in certain areas of the country, the difficulty
of the capital market in absorbing utility debt, the difficulty in obtaining
fuel at reasonable prices and the effect of energy conservation. All of such
issuers have been experiencing certain of these problems in varying degrees.
In addition, Federal, state and municipal governmental authorities may from
time to time review existing legislation and impose additional regulations
governing the licensing, construction and operation of nuclear power plants,
which may adversely affect the ability of the issuers of such bonds to make
payments of principal and/or interest on such bonds.
Water and Sewerage Revenue Bonds. Certain of the Securities are considered
water and sewerage revenue bonds. Water and sewerage revenue bonds are
obligations of issuers whose revenues are derived from the sale of water
and/or sewerage services. Water and sewerage bonds are generally payable from
user fees. Problems faced by such issuers include the ability to obtain timely
and adequate rate increases, population decline resulting in decreased user
fees, the difficulty of financing large construction programs, the limitations
on operations and increased costs and delays attributable to environmental
considerations, the increasing difficulty of obtaining or discovering new
supplies of fresh water, the effect of conservation programs and the impact of
"no-growth" zoning ordinances. All of such issuers have been experiencing
certain of these problems in varying degrees.
Page 16
Insurance Risk. Certain of the Securities held by the Trust are covered by
insurance policies obtained by the issuers or underwriters of the bonds from
insurance companies. The "Schedule of Investments" identifies the insurers of
such Securities. Insurance guarantees the timely payment, when due, of all
principal and interest on the insured Securities. Such insurance is effective
so long as the insured Security is outstanding and the insurer remains in
business. Insurance relates only to the particular Security and not to the
Units offered hereby or to their market value. Insured Securities have
received the rating described in the "Schedule of Investments" by Standard &
Poor's, if any, in recognition of such insurance. There can be no assurance
that any insurer listed will be able to satisfy its commitments in the event
claims are made in the future. Certain significant providers of insurance for
municipal securities have recently incurred significant losses as a result of
exposure to sub-prime mortgages and other lower credit quality investments
that have experienced recent defaults or otherwise suffered extreme credit
deterioration. As a result, such losses have reduced the insurers' capital and
called into question their continued ability to perform their obligations
under such insurance if they are called upon to do so in the future. While an
insured municipal security will typically be deemed to have the rating of its
insurer, if the insurer of a municipal security suffers a downgrade in its
credit rating or the market discounts the value of the insurance provided by
the insurer, the rating of the underlying municipal security will be more
relevant and the value of the municipal security would more closely, if not
entirely, reflect such rating. In such a case, the value of insurance
associated with a municipal security would decline and may not add any value.
Insurance companies are subject to extensive regulation and supervision where
they do business by state insurance commissioners who regulate the standards
of solvency which must be maintained, the nature of and limitations on
investments, reports of financial condition, and requirements regarding
reserves for unearned premiums, losses and other matters. A significant
portion of the assets of insurance companies is required by law to be held in
reserve against potential claims on policies and is not available to general
creditors. Although the federal government does not regulate the business of
insurance, federal initiatives including pension regulation, controls on
medical care costs, minimum standards for no-fault automobile insurance,
national health insurance, tax law changes affecting life insurance companies
and repeal of the antitrust exemption for the insurance business can
significantly impact the insurance business.
Because the insurance on the Securities, if any, will be effective so long as
the Securities are outstanding, such insurance will be taken into account in
determining the market value of the Securities and therefore, some value
attributable to such insurance will be included in the value of the Units of
the Trust. The insurance does not, however, guarantee the market value of the
Securities or of the Units.
Discount Bonds. Discount bonds are bonds which have been acquired at a market
discount from par value at maturity. The coupon interest rates on the discount
bonds at the time they were purchased and deposited in the Trust were lower
than the current market interest rates for newly issued bonds of comparable
rating and type. The market discount on previously issued bonds will increase
when interest rates for newly issued comparable bonds increase and decrease
when such interest rates fall, other things being equal. A discount bond held
to maturity will have a larger portion of its total return in the form of
taxable income and capital gain and less in the form of tax-exempt interest
income than a comparable bond newly issued at current market rates. See "Tax
Status."
On sale or redemption, Unit holders may receive ordinary income dividends from
the Trust if the Trust sells or redeems bonds that were acquired at a market
discount, or sells bonds at a short-term capital gain. In general, the
Internal Revenue Service will treat bonds as market discount bonds when the
cost of the bond, plus any original issue discount that has not yet accrued,
is less than the amount due to be paid at the maturity of the bond. Any gain
realized that is in excess of the earned portion of original issue discount
will be taxable as capital gain unless the gain is attributable to market
discount in which case the accretion of market discount is taxable as ordinary
income.
Premium Bonds. Premium bonds are bonds which have been acquired at a market
premium from par value at maturity. The coupon interest rates on the premium
bonds at the time they were purchased and deposited in the Trust were higher
than the current market interest rates for newly issued bonds of comparable
rating and type. The current returns of such bonds are initially higher than
the current returns of comparable bonds issued at currently prevailing
interest rates because premium bonds tend to decrease in market value as they
approach maturity when the face amount becomes payable. Because part of the
purchase price is thus returned not at maturity but through current income
payments, early redemption of a premium bond at par or early prepayments of
principal will result in a reduction in yield. Redemptions are more likely to
Page 17
occur at times when the bonds have an offering side valuation which represents
a premium over par, or for original issue discount bonds, a premium over the
accreted value. To the extent that the Securities were deposited in the Trust
at a price higher than the price at which they are redeemed, this will
represent a loss of capital when compared to the original Public Offering
Price of the Units. The Trust may be required to sell zero coupon bonds prior
to maturity (at their current market price which is likely to be less than
their par value) in order to pay expenses of the Trust or in case the Trust is
terminated. See "Removing Securities from the Trust" and "Amending or
Terminating the Indenture."
Interest Rate Risk. Interest rate risk is the risk that the value of the
securities held by the Funds held by the Trust will fall if interest rates
increase. Securities typically fall in value when interest rates rise and rise
in value when interest rates fall. Securities with longer periods before
maturity are often more sensitive to interest rate changes. The Federal
Reserve has recently raised interest rates and expects to continue to do so in
response to inflation. Therefore, risks associated with rising rates are
heightened for the securities held by the Funds.
Credit Risk. Credit risk is the risk that a security's issuer is unable or
unwilling to make dividend, interest or principal payments when due and the
related risk that the value of a security may decline because of concerns
about the issuer's ability or willingness to make such payments.
Call Risk. Call risk is the risk that the issuer prepays or "calls" a bond
before its stated maturity. An issuer might call a bond if interest rates fall
and the bond pays a higher than market interest rate or if the issuer no
longer needs the money for its original purpose. If an issuer calls a bond,
the Trust will distribute the principal to you but your future interest
distributions will fall. You might not be able to reinvest this principal in
another investment with as high a yield. A bond's call price could be less
than the price the Trust paid for the bond and could be below the bond's par
value. This means you could receive less than the amount you paid for your
Units. The Trust contains bonds that have "make whole" call options that
generally cause the bonds to be redeemable at any time at a designated price.
Such bonds are generally more likely to be subject to early redemption and may
result in the reduction of income received by the Trust. If enough bonds in
the Trust are called, the Trust could terminate early.
Extension Risk. If interest rates rise, certain obligations may be paid off by
the obligor at a slower rate than expected, which will cause the value of such
obligations to fall.
Prepayment Risk. Many types of debt instruments are subject to prepayment
risk, which is the risk that the issuer will repay principal prior to the
maturity date. Debt instruments allowing prepayment may offer less potential
for gains during a period of declining interest rates.
Valuation Risk. Unlike publicly traded securities that trade on national
securities exchanges, there is no central place or exchange for trading most
debt securities. Debt securities generally trade on an "over-the-counter"
market. Due to the lack of centralized information and trading, the valuation
of debt securities may carry more uncertainty and risk than that of publicly
traded securities. Accordingly, determinations of the fair value of debt
securities may be based on infrequent and dated information. Also, because the
available information is less reliable and more subjective, elements of
judgment may play a greater role in valuation of debt securities than for
other types of securities.
Bond Quality Risk. Bond quality risk is the risk that a bond will fall in
value if a rating agency decreases the bond's rating.
Liquidity Risk. Liquidity risk is the risk that the value of a bond will fall
if trading in the bond is limited or absent. No one can guarantee that a
liquid trading market will exist for any bond because these bonds generally
trade in the over-the-counter market (they are not listed on a securities
exchange). During times of reduced market liquidity, the Trust may not be able
to sell Securities readily at prices reflecting the values at which the
Securities are carried on the Trust's books. Sales of large blocks of
securities by market participants, such as the Trust, that are seeking
liquidity can further reduce security prices in an illiquid market.
Cybersecurity Risk. As the use of Internet technology has become more
prevalent in the course of business, the Trust has become more susceptible to
potential operational risks through breaches in cybersecurity. A breach in
cybersecurity refers to both intentional and unintentional events that may
cause the Trust to lose proprietary information, suffer data corruption or
lose operational capacity. Such events could cause the Sponsor of the Trust to
incur regulatory penalties, reputational damage, additional compliance costs
associated with corrective measures and/or financial loss. Cybersecurity
breaches may involve unauthorized access to digital information systems
utilized by the Trust through "hacking" or malicious software coding, but may
also result from outside attacks such as denial-of-service attacks through
efforts to make network services unavailable to intended users. In addition,
cybersecurity breaches of the Trust's third-party service providers, or
Page 18
issuers in which the Trust invests, can also subject the Trust to many of the
same risks associated with direct cybersecurity breaches. The Sponsor of, and
third-party service provider to, the Trust have established risk management
systems designed to reduce the risks associated with cybersecurity. However,
there is no guarantee that such efforts will succeed, especially because the
Trust does not directly control the cybersecurity systems of issuers or third-
party service providers.
Legislation/Litigation. From time to time, various legislative initiatives are
proposed which may have a negative impact on the prices of certain of the
municipal bonds represented in the Trust. Any legislation that proposes to
reduce or eliminate the exemption of interest on municipal bonds from federal
income taxation would negatively impact the value of the municipal bonds held
by the Trust. In addition, litigation regarding any of the issuers of the
municipal bonds, such as litigation affecting the validity of certain
municipal bonds or the tax-free nature of the interest thereon, may negatively
impact the value of these Securities. We cannot predict what impact any
pending or proposed legislation or pending or threatened litigation will have
on the value of the Securities or on the issuers thereof.
Public Offering
The Public Offering Price.
Units will be purchased at the Public Offering Price, the price per Unit of
which is comprised of the following:
- The aggregate underlying value of the Securities;
- The amount of any cash in the Interest and Principal Accounts of the Trust;
- Net interest accrued but unpaid on the Securities after the First Settlement
Date to the date of settlement; and
- The sales charge.
The price you pay for your Units will differ from the amount stated under
"Summary of Essential Information" due to various factors, including
fluctuations in the offering prices of the Securities, changes in the value of
the Interest and/or Principal Accounts and the accrual of interest on the
Securities.
Although you are not required to pay for your Units until two business days
following your order (the "date of settlement"), you may pay before then. You
will become the owner of Units ("Record Owner") on the date of settlement if
payment has been received. If you pay for your Units before the date of
settlement, we may use your payment during this time and it may be considered
a benefit to us, subject to the limitations of the Securities Exchange Act of
1934, as amended.
Organization Costs. Cash which comprises the portion of the Public Offering
Price intended to be used to reimburse the Sponsor for the Trust's
organization costs (including costs of preparing the registration statement,
the Indenture and other closing documents, registering Units with the SEC and
states, the initial audit of the Trust's statement of net assets, legal fees
and the initial fees and expenses of the Trustee) has been included in the
Trust. The Sponsor will be reimbursed for the Trust's organization costs at
the end of the initial offering period (a significantly shorter time period
than the life of the Trust). To the extent actual organization costs are less
than the estimated amount, only the actual organization costs will be deducted
from the assets of the Trust.
Accrued Interest.
Accrued interest represents unpaid interest on a bond from the last day it
paid interest. Interest on the Securities generally is paid semiannually,
although the Trust accrues such interest daily. Because the Trust always has
an amount of interest earned but not yet collected, the Public Offering Price
of Units will have added to it the proportionate share of accrued interest to
the date of settlement. You will receive the amount, if any, of accrued
interest you paid for on the next Distribution Date. In addition, if you sell
or redeem your Units you will be entitled to receive your proportionate share
of accrued interest from the purchaser of your Units.
Minimum Purchase.
The minimum amount per account you can purchase of the Trust is generally
$1,000 worth of Units ($1,000 if you are purchasing Units for your Individual
Retirement Account or any other qualified retirement plan), but such amounts
may vary depending on your selling firm.
Sales Charges.
Initial Offering Period. The maximum sales charge during the initial offering
period equals 2.50% of the Public Offering Price (equivalent to 2.564% of the
net amount invested).
Secondary Market. The maximum sales charge during the secondary market is
determined based upon the number of years remaining to the maturity of each
Security in the Trust, but in no event will the secondary market sales charge
exceed 3.75% of the Public Offering Price (equivalent to 3.896% of the net
amount invested). For purposes of computation, Securities will be deemed to
mature either on their expressed maturity dates, or an earlier date if: (a)
they have been called for redemption or funds have been placed in escrow to
redeem them on an earlier call date; or (b) such Securities are subject to a
"mandatory tender." The effect of this method of sales charge computation will
Page 19
be that different sales charge rates will be applied to each of the
Securities, in accordance with the following schedule:
Secondary
Market
Years to Maturity Sales Charge
__________________________________________________________
Less than 3 1.50%
3 but less than 6 2.25%
6 but less than 9 2.75%
9 but less than 12 3.25%
12 or more 3.75%
Discounts for Certain Persons.
The maximum sales charge is 2.50% per Unit and the maximum dealer concession
is 1.60% per Unit.
If you are purchasing Units for an investment account, the terms of which
provide that your registered investment advisor or registered broker/dealer
(a) charges periodic fees in lieu of commissions; (b) charges for financial
planning, investment advisory or asset management services; or (c) charges a
comprehensive "wrap fee" or similar fee for these or comparable services ("Fee
Accounts"), you will purchase Units subject to a sales charge of 0.60% of the
Public Offering Price (equivalent to 0.604% of the net amount invested). These
Units will be designated as Fee Account Units and assigned a Fee Account CUSIP
Number. Certain Fee Account Unit holders may be assessed transaction or other
account fees on the purchase and/or redemption of such Units by their
registered investment advisor, broker/dealer or other processing organizations
for providing certain transaction or account activities. 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.
Employees, officers and directors (and immediate family members) of the
Sponsor, our related companies, and dealers and their affiliates will purchase
Units at the Public Offering Price less the applicable dealer concession,
subject to the policies of the related selling firm. Immediate family members
include spouses, or the equivalent if recognized under local law, children or
step-children under the age of 21 living in the same household, parents or
step-parents and trustees, custodians or fiduciaries for the benefit of such
persons. Only employees, officers and directors of companies that allow their
employees to participate in this employee discount program are eligible for
the discounts.
The Value of the Securities.
The Sponsor will appraise the aggregate underlying value of the Securities in
the Trust as of the Evaluation Time on each business day and will adjust the
Public Offering Price of the Units according to this valuation. This Public
Offering Price will be effective for all orders received before the Evaluation
Time on each such day. If we or the Trustee receive orders for purchases,
sales or redemptions after that time, or on a day which is not a business day,
they will be held until the next determination of price. The term "business
day" as used in this prospectus shall mean any day on which the NYSE is open.
For purposes of Securities and Unit settlement, the term business day does not
include days on which U.S. financial institutions are closed.
The aggregate underlying value of the Securities in the Trust will be
determined as follows:
a) On the basis of current market offering prices for the Securities obtained
from dealers or brokers who customarily deal in bonds comparable to those held
by the Trust, which may reflect odd-lot pricing where appropriate;
b) If such prices are not available for any of the Securities, on the basis of
current market offering prices of comparable bonds;
c) By determining the value of the Securities on the offering side of the
market by appraisal; or
d) By any combination of the above.
After the initial offering period is over, the aggregate underlying value of
the Securities will be determined as set forth above, except that bid prices
are used instead of ask prices when necessary. The offering price of the
Securities may be expected to be greater than their bid price by approximately
1-3% of the aggregate principal amount of such Securities.
Distribution of Units
We intend to qualify Units of the Trust for sale in a number of states. All
Units will be sold at the current Public Offering Price.
The Sponsor compensates intermediaries, such as broker/dealers and banks, for
their activities that are intended to result in sales of Units of the Trust.
This compensation includes dealer concessions described in the following
section and may include additional concessions and other compensation and
benefits to broker/dealers and other intermediaries.
Dealer Concessions.
Dealers and other selling agents can purchase Units at prices which represent
a concession or agency commission of 1.60% per Unit during the Initial
Offering Period (80% of the maximum sales charge for secondary market sales),
Page 20
but will not receive a concession or agency commission on the sale of Fee
Account Units.
Underwriters other than the Sponsor will sell Units to other broker-dealer and
selling agents (including the Sponsor) at the Public Offering Price less a
concession or agency commission not in excess of a maximum concession of 1.70%.
Eligible dealer firms and other selling agents who, during the previous
consecutive 12-month period through the end of the most recent month, sold
primary market units of unit investment trusts sponsored by us in the dollar
amounts shown below will be entitled to up to the following additional sales
concession on primary market sales of units during the current month of unit
investment trusts sponsored by us:
Total sales Additional
(in millions) Concession
___________________________________________________
$25 but less than $100 0.035%
$100 but less than $150 0.050%
$150 but less than $250 0.075%
$250 but less than $1,000 0.100%
$1,000 but less than $5,000 0.100%
$5,000 but less than $7,500 0.100%
$7,500 or more 0.100%
Dealers and other selling agents will not receive a concession on the sale of
Fee Account Units, but such Units will be included in determining whether the
above volume sales levels are met. Eligible dealer firms and other selling
agents include clearing firms that place orders with First Trust and provide
First Trust with information with respect to the representatives who initiated
such transactions. Eligible dealer firms and other selling agents will not
include firms that solely provide clearing services to other broker/dealer
firms or firms who place orders through clearing firms that are eligible
dealers. We reserve the right to change the amount of concessions or agency
commissions from time to time. Certain commercial banks may be making Units of
the Trust available to their customers on an agency basis. A portion of the
sales charge paid by these customers is kept by or given to the banks in the
amounts shown above.
Other Compensation and Benefits to Broker/Dealers.
The Sponsor, at its own expense and out of its own profits, currently provides
additional compensation and benefits to broker/dealers who sell Units of this
Trust and other First Trust products. This compensation is intended to result
in additional sales of First Trust products and/or compensate broker/dealers
and financial advisors for past sales. A number of factors are considered in
determining whether to pay these additional amounts. Such factors may include,
but are not limited to, the level or type of services provided by the
intermediary, the level or expected level of sales of First Trust products by
the intermediary or its agents, the placing of First Trust products on a
preferred or recommended product list, access to an intermediary's personnel,
and other factors. The Sponsor makes these payments for marketing, promotional
or related expenses, including, but not limited to, expenses of entertaining
retail customers and financial advisors, advertising, sponsorship of events or
seminars, obtaining information about the breakdown of unit sales among an
intermediary's representatives or offices, obtaining shelf space in
broker/dealer firms and similar activities designed to promote the sale of the
Sponsor's products. The Sponsor makes such payments to a substantial majority
of intermediaries that sell First Trust products. The Sponsor may also make
certain payments to, or on behalf of, intermediaries to defray a portion of
their costs incurred for the purpose of facilitating Unit sales, such as the
costs of developing or purchasing trading systems to process Unit trades.
Payments of such additional compensation described in this and the preceding
paragraph, some of which may be characterized as "revenue sharing," create a
conflict of interest by influencing financial intermediaries and their agents
to sell or recommend a First Trust product, including the Trust, over products
offered by other sponsors or fund companies. These arrangements will not
change the price you pay for your Units.
Advertising and Investment Comparisons.
Advertising materials regarding the Trust may discuss several topics,
including: developing a long-term financial plan; working with your financial
professional; the nature and risks of various investment strategies and unit
investment trusts that could help you reach your financial goals; the
importance of discipline; how the Trust operates; how securities are selected;
various unit investment trust features such as convenience and costs; and
options available for certain types of unit investment trusts. These materials
may include descriptions of the principal businesses of the companies
represented in the Trust, research analysis of why they were selected and
information relating to the qualifications of the persons or entities
providing the research analysis. In addition, they may include research
opinions on the economy and industry sectors included and a list of investment
products generally appropriate for pursuing those recommendations.
From time to time we may compare the estimated returns of the Trust (which may
show performance net of the expenses and charges the Trust would have
Page 21
incurred) and returns over specified periods of other similar trusts we
sponsor in our advertising and sales materials, with (1) returns on other
taxable investments such as the common stocks comprising various market
indexes, corporate or U.S. Government bonds, bank CDs and money market
accounts or funds, (2) performance data from Morningstar, Inc. or (3)
information from publications such as Money, The New York Times, U.S. News and
World Report, Bloomberg Businessweek, Forbes or Fortune. The investment
characteristics of the Trust differ from other comparative investments. You
should not assume that these performance comparisons will be representative of
the Trust's future performance. We may also, from time to time, use
advertising which classifies trusts or portfolio securities according to
capitalization and/or investment style.
Underwriting Concessions
The Agreement Among Underwriters provides that a public offering of the Units
of each Trust will be made at the Public Offering Price described in the
prospectus. Units may also be sold to or through dealers and other selling
agents during the initial offering period and in the secondary market at
prices representing a concession or agency commission as described in
"Distribution of Units."
The Sponsor will sell Units of the Trust to Underwriters on the Initial Date
of Deposit at the Public Offering Price per Unit less a concession of 1.85%
per Unit underwritten, based on a minimum underwriting of 1,000 Units.
Underwriting concessions also apply on a dollar basis using a $1,000 Unit
equivalent and will be applied on whichever basis is more favorable to the
Underwriter. In addition, Underwriters that underwrite at least 3,000 Units
will receive a volume concession of up to 0.100% on the Units actually
underwritten, but are not eligible to receive the volume concession as
described in "Distribution of Units."
In addition to any other benefits that the Underwriters may realize from the
sale of the Units of the Trust, the Agreement Among Underwriters provides that
the Sponsor will share with the other Underwriters, on a pro rata basis, 50%
of the net gain, if any, represented by the difference between the Sponsor's
cost of the Securities in connection with their acquisition and the Aggregate
Offering Price thereof on the Initial Date of Deposit, less a charge for
acquiring the Securities in the portfolio and for the Sponsor maintaining a
secondary market for the Units.
Underwriting
Number
Name and Address of Units
________________ ________
Underwriter:
StoneX Financial Inc. 12,625
329 Park Avenue North
Suite 350
Winter Park, Florida 32789
______
12,625
======
The Sponsor's Profits
We will receive a gross sales commission equal to the maximum sales charge per
Unit less any reduction as stated in "Public Offering." Also, any difference
between our cost to purchase the Securities and the price at which we sell
them to the Trust is considered a profit or loss (see Note 2 of "Notes to
Schedule of Investments"). During the initial offering period, dealers and
others may also realize profits or sustain losses as a result of fluctuations
in the Public Offering Price they receive when they sell the Units.
In maintaining a market for the Units, any difference between the price at
which we purchase Units and the price at which we sell or redeem them will be
a profit or loss to us.
The Secondary Market
Although not obligated, we may maintain a market for the Units after the
initial offering period and continuously offer to purchase Units at prices
based on the Redemption Price per Unit.
We will pay all expenses to maintain a secondary market, except fees to value
Trust Securities and Trustee costs to transfer and record the ownership of
Units. We may discontinue purchases of Units at any time. IF YOU WISH TO
DISPOSE OF YOUR UNITS, YOU SHOULD ASK US FOR THE CURRENT MARKET PRICES BEFORE
MAKING A TENDER FOR REDEMPTION TO THE TRUSTEE.
How We Purchase Units
The Trustee will notify us of any tender of Units for redemption. If our bid
at that time is equal to or greater than the Redemption Price per Unit, we may
purchase the Units. You will receive your proceeds from the sale no later than
if they were redeemed by the Trustee. We may tender Units we hold to the
Page 22
Trustee for redemption as any other Units. If we elect not to purchase Units,
the Trustee may sell Units tendered for redemption in the over-the-counter
market, if any. However, the amount you will receive is the same as you would
have received on redemption of the Units.
Expenses and Charges
The estimated annual expenses of the Trust are listed under "Fee Table." If
actual expenses of the Trust exceed the estimate, the Trust will bear the
excess. The Trustee will pay operating expenses of the Trust from the Interest
Account of the Trust if funds are available, and then from the Principal
Account. The Interest and Principal Accounts are non-interest-bearing to Unit
holders, so the Trustee may earn interest on these funds, thus benefiting from
their use.
First Trust Advisors L.P., an affiliate of ours, acts as Portfolio Supervisor
and will be compensated for providing portfolio supervisory services as well
as bookkeeping and other administrative services to the Trust. In providing
portfolio supervisory services, the Portfolio Supervisor may purchase research
services from a number of sources, which may include underwriters or dealers
of the Trust. In addition, the Portfolio Supervisor may, at its own expense,
employ one or more sub-Portfolio Supervisors to assist in providing services
to the Trust. As Sponsor, we will be compensated for providing evaluation
services and we will receive brokerage fees when the Trust uses us (or an
affiliate of ours) as agent in buying or selling Securities. As authorized by
the Indenture, the Trustee may employ a subsidiary or affiliate of the Trustee
to act as broker to execute certain transactions for the Trust. The Trust will
pay for such services at standard commission rates.
The fees payable to the Sponsor, First Trust Advisors L.P. and the Trustee are
based on the largest aggregate number of Units of the Trust outstanding at any
time during the calendar year, except during the initial offering period, in
which case these fees are calculated based on the largest number of Units
outstanding during the period for which compensation is paid. These fees may
be adjusted for inflation without Unit holders' approval, but in no case will
the annual fees paid to us or our affiliate for providing services to all unit
investment trusts be more than the actual cost of providing such services in
such year.
In addition to the Trust's operating expenses, and the fees set forth above,
the Trust may also incur the following charges:
- All legal expenses of the Trustee according to its responsibilities under
the Indenture;
- The expenses and costs incurred by the Trustee to protect the Trust and your
rights and interests (i.e., participating in litigation concerning a portfolio
security) and the costs of indemnifying the Trustee;
- Fees for any extraordinary services the Trustee performed under the Indenture;
- Payment for any loss, liability or expense the Trustee incurred without
negligence, bad faith or willful misconduct on its part, in connection with
its acceptance or administration of the Trust;
- Payment for any loss, liability or expenses we incurred without negligence,
bad faith or willful misconduct in acting as Sponsor of the Trust; and/or
- All taxes and other government charges imposed upon the Securities or any
part of the Trust.
The above expenses and the Trustee's annual fee are secured by a lien on the
Trust. In addition, if there is not enough cash in the Interest or Principal
Account, the Trustee has the power to sell Securities to make cash available
to pay these charges. These sales may result in capital gains or losses to the
Unit holders. See "Tax Status."
Tax Status
Federal Tax Matters.
This section discusses some of the main U.S. federal income tax consequences
of owning Units of the Trust as of the date of this prospectus. Tax laws and
interpretations change frequently, and this summary does not describe all of
the tax consequences to all taxpayers. For example, this summary generally
does not describe your situation if you are a broker/dealer or other investor
with special circumstances. In addition, this section may not describe your
state, local or non-U.S. tax consequences.
This federal income tax summary is based in part on the advice of counsel to
the Sponsor. The Internal Revenue Service ("IRS") could disagree with any
conclusions set forth in this section. In addition, our counsel may not have
been asked to review, and may not have reached a conclusion with respect to
the federal income tax treatment of the assets to be deposited in the Trust.
This summary may not be sufficient for you to use for the purpose of avoiding
penalties under federal tax law.
As with any investment, you should seek advice based on your individual
circumstances from your own tax advisor.
Page 23
Trust Status.
Unit investment trusts maintain both Interest and Principal Accounts,
regardless of tax structure. Please refer to the "Income and Capital
Distributions" section of the prospectus for more information.
The Trust intends to qualify as a "regulated investment company," commonly
known as a "RIC," under the federal tax laws. If the Trust qualifies as a RIC
and distributes its income as required by the tax law, the Trust generally
will not pay federal income taxes. For federal income tax purposes, you are
treated as the owner of the Trust Units and not of the assets held by the Trust.
Income from the Trust.
After the end of each year, you will receive a tax statement that separates
the Trust's distributions into ordinary income dividends, capital gain
dividends, exempt-interest dividends and return of capital. Income that is
categorized as exempt-interest dividends generally is excluded from your gross
income for federal income tax purposes. Some or all of the exempt-interest
dividends may be taken into account for alternative minimum tax purposes and
may have other tax consequences. Income reported is generally net of expenses
(but see "Treatment of Trust Expenses" below). Ordinary income dividends are
generally taxed at your ordinary income tax rate. Generally, all capital gain
dividends are treated as long-term capital gains regardless of how long you
have owned your Units. In addition, the Trust may make distributions that
represent a return of capital for tax purposes and will generally not be
currently taxable to you, although they generally reduce your tax basis in
your Units and thus increase your taxable gain or decrease your loss when you
dispose of your Units. The tax laws may require you to treat distributions
made to you in January as if you had received them on December 31 of the
previous year.
Some distributions from the Trust may qualify as long-term capital gains,
which, if you are an individual, is generally taxed at a lower rate than your
ordinary income and short-term capital gain income. The distributions from the
Trust that you must take into account for federal income tax purposes are not
reduced by the amount used to pay a deferred sales charge, if any.
Distributions from the Trust, including capital gains but not exempt-interest
dividends, may also be subject to a "Medicare tax" if your adjusted gross
income exceeds certain threshold amounts.
The Trust may be required to recognize income on some of its investments
without receiving cash in exchange for the investments. The Trust would still
be required to make distributions to maintain its RIC status, so depending
upon the circumstances, some assets of the Trust may need to be sold to fund
the required distributions.
Sale of Units.
If you sell your Units (whether to a third party or to the Trust), you will
generally recognize a taxable gain or loss. To determine the amount of this
gain or loss, you must subtract your (adjusted) tax basis in your Units from
the amount you receive from the sale. Your original tax basis in your Units is
generally equal to the cost of your Units, including sales charges. In some
cases, however, you may have to adjust your tax basis after you purchase your
Units, in which case your gain would be calculated using your adjusted basis.
The tax statement you receive in regard to the sale or redemption of your
Units may contain information about your basis in the Units and whether any
gain or loss recognized by you should be considered long-term or short-term
capital gain. The information reported to you is based upon rules that do not
take into consideration all of the facts that may be known to you or to your
advisors. You should consult with your tax advisor about any adjustments that
may need to be made to the information reported to you in determining the
amount of your gain or loss.
Treatment of Trust Expenses.
Expenses incurred and deducted by the Trust will generally not be treated as
income taxable to you. In some cases, however, you may be required to treat
your portion of these Trust expenses as income. You may not be able to take a
deduction for some or all of these expenses even if the cash you receive is
reduced by such expenses.
Non-U.S. Investors.
If you are a non-U.S. investor, distributions from the Trust treated as
dividends will generally be subject to a U.S. withholding tax of 30% of the
distribution. Certain dividends, such as capital gains dividends, short-term
capital gains dividends, and distributions that are attributable to exempt-
interest income or certain other interest income, may not be subject to U.S.
withholding taxes. In addition, some non-U.S. investors may be eligible for a
reduction or elimination of U.S. withholding taxes under a treaty. However,
the qualification for those exclusions may not be known at the time of the
distribution.
Separately, the United States, pursuant to the Foreign Account Tax Compliance
Act ("FATCA") imposes a 30% tax on certain non-U.S. entities that receive U.S.
source interest or dividends if the non-U.S. entity does not comply with
certain U.S. disclosure and reporting requirements. This FATCA tax also
Page 24
currently applies to the gross proceeds from the disposition of securities
that produce U.S. source interest or dividends. However, proposed regulations
may eliminate the requirement to withhold on payments of gross proceeds from
dispositions.
It is the responsibility of the entity through which you hold your Units to
determine the applicable withholding.
You should consult your tax advisor regarding potential foreign, state or
local taxation with respect to your Units.
Rights of Unit Holders
Unit Ownership.
Ownership of Units will not be evidenced by certificates. If you purchase or
hold Units through a broker/dealer or bank, your ownership of Units will be
recorded in book-entry form at the Depository Trust Company ("DTC") and
credited on its records to your broker/dealer's or bank's DTC account.
Transfer of Units will be accomplished by book entries made by DTC and its
participants if the Units are registered to DTC or its nominee, Cede & Co. DTC
will forward all notices and credit all payments received in respect of the
Units held by the DTC participants. You will receive written confirmation of
your purchases and sales of Units from the broker/dealer or bank through which
you made the transaction. You may transfer your Units by contacting the
broker/dealer or bank through which you hold your Units.
Unit Holder Reports.
The Trustee will prepare a statement detailing the per Unit amounts (if any)
distributed from the Interest Account and Principal Account in connection with
each distribution. In addition, at the end of each calendar year, the Trustee
will prepare a statement which contains the following information:
- A summary of transactions in the Trust for the year;
- A list of any Securities sold during the year and the Securities held at the
end of that year by the Trust;
- The Redemption Price per Unit, computed on the 31st day of December of such
year (or the last business day before); and
- Amounts of income and capital distributed during the year.
By February 15th yearly, the Annual Reports are posted to the Sponsor's
website (www.ftportfolios.com) in the UIT Tax Center and retrievable by CUSIP.
You may also request one be sent to you by calling the Sponsor at 800-621-
1675, dept. code 2. In addition, you may also request from the Trustee copies
of the evaluations of the Securities as prepared by the Sponsor to enable you
to comply with applicable federal and state tax reporting requirements.
Income and Capital Distributions
You will begin receiving distributions on your Units only after you become a
Record Owner. The Trustee will credit interest received on the Trust's
Securities to the Interest Account of the Trust. All other receipts, such as
return of capital or capital gain dividends, are credited to the Principal
Account of the Trust.
After deducting the amount of accrued interest the Trustee advanced to us as
Unit holder of record as of the First Settlement Date, the Trustee will
distribute to Unit holders of record on the next and each following
Distribution Record Date an amount of income substantially equal to their pro
rata share of the balance of the Interest Account calculated on the basis of
the interest accrued per Unit on the Securities from and including the
preceding Distribution Record Date, after deducting estimated expenses. The
amount of the initial distribution of income from the Interest Account will be
prorated based on the number of days in the first payment period. Because
interest is not received by the Trust at a constant rate throughout the year,
the distributions you receive may be more or less than the amount credited to
the Interest Account as of the Distribution Record Date. In order to minimize
fluctuations in distributions, the Trustee is authorized to advance such
amounts as may be necessary to provide distributions of approximately equal
amounts. The Trustee will be reimbursed, without interest, for any such
advances from funds in the Interest Account at the next Distribution Record
Date to the extent funds available exceed the amount required for
distribution. The Trustee will distribute capital from the Principal Account
on the twenty-fifth day of each month to Unit holders of record on the tenth
day of each month provided the amount equals at least $1.00 per Unit. In any
case, the Trustee may distribute funds in the Principal Account in December of
each year to avoid imposition of any income or excise taxes on undistributed
income in the Trust and will distribute funds as part of the final liquidation
distribution. However, amounts in the Principal Account from the sale of
Securities designated to meet redemptions of Units or pay expenses will not be
distributed.
If an Interest or Principal Account distribution date is a day on which the
NYSE is closed, the distribution will be made on the next day the stock
exchange is open. Distributions are paid to Unit holders of record determined
as of the close of business on the Record Date for that distribution or, if
Page 25
the Record Date is a day on which the NYSE is closed, the first preceding day
on which the exchange is open.
Within a reasonable time after the Trust is terminated you will receive the
pro rata share of the money from the sale of the Securities and amounts in the
Interest and Principal Accounts. All Unit holders will receive a pro rata
share of any other assets remaining in the Trust after deducting any unpaid
expenses.
The Trustee may establish reserves (the "Reserve Account") within the Trust to
cover anticipated state and local taxes or any governmental charges to be paid
out of the Trust.
Redeeming Your Units
You may redeem all or a portion of your Units at any time by sending a request
for redemption to your broker/dealer or bank through which you hold your
Units. No redemption fee will be charged, but you are responsible for any
governmental charges that apply. Certain broker/dealers may charge a
transaction fee for processing redemption requests. Two business days after
the day you tender your Units (the "Date of Tender") you will receive cash in
an amount for each Unit equal to the Redemption Price per Unit calculated at
the Evaluation Time on the Date of Tender.
The Date of Tender is considered to be the date on which your redemption
request is received by the Trustee from the broker/dealer or bank through
which you hold your Units (if such day is a day the NYSE is open for trading).
However, if the redemption request is received after 4:00 p.m. Eastern time
(or after any earlier closing time on a day on which the NYSE is scheduled in
advance to close at such earlier time), the Date of Tender is the next day the
NYSE is open for trading.
Any amounts paid on redemption representing interest will be withdrawn from
the Interest Account if funds are available for that purpose, or from the
Principal Account. All other amounts paid on redemption will be taken from the
Principal Account.
The Trustee may sell Securities in the Trust to make funds available for
redemption. If Securities are sold, the size and diversification of the Trust
will be reduced. These sales may result in lower prices than if the Securities
were sold at a different time.
Your right to redeem Units (and therefore, your right to receive payment) may
be delayed:
- If the NYSE is closed (other than customary weekend and holiday closings);
- If the SEC determines that trading on the NYSE is restricted or that an
emergency exists making sale or evaluation of the Securities not reasonably
practical; or
- For any other period permitted by SEC order.
The Trustee is not liable to any person for any loss or damage which may
result from such a suspension or postponement.
The Redemption Price.
The Redemption Price per Unit is determined by the Trustee by:
adding
1. cash in the Interest and Principal Accounts of the Trust not designated to
purchase Securities;
2. the aggregate underlying value of the Securities held in the Trust; and
3. accrued interest on the Securities; and
deducting
1. any applicable taxes or governmental charges that need to be paid out of
the Trust;
2. any amounts owed to the Trustee for its advances;
3. estimated accrued expenses of the Trust, if any;
4. cash held for distribution to Unit holders of record of the Trust as of the
business day before the evaluation being made;
5. liquidation costs for foreign Securities, if any; and
6. other liabilities incurred by the Trust; and
dividing
1. the result by the number of outstanding Units of the Trust.
Until they are collected, the Redemption Price per Unit will include estimated
organization costs as set forth under "Fee Table."
Removing Securities from the Trust
The portfolio of the Trust is not managed. However, we may, but are not
required to, direct the Trustee to dispose of a Security in certain limited
circumstances, including situations in which:
- The issuer of the Security has defaulted in the payment of principal or
interest on the Security;
- Any action or proceeding seeking to restrain or enjoin the payment of
principal or interest on the Security has been instituted;
- There is any legal question or impediment affecting the Security;
- The issuer of the Security has breached a covenant which would affect the
payment of principal or interest on the Security, the issuer's credit
standing, or otherwise damage the sound investment character of the Security;
Page 26
- The issuer has defaulted on the payment of any other of its outstanding
obligations;
- The Security is the subject of an advanced refunding;
- The sale of Securities is necessary or advisable (i) in order to maintain
the qualification of the Trust as a "regulated investment company" in the case
of the Trust which has elected to qualify as such or (ii) to provide funds to
make any distribution for a taxable year in order to avoid imposition of any
income or excise taxes on undistributed income in the Trust which is a
"regulated investment company";
- Such factors arise which, in our opinion, adversely affect the tax or
exchange control status of the Security;
- The price of the Security has declined to such an extent, or such other
credit factors exist, that in our opinion keeping the Security would be
harmful to the Trust; or
- The sale of the Security is necessary for the Trust to comply with such
federal and/or state laws, regulations and/or regulatory actions and
interpretations which may be in effect from time to time.
If a Security defaults in the payment of principal or interest and no
provision for payment is made, the Trustee must notify us of this fact. If we
fail to instruct the Trustee whether to sell or hold the Security within 30
days of our being notified, the Trustee may, in its discretion, sell any
defaulted Securities and will not be liable for any depreciation or loss
incurred thereby.
Except for instances in which the Trust acquires Replacement Securities as
described in "The First Trust Combined Series," the Trust will generally not
acquire any bonds or other property other than the Securities. The Trustee, on
behalf of the Trust and at the direction of the Sponsor, will vote for or
against any offer for new or exchanged bonds or property in exchange for a
Security. In that regard, we may instruct the Trustee to accept such an offer
or to take any other action with respect thereto as we may deem proper if the
issuer is in default with respect to such Securities or in our written opinion
the issuer will likely default in respect to such Securities in the
foreseeable future. Any obligations received in exchange or substitution will
be held by the Trustee subject to the terms and conditions in the Indenture to
the same extent as Securities originally deposited in the Trust. We may get
advice from the Portfolio Supervisor before reaching a decision regarding the
receipt of new or exchange securities or property. The Trustee may retain and
pay us or an affiliate of ours to act as agent for the Trust to facilitate
selling Securities, exchanged bonds or property from the Trust. If we or our
affiliate act in this capacity, we will be held subject to the restrictions
under the 1940 Act. When acting in an agency capacity, we may select various
broker/dealers to execute securities transactions on behalf of the Trust,
which may include broker/dealers who sell Units of the Trust. We do not
consider sales of Units of the Trust or any other products sponsored by First
Trust as a factor in selecting such broker/dealers. As authorized by the
Indenture, the Trustee may also employ a subsidiary or affiliate of the
Trustee to act as broker in selling such Securities or property. The Trust
will pay for these brokerage services at standard commission rates.
The Trustee may sell Securities designated by us, or, absent our direction, at
its own discretion, in order to meet redemption requests or pay expenses. We
will maintain a list with the Trustee of which Securities should be sold. We
may consider sales of units of unit investment trusts which we sponsor in
making recommendations to the Trustee on the selection of broker/dealers to
execute the Trust's portfolio transactions, or when acting as agent for the
Trust in acquiring or selling Securities on behalf of the Trust.
Amending or Terminating the Indenture
Amendments. The Indenture may be amended by us and the Trustee without your
consent:
- To cure ambiguities;
- To correct or supplement any defective or inconsistent provision;
- To make any amendment required by any governmental agency; or
- To make other changes determined not to be adverse to your best interests
(as determined by us and the Trustee).
Termination. As provided by the Indenture, the Trust will terminate upon the
redemption, sale or other disposition of the last Security held in the Trust,
but in no case later than the Termination Date as stated in the "Summary of
Essential Information." The Trust may be terminated prior to the Termination
Date:
- Upon the consent of 100% of the Unit holders of the Trust;
- If the value of the Securities owned by the Trust as shown by any evaluation
is less than 20% of the aggregate principal amount of Securities deposited in
Page 27
the Trust during the initial offering period ("Discretionary Liquidation
Amount"); or
- In the event that Units of the Trust not yet sold aggregating more than 60%
of the Units of such Trust are tendered for redemption by underwriters,
including the Sponsor.
If the Trust is terminated due to this last reason, we will refund your entire
sales charge. For various reasons, the Trust may be reduced below the
Discretionary Liquidation Amount and could therefore be terminated before the
Termination Date.
The Trustee will notify you of any termination prior to the Termination Date.
You will receive a cash distribution from the sale of the remaining
Securities, along with your interest in the Interest and Principal Accounts of
the Trust, within a reasonable time after the Trust is terminated. The sale of
Securities upon termination may result in a lower sales price than might
otherwise be realized if the sale were not required at that time. For this
reason, among others, the amount realized by a Unit holder upon termination
may be less than the principal amount of Securities per Unit or value at the
time of purchase. The Trustee will deduct from the Trust any accrued costs,
expenses, advances or indemnities provided for by the Indenture, including
estimated compensation of the Trustee and costs of liquidation and any amounts
required as a reserve to pay any taxes or other governmental charges.
Information on the Sponsor and Trustee
The Sponsor.
We, First Trust Portfolios L.P., specialize in the underwriting, trading and
wholesale distribution of unit investment trusts under the "First Trust" brand
name and other securities. An Illinois limited partnership formed in 1991, we
took over the First Trust product line and act as Sponsor for successive
series of:
- The First Trust Combined Series
- FT Series (formerly known as The First Trust Special Situations Trust)
- The First Trust Insured Corporate Trust
- The First Trust of Insured Municipal Bonds
- The First Trust GNMA
The First Trust product line commenced with the first insured unit investment
trust in 1974. To date we have deposited more than $545 billion in First Trust
unit investment trusts. Our employees include a team of professionals with
many years of experience in the unit investment trust industry.
We are a member of FINRA and SIPC. Our principal offices are at 120 East
Liberty Drive, Wheaton, Illinois 60187; telephone number 800-621-1675. As of
December 31, 2021, the total partners' capital of First Trust Portfolios L.P.
was $125,276,503.
This information refers only to us and not to the Trust or to any series of
the Trust or to any other dealer. We are including this information only to
inform you of our financial responsibility and our ability to carry out our
contractual obligations. We will provide more detailed financial information
on request.
Code of Ethics. The Sponsor and the Trust have adopted a code of ethics
requiring the Sponsor's employees who have access to information on Trust
transactions to report personal securities transactions. The purpose of the
code is to avoid potential conflicts of interest and to prevent fraud,
deception or misconduct with respect to the Trust.
The Trustee.
The Trustee is The Bank of New York Mellon, a trust company organized under
the laws of New York. The Bank of New York Mellon has its unit investment
trust division offices at 240 Greenwich Street, New York, New York 10286,
telephone 800-813-3074. If you have questions regarding your account or your
Trust, please contact the Trustee at its unit investment trust division
offices or your financial advisor. The Sponsor does not have access to
individual account information. The Bank of New York Mellon is subject to
supervision and examination by the Superintendent of the New York State
Department of Financial Services and the Board of Governors of the Federal
Reserve System, and its deposits are insured by the Federal Deposit Insurance
Corporation to the extent permitted by law.
The Trustee has not participated in selecting the Securities; it only provides
administrative services.
Limitations of Liabilities of Sponsor and Trustee.
Neither we nor the Trustee will be liable for taking any action or for not
taking any action in good faith according to the Indenture. We will also not
be accountable for errors in judgment. We will only be liable for our own
willful misfeasance, bad faith, gross negligence (ordinary negligence in the
Trustee's case) or reckless disregard of our obligations and duties. The
Trustee is not liable for any loss or depreciation when the Securities are
sold. If we fail to act under the Indenture, the Trustee may do so, and the
Page 28
Trustee will not be liable for any action it takes in good faith under the
Indenture.
The Trustee will not be liable for any taxes or other governmental charges or
interest on the Securities which the Trustee may be required to pay under any
present or future law of the United States or of any other taxing authority
with jurisdiction. Also, the Indenture states other provisions regarding the
liability of the Trustee.
If we do not perform any of our duties under the Indenture or are not able to
act or become bankrupt, or if our affairs are taken over by public
authorities, then the Trustee may:
- Appoint a successor sponsor, paying them a reasonable rate not more than
that stated by the SEC;
- Terminate the Indenture and liquidate the Trust; or
- Continue to act as Trustee without terminating the Indenture.
The Trustee and Unit holders may rely on the accuracy of any evaluation
prepared by the Sponsor. The Sponsor will make determinations in good faith
based upon the best available information, but will not be liable to the
Trustee or Unit holders for errors in judgment.
Other Information
Legal Opinions.
Our counsel is Chapman and Cutler LLP, 320 S. Canal St., Chicago, Illinois
60606. They have passed upon the legality of the Units offered hereby and
certain matters relating to federal tax law. Carter, Ledyard & Milburn LLP
acts as the Trustee's counsel.
Experts.
The Trust's statement of net assets, including the schedule of investments, as
of the opening of business on the Initial Date of Deposit included in this
prospectus, has been audited by Deloitte & Touche LLP, an independent
registered public accounting firm, as stated in their report appearing herein,
and is included in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
Supplemental Information.
If you write or call the Sponsor, you will receive free of charge supplemental
information about this Series, which has been filed with the SEC and to which
we have referred throughout. This information states more specific risk
information about the Trust.
Description of Bond Ratings*
* As published by Standard & Poor's.
Standard & Poor's.
An S&P Global Ratings' issue credit rating is a forward-looking opinion about
the creditworthiness 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 opinion
reflects S&P Global Ratings' view of the obligor's capacity and willingness to
meet its financial commitments as they come due, and this opinion may assess
terms, such as collateral security and subordination, which could affect
ultimate payment in the event of default.
Issue credit ratings can be either long-term or short-term. Short-term ratings
are generally assigned to those obligations considered short-term in the
relevant market. Short-term ratings are also used to indicate the
creditworthiness of an obligor with respect to put features on long-term
obligations. Medium-term notes are assigned long-term ratings.
Long-Term Issue Credit Ratings.
Issue credit ratings are based, in varying degrees, on S&P Global Ratings'
analysis of the following considerations:
1. The likelihood of payment: the capacity and willingness of the obligor to
meet its financial commitments on an obligation in accordance with the terms
of the obligation;
2. The nature and provisions of the financial obligation, and the promise we
impute; and
3. The protection afforded by, and relative position of, the financial
obligation in the event of a bankruptcy, reorganization, or other arrangement
under the laws of bankruptcy and other laws affecting creditors' rights.
An issue rating is an assessment of default risk, but may incorporate an
assessment of relative seniority or ultimate recovery in the event of default.
Junior obligations are typically rated lower than senior obligations, to
reflect the lower priority in bankruptcy, as noted above. (Such
differentiation may apply when an entity has both senior and subordinated
obligations, secured and unsecured obligations, or operating company and
holding company obligations.)
Page 29
AAA An obligation rated `AAA' has the highest rating assigned by S&P Global
Ratings. The obligor's capacity to meet its financial commitments on the
obligation is extremely strong.
AA An obligation rated `AA' differs from the highest-rated obligations only
to a small degree. The obligor's capacity to meet its financial commitments 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 commitments on the obligation is still strong.
BBB An obligation rated `BBB' exhibits adequate protection parameters.
However, adverse economic conditions or changing circumstances are more likely
to weaken the obligor's capacity to meet its financial commitments 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 that could lead to the
obligor's inadequate capacity to meet its financial commitments 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
commitments on the obligation. Adverse business, financial, or economic
conditions will likely impair the obligor's capacity or willingness to meet
its financial commitments 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 commitments 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 commitments on the obligation.
CC An obligation rated `CC' is currently highly vulnerable to nonpayment. The
`CC' rating is used when a default has not yet occurred but S&P Global Ratings
expects default to be a virtual certainty, regardless of the anticipated time
to default.
C An obligation rated `C' is currently highly vulnerable to nonpayment, and
the obligation is expected to have lower relative seniority or lower ultimate
recovery compared with obligations that are rated higher.
D An obligation rated `D' is in default or in breach of an imputed promise.
For non-hybrid capital instruments, the `D' rating category is used when
payments on an obligation are not made on the date due, unless S&P Global
Ratings believes that such payments will be made within the next five business
days in the absence of a stated grace period or within the earlier of the
stated grace period or the next 30 calendar days. The `D' rating also will be
used upon the filing of a bankruptcy petition or the taking of similar action
and where default on an obligation is a virtual certainty, for example due to
automatic stay provisions. A rating on an obligation is lowered to `D' if it
is subject to a distressed debt restructuring.
Ratings from `AA' to `CCC' may be modified by the addition of a plus (+) or
minus (-) sign to show relative standing within the rating categories.
Expected Ratings are designated on the "Schedule of Investments" by an "(e)"
after the rating code. Expected Ratings are intended to anticipate S&P's
forthcoming rating assignments. Expected Ratings are generated by Bloomberg
based on sources it considers reliable or established S&P rating practices.
Expected Ratings exist only until S&P assigns a rating to the issue.
"NR" indicates that no rating has been requested, that there is insufficient
information on which to base a rating, or that Standard & Poor's does not rate
a particular obligation as a matter of policy.
Disclaimer Notice. This may contain information obtained from third parties,
including ratings from credit ratings agencies such as Standard & Poor's.
Reproduction and distribution of third party content in any form is prohibited
except with the prior written permission of the related third party. Third
party content providers do not guarantee the accuracy, completeness,
timeliness or availability of any information, including ratings, and are not
responsible for any errors or omissions (negligent or otherwise), regardless
of the cause, or for the results obtained from the use of such content. THIRD
PARTY CONTENT PROVIDERS GIVE NO EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT
NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OR USE. THIRD PARTY CONTENT PROVIDERS SHALL NOT BE LIABLE FOR ANY
Page 30
DIRECT, INDIRECT, INCIDENTAL, EXEMPLARY, COMPENSATORY, PUNITIVE, SPECIAL OR
CONSEQUENTIAL DAMAGES, COSTS, EXPENSES, LEGAL FEES, OR LOSSES (INCLUDING LOST
INCOME OR PROFITS AND OPPORTUNITY COSTS OR LOSSES CAUSED BY NEGLIGENCE) IN
CONNECTION WITH ANY USE OF THEIR CONTENT, INCLUDING RATINGS. Credit ratings
are statements of opinions and are not statements of fact or recommendations
to purchase, hold or sell securities. They do not address the suitability of
securities or the suitability of securities for investment purposes, and
should not be relied on as investment advice.
Federal Tax-Free Income
The taxable equivalent yield is the current yield you would need to earn on a
taxable investment in order to equal a stated tax free yield on a municipal
investment. To assist you to more easily compare municipal investments like
the Trust with taxable alternative investments, the table below presents the
approximate taxable equivalent yields for individuals for a range of
hypothetical tax free yields assuming the stated marginal federal tax rates
for 2022 listed below. The table does not reflect (i) any federal limitations
on the amounts of allowable itemized deductions, or any phase-outs of
exemptions or credits, (ii) any state or local taxes imposed, or (iii) any
alternative minimum taxes or any taxes other than federal personal income
taxes. In addition, note that certain investment income may also be subject to
a 3.80% "Medicare tax."
NATIONAL TAX EQUIVALENT TABLE
--------------------------------------------------------------------------------------------------------------------------------
Taxable Income Tax-Exempt Estimated Current Return
Single Joint Tax 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00%
Return Return Rate Equivalent Taxable Estimated Current Return
----------------- ------------------ -------- -------- -------- -------- -------- -------- -------- --------
$ 0 - 10,275 $ 0 - 20,550 10.00% 1.11% 1.67% 2.22% 2.78% 3.33% 3.89% 4.44%
10,275 - 41,775 20,550 - 83,550 12.00% 1.14% 1.70% 2.27% 2.84% 3.41% 3.98% 4.55%
41,775 - 89,075 83,550 - 178,150 22.00% 1.28% 1.92% 2.56% 3.21% 3.85% 4.49% 5.13%
89,075 - 170,050 178,150 - 340,100 24.00% 1.32% 1.97% 2.63% 3.29% 3.95% 4.61% 5.26%
170,050 - 215,950 340,100 - 431,900 32.00% 1.47% 2.21% 2.94% 3.68% 4.41% 5.15% 5.88%
215,950 - 539,900 431,900 - 647,850 35.00% 1.54% 2.31% 3.08% 3.85% 4.62% 5.38% 6.15%
Over 539,900 Over 647,850 37.00% 1.59% 2.38% 3.17% 3.97% 4.76% 5.56% 6.35%
Over 539,900 Over 647,850 40.80%* 1.69% 2.53% 3.38% 4.22% 5.07% 5.91% 6.76%
* This is the maximum stated regular federal tax rate of 37.00% plus the 3.80%
Medicare tax imposed on the net investment income of certain taxpayers. The
Medicare tax could also apply to taxpayers in other tax brackets. This tax
generally applies to net investment income if the taxpayer's adjusted gross
income exceeds certain threshold amounts, which are $250,000 in the case of
married couples filing joint returns and $200,000 in the case of single
individuals. Tax-exempt interest income is generally not included in net
investment income for purposes of this tax.
Page 31
FIRST TRUST(R)
THE FIRST TRUST(R) COMBINED SERIES 615
TAX EXEMPT MUNICIPAL INCOME TRUST, INTERMEDIATE, SERIES 46
Sponsor:
First Trust Portfolios L.P.
Member SIPC o Member FINRA
120 East Liberty Drive
Wheaton, Illinois 60187
800-621-1675
Trustee:
The Bank of New York Mellon
240 Greenwich Street
New York, New York 10286
800-813-3074
24-Hour Pricing Line:
800-446-0132
Please refer to the "Summary of Essential Information" for the Product Code.
________________________
When Units of the Trust are no longer available, this prospectus may be used
as a preliminary prospectus
for a future series, in which case you should note the following:
THE INFORMATION IN THE PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL, OR ACCEPT OFFERS TO BUY, SECURITIES OF A FUTURE SERIES UNTIL THAT
SERIES HAS BECOME EFFECTIVE WITH THE SEC. NO SECURITIES CAN BE SOLD IN ANY
STATE WHERE A SALE WOULD BE ILLEGAL.
________________________
This prospectus contains information relating to the above-mentioned unit
investment trust, but does not contain all of the information about this
investment company as filed with the SEC in Washington, D.C. under the:
- Securities Act of 1933 (file no. 333-264386) and
- Investment Company Act of 1940 (file no. 811-02541)
Information about the Trust, including its Code of Ethics, can be reviewed and
copied at the SEC's Public Reference Room in Washington, D.C. Information
regarding the operation of the SEC's Public Reference Room may be obtained by
calling the SEC at 202-942-8090.
Information about the Trust is available on the EDGAR Database on the SEC's
Internet site at www.sec.gov.
To obtain copies at prescribed rates -
Write: Public Reference Section of the SEC
100 F Street, N.E.
Washington, D.C. 20549
e-mail address: [email protected]
December 6, 2022
PLEASE RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE
FIRST TRUST(R)
The First Trust(R) Combined Series
Information Supplement
This Information Supplement provides additional information concerning the
structure, operations and risks of the unit investment trust contained in The
First Trust Combined Series 615 not found in the prospectus for the Trust.
This Information Supplement is not a prospectus and does not include all of
the information that you should consider before investing in the Trust. This
Information Supplement should be read in conjunction with the prospectus for
the Trust in which you are considering investing.
This Information Supplement is dated December 6, 2022. Capitalized terms have
been defined in the prospectus.
Table of Contents
Risk Factors 1
Insurance Risk 1
Municipal Securities 2
Education Revenue Securities 2
Health Care Revenue Securities 2
Industrial Revenue Securities 3
Lease Obligation Revenue Securities 3
Multi-Family Mortgage Revenue Securities 3
Resource Recovery Facility Revenue Securities 4
Single Family Mortgage Revenue Securities 4
Special Tax Revenue Securities 4
Tax Allocation Revenue Securities 4
Transportation Facility Revenue Securities 5
Utility Revenue Securities 5
Water and Sewerage Revenue Securities 5
Discount Securities 5
Original Issue Discount Securities 5
Premium Securities 6
When Issued Securities 6
Zero Coupon Securities 6
Risk Factors
The Trust will invest most of its net assets in securities issued by or on
behalf of (or in certificates of participation in lease-purchase obligations
of) certain states or United States Territories which, in the opinion of
recognized bond counsel to the issuing authorities, provide income which is
exempt from federal and applicable state and local income tax. The Trust is
therefore susceptible to general or particular economic, political or
regulatory factors that may affect issuers of such obligations. The following
information constitutes only a brief summary of some of the many complex
factors that may have an effect. The information does not apply to "conduit"
obligations on which the public issuer itself has no financial responsibility.
This information is derived from official statements of certain national
issuers published in connection with their issuance of securities and from
other publicly available information, and is believed to be accurate. No
independent verification has been made of any of the following information.
The timely payment of principal of and interest on certain of the Securities
may be guaranteed by bond insurance purchased by certain of the issuers or
other parties.
Insurance Risk. Certain of the bonds held by the Trust may be insured. In the
case of insured bonds, insurance has been obtained either by the issuer or
underwriters of bonds in the Trust, by a prior owner of such bonds, or by the
Sponsor prior to the deposit of such bonds in the Trust guaranteeing prompt
payment of interest and principal, when due, in respect of such bonds in the
Trust. The premium for any preinsured bond insurance has been paid by such
issuer, by a prior owner of such bonds or the Sponsor and any such policy or
policies are non-cancellable and will continue in force so long as the bonds
so insured are outstanding and the respective preinsured bond insurer remains
Page 1
in business. If the provider of an original issuance insurance policy is
unable to meet its obligations under such policy or if the rating assigned to
the claims-paying ability of any such insurer deteriorates, the insurers have
no obligation to insure any issue adversely affected by either of the above
described events.
In the event of nonpayment of interest or principal, when due, in respect of a
bond, an insurer shall make such payment after the respective insurer has been
notified that such nonpayment has occurred or is threatened (but not earlier
than the date such payment is due). The insurer, as regards any payment it may
make, will succeed to the rights of the Trustee in respect thereof.
The Internal Revenue Service has issued a letter ruling which holds in effect
that insurance proceeds representing maturing interest on defaulted municipal
obligations paid to holders of insured bonds, under policy provisions
substantially identical to the policies described herein, will be excludable
from Federal gross income under Section 103(a)(1) of the Internal Revenue Code
to the same extent as if such payments were made by the issuer of the
municipal obligations. Holders of Units in the Trust should discuss with their
tax advisors the degree of reliance which they may place on this letter ruling.
Each insurer is subject to regulation by the department of insurance in the
state in which it is qualified to do business. Such regulation, however, is no
guarantee that each insurer will be able to perform on its contract of
insurance in the event a claim should be made thereunder at some time in the
future. At the date hereof, it is reported that no claims have been submitted
or are expected to be submitted to any of the insurers which would materially
impair the ability of any such company to meet its commitment pursuant to any
contract of bond or portfolio insurance.
There have been a number of recent developments with respect to ratings
actions impacting insurance companies by the rating agencies, Standard &
Poor's Financial Services LLC, a division of S&P Global Inc. ("S&P"), Moody's
Investors Service, Inc. ("Moody's") and Fitch Ratings Ltd. ("Fitch"). In light
of the ongoing nature of ratings actions or announcements by the rating
agencies, you should consult announcements by the rating agencies, the
websites of the rating agencies and the websites of the insurers for the then
current publicly available information. These ratings actions have had a
significant impact on the ability of insurers to compete in the financial
guarantee business.
Municipal Securities
Bonds held directly by the Trust, or bonds held by Closed-End Funds or ETFs in
which the Trust invests, may be general obligations of a governmental entity
that are backed by the taxing power of such entity. Other bonds in the funds
may be revenue bonds payable from the income of a specific project or
authority and are not supported by the issuer's power to levy taxes. General
obligation bonds are secured by the issuer's pledge of its faith, credit and
taxing power for the payment of principal and interest. Revenue bonds, on the
other hand, are payable only from the revenues derived from a particular
facility or class of facilities or, in some cases, from the proceeds of a
special excise tax or other specific revenue source. There are, of course,
variations in the security of the different bonds in the funds, both within a
particular classification and between classifications, depending on numerous
factors. A description of certain types of revenue bonds follows.
Education Revenue Securities. Certain of the bonds may be obligations of
issuers which are, or which govern the operation of, schools, colleges and
universities and whose revenues are derived mainly from ad valorem taxes, or
for higher education systems, from tuition, dormitory revenues, grants and
endowments. General problems relating to school bonds include litigation
contesting the state constitutionality of financing public education in part
from ad valorem taxes, thereby creating a disparity in educational funds
available to schools in wealthy areas and schools in poor areas. Litigation or
legislation on this issue may affect the sources of funds available for the
payment of school bonds in the Trusts. General problems relating to college
and university obligations would include the prospect of a declining
percentage of the population consisting of "college" age individuals, possible
inability to raise tuitions and fees sufficiently to cover increased operating
costs, the uncertainty of continued receipt of Federal grants and state
funding and new government legislation or regulations which may adversely
affect the revenues or costs of such issuers. All of such issuers have been
experiencing certain of these problems in varying degrees.
Health Care Revenue Securities. Certain of the bonds may be health care
revenue bonds. Ratings of bonds issued for health care facilities are
sometimes based on feasibility studies that contain projections of occupancy
levels, revenues and expenses. A facility's gross receipts and net income
available for debt service may be affected by future events and conditions
including among other things, demand for services, the ability of the facility
to provide the services required, physicians' confidence in the facility,
management capabilities, competition with other hospitals, efforts by insurers
and governmental agencies to limit rates, legislation establishing state rate-
setting agencies, expenses, government regulation, the cost and possible
unavailability of malpractice insurance and the termination or restriction of
Page 2
governmental financial assistance, including that associated with Medicare,
Medicaid and other similar third party payor programs. Pursuant to recent
Federal legislation, Medicare reimbursements are currently calculated on a
prospective basis utilizing a single nationwide schedule of rates. Prior to
such legislation Medicare reimbursements were based on the actual costs
incurred by the health facility. The current legislation may adversely affect
reimbursements to hospitals and other facilities for services provided under
the Medicare program.
Industrial Revenue Securities. Certain of the bonds may be industrial revenue
bonds ("IRBs"), including pollution control revenue bonds, which are taxable
or tax-exempt securities issued by states, municipalities, public authorities
or similar entities to finance the cost of acquiring, constructing or
improving various industrial projects. These projects are usually operated by
corporate entities. Issuers are obligated only to pay amounts due on the IRBs
to the extent that funds are available from the unexpended proceeds of the
IRBs or receipts or revenues of the issuer under an arrangement between the
issuer and the corporate operator of a project. The arrangement may be in the
form of a lease, installment sale agreement, conditional sale agreement or
loan agreement, but in each case the payments to the issuer are designed to be
sufficient to meet the payments of amounts due on the IRBs. Regardless of the
structure, payment of IRBs is solely dependent upon the creditworthiness of
the corporate operator of the project or corporate guarantor. Corporate
operators or guarantors may be affected by many factors which may have an
adverse impact on the credit quality of the particular company or industry.
These include cyclicality of revenues and earnings, regulatory and
environmental restrictions, litigation resulting from accidents or
environmentally-caused illnesses, extensive competition and financial
deterioration resulting from a complete restructuring pursuant to a leveraged
buy-out, takeover or otherwise. Such a restructuring may result in the
operator of a project becoming highly leveraged which may impact on such
operator's creditworthiness, which in turn would have an adverse impact on the
rating and/or market value of such bonds. Further, the possibility of such a
restructuring may have an adverse impact on the market for and consequently
the value of such bonds, even though no actual takeover or other action is
ever contemplated or affected. The IRBs in a fund may be subject to special or
extraordinary redemption provisions which may provide for redemption at par
or, with respect to original issue discount bonds, at issue price plus the
amount of original issue discount accreted to the redemption date plus, if
applicable, a premium. The Sponsor cannot predict the causes or likelihood of
the redemption of IRBs or other bonds in the funds prior to the stated
maturity of such bonds.
Lease Obligation Revenue Securities. Certain of the bonds may be lease
obligations issued for the most part by governmental authorities that have no
taxing power or other means of directly raising revenues. Rather, the
governmental authorities are financing vehicles created solely for the
construction of buildings (schools, administrative offices, convention centers
and prisons, for example) or the purchase of equipment (police cars and
computer systems, for example) that will be used by a state or local
government (the "lessee"). Thus, these obligations are subject to the ability
and willingness of the lessee government to meet its lease rental payments
which include debt service on the obligations. Lease obligations are subject,
in almost all cases, to the annual appropriation risk, i.e., the lessee
government is not legally obligated to budget and appropriate for the rental
payments beyond the current fiscal year. These obligations are also subject to
construction and abatement risk in many states-rental obligations cease in the
event that delays in building, damage, destruction or condemnation of the
project prevents its use by the lessee. In these cases, insurance provisions
designed to alleviate this risk become important credit factors. In the event
of default by the lessee government, there may be significant legal and/or
practical difficulties involved in the re-letting or sale of the project. Some
of these issues, particularly those for equipment purchase, contain the so-
called "substitution safeguard," which bars the lessee government, in the
event it defaults on its rental payments, from the purchase or use of similar
equipment for a certain period of time. This safeguard is designed to insure
that the lessee government will appropriate, even though it is not legally
obligated to do so, but its legality remains untested in most, if not all,
states.
Multi-Family Mortgage Revenue Securities. Certain of the bonds may be
obligations of issuers whose revenues are primarily derived from housing
projects for low to moderate income families. The ability of such issuers to
make debt service payments will be affected by events and conditions affecting
financed projects, including, among other things, the achievement and
maintenance of sufficient occupancy levels and adequate rental income,
increases in taxes, employment and income conditions prevailing in local labor
markets, utility costs and other operating expenses, the managerial ability of
project managers, changes in laws and governmental regulations, the
appropriation of subsidies and social and economic trends affecting the
localities in which the projects are located. The occupancy of housing
projects may be adversely affected by high rent levels and income limitations
imposed under Federal and state programs. Multi-family mortgage revenue bonds
are subject to redemption and call features, including extraordinary mandatory
redemption features, upon prepayment, sale or non-origination of mortgage
Page 3
loans as well as upon the occurrence of other events. Certain issuers of multi-
family housing bonds have considered various ways to redeem bonds they have
issued prior to the stated first redemption dates for such bonds. In one
situation the New York City Housing Development Corporation, in reliance on
its interpretation of certain language in the indenture under which one of its
bond issues was created, redeemed all of such issue at par in spite of the
fact that such indenture provided that the first optional redemption was to
include a premium over par and could not occur prior to 1992.
Resource Recovery Facility Revenue Securities. Certain of the bonds may be
obligations which are payable from and secured by revenues derived from the
operation of resource recovery facilities. Resource recovery facilities are
designed to process solid waste, generate steam and convert steam to
electricity. Resource recovery bonds may be subject to extraordinary optional
redemption at par upon the occurrence of certain circumstances, including but
not limited to: destruction or condemnation of a project; contracts relating
to a project becoming void, unenforceable or impossible to perform; changes in
the economic availability of raw materials, operating supplies or facilities
necessary for the operation of a project or technological or other unavoidable
changes adversely affecting the operation of a project; administrative or
judicial actions which render contracts relating to the projects void,
unenforceable or impossible to perform; or impose unreasonable burdens or
excessive liabilities. The Sponsor cannot predict the causes or likelihood of
the redemption of resource recovery bonds in the funds prior to the stated
maturity of the Securities.
Single Family Mortgage Revenue Securities. Certain of the bonds may be single
family mortgage revenue bonds, which are issued for the purpose of acquiring
from originating financial institutions notes secured by mortgages on
residences located within the issuer's boundaries and owned by persons of low
or moderate income. Mortgage loans are generally partially or completely
prepaid prior to their final maturities as a result of events such as sale of
the mortgaged premises, default, condemnation or casualty loss. Because these
bonds are subject to extraordinary mandatory redemption in whole or in part
from such prepayments of mortgage loans, a substantial portion of such bonds
will probably be redeemed prior to their scheduled maturities or even prior to
their ordinary call dates. The redemption price of such issues may be more or
less than the offering price of such bonds. Extraordinary mandatory redemption
without premium could also result from the failure of the originating
financial institutions to make mortgage loans in sufficient amounts within a
specified time period or, in some cases, from the sale by the bond issuer of
the mortgage loans. Failure of the originating financial institutions to make
mortgage loans would be due principally to the interest rates on mortgage
loans funded from other sources becoming competitive with the interest rates
on the mortgage loans funded with the proceeds of the single family mortgage
revenue bonds. Additionally, unusually high rates of default on the underlying
mortgage loans may reduce revenues available for the payment of principal of
or interest on such mortgage revenue bonds. Single family mortgage revenue
bonds issued after December 31, 1980 were issued under Section 103A of the
Internal Revenue Code, which Section contains certain ongoing requirements
relating to the use of the proceeds of such bonds in order for the interest on
such bonds to retain its tax-exempt status. In each case, the issuer of the
bonds has covenanted to comply with applicable ongoing requirements and bond
counsel to such issuer has issued an opinion that the interest on the bonds is
exempt from Federal income tax under existing laws and regulations. There can
be no assurances that the ongoing requirements will be met. The failure to
meet these requirements could cause the interest on the bonds to become
taxable, possibly retroactively from the date of issuance.
Special Tax Revenue Securities. Certain of the bonds may be special tax bonds
payable from 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 purchase of fuel, 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 Revenue Securities. Certain of the bonds may be 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. 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.
Page 4
Transportation Facility Revenue Securities. Certain of the bonds may be
obligations which are payable from and secured by revenues derived from the
ownership and operation of facilities such as airports, bridges, turnpikes,
port authorities, convention centers and arenas. The major portion of an
airport's gross operating income is generally derived from fees received from
signatory airlines pursuant to use agreements which consist of annual payments
for leases, occupancy of certain terminal space and service fees. Airport
operating income may therefore be affected by the ability of the airlines to
meet their obligations under the use agreements. The air transport industry is
experiencing significant variations in earnings and traffic, due to increased
competition, excess capacity, increased costs, deregulation, traffic
constraints and other factors, and several airlines are experiencing severe
financial difficulties. The Sponsor cannot predict what effect these industry
conditions may have on airport revenues which are dependent for payment on the
financial condition of the airlines and their usage of the particular airport
facility. Similarly, payment on bonds related to other facilities is dependent
on revenues from the projects, such as user fees from ports, tolls on
turnpikes and bridges and rents from buildings. Therefore, payment may be
adversely affected by reduction in revenues due to such factors as increased
cost of maintenance, decreased use of a facility, lower cost of alternative
modes of transportation, scarcity of fuel and reduction or loss of rents.
Utility Revenue Securities. Certain of the bonds may be obligations of issuers
whose revenues are primarily derived from the sale of energy. Utilities are
generally subject to extensive regulation by state utility commissions which,
among other things, establish the rates which may be charged and the
appropriate rate of return on an approved asset base. The problems faced by
such issuers include the difficulty in obtaining approval for timely and
adequate rate increases from the governing public utility commission, the
difficulty in financing large construction programs, the limitations on
operations and increased costs and delays attributable to environmental
considerations, increased competition, recent reductions in estimates of
future demand for electricity in certain areas of the country, the difficulty
of the capital market in absorbing utility debt, the difficulty in obtaining
fuel at reasonable prices and the effect of energy conservation. All of such
issuers have been experiencing certain of these problems in varying degrees.
In addition, Federal, state and municipal governmental authorities may from
time to time review existing legislation and impose additional regulations
governing the licensing, construction and operation of nuclear power plants,
which may adversely affect the ability of the issuers of such bonds to make
payments of principal and/or interest on such bonds.
Water and Sewerage Revenue Securities. Certain of the bonds may be obligations
of issuers whose revenues are derived from the sale of water and/or sewerage
services. Water and sewerage bonds are generally payable from user fees.
Problems faced by such issuers include the ability to obtain timely and
adequate rate increases, population decline resulting in decreased user fees,
the difficulty of financing large construction programs, the limitations on
operations and increased costs and delays attributable to environmental
considerations, the increasing difficulty of obtaining or discovering new
supplies of fresh water, the effect of conservation programs and the impact of
"no-growth" zoning ordinances. All of such issuers have been experiencing
certain of these problems in varying degrees.
Discount Securities. Certain of the bonds may have been acquired at a market
discount from par value at maturity. The coupon interest rates on the discount
bonds at the time they were purchased and deposited in the funds were lower
than the current market interest rates for newly issued bonds of comparable
rating and type. If such interest rates for newly issued comparable bonds
increase, the market discount of previously issued bonds will become greater,
and if such interest rates for newly issued comparable bonds decline, the
market discount of previously issued bonds will be reduced, other things being
equal. Investors should also note that the value of bonds purchased at a
market discount will increase in value faster than bonds purchased at a market
premium if interest rates decrease. Conversely, if interest rates increase,
the value of bonds purchased at a market discount will decrease faster than
bonds purchased at a market premium. In addition, if interest rates rise, the
prepayment risk of higher yielding, premium bonds and the prepayment benefit
for lower yielding, discount bonds will be reduced. Market discount
attributable to interest changes does not indicate a lack of market confidence
in the issue. Neither the Sponsor nor the Trustee shall be liable in any way
for any default, failure or defect in any of the bonds.
Original Issue Discount Securities. Certain of the bonds are considered
original issue discount bonds. Under current law, the original issue discount,
which is the difference between the stated redemption price at maturity and
the issue price of the bonds, is deemed to accrue on a daily basis and the
accrued portion is treated as taxable interest income for Federal income tax
purposes. On sale or redemption, any gain realized that is in excess of the
earned portion of original issue discount will be taxable as capital gain
unless the gain is attributable to market discount in which case the accretion
of market discount is taxable as ordinary income. The current value of an
Page 5
original issue discount bond reflects the present value of its stated
redemption price at maturity. The market value tends to increase in greater
increments as the bonds approach maturity.
Premium Securities. Certain of the bonds may have been acquired at a market
premium from par value at maturity. The coupon interest rates on the premium
bonds at the time they were purchased by the fund were higher than the current
market interest rates for newly issued bonds of comparable rating and type. If
such interest rates for newly issued and otherwise comparable bonds decrease,
the market premium of previously issued bonds will be increased, and if such
interest rates for newly issued comparable bonds increase, the market premium
of previously issued bonds will be reduced, other things being equal. The
current returns of bonds trading at a market premium are initially higher than
the current returns of comparable bonds of a similar type issued at currently
prevailing interest rates because premium bonds tend to decrease in market
value as they approach maturity when the face amount becomes payable. Because
part of the purchase price is thus returned not at maturity but through
current income payments, early redemption of a premium bond at par or early
prepayments of principal will result in a reduction in yield. Redemption
pursuant to call provisions generally will, and redemption pursuant to sinking
fund provisions may, occur at times when the redeemed bonds have an offering
side valuation which represents a premium over par or for original issue
discount bonds a premium over the accreted value.
When Issued Securities. "When, as and if issued" bonds are bonds that trade
before they are actually issued. This means that the bonds can only be
delivered when the bonds are actually issued. Delivery of these bonds may be
delayed or may not occur. Interest on these bonds does not begin accruing
until the bonds are delivered to an investor. An investor may have to adjust
their tax basis if the bonds are delivered after their expected delivery date.
Any adjustment would reflect interest that accrued between the time of
purchase and the time of delivery of the bonds. In addition, an investor may
experience gains or losses on these bonds from the time of purchase even
though the investor has not received them.
Zero Coupon Securities. Zero coupon bonds (which include bonds known as
multiplier bonds, money multiplier bonds, capital appreciation bonds, capital
accumulator bonds, compound interest bonds and money discount maturity payment
bonds) do not provide for the payment of any current interest and generally
provide for payment at maturity at face value unless sooner sold or redeemed.
Zero coupon bonds may be subject to more price volatility than conventional
bonds. While some types of zero coupon bonds, such as multipliers and capital
appreciation bonds, define par as the initial offering price rather than the
maturity value, they share the basic zero coupon bond features of (1) not
paying interest on a semi-annual basis and (2) providing for the reinvestment
of the bond's semi-annual earnings at the bond's stated yield to maturity.
While zero coupon bonds are frequently marketed on the basis that their fixed
rate of return minimizes reinvestment risk, this benefit can be negated in
large part by weak call protection, i.e., a bond's provision for redemption at
only a modest premium over the accreted value of the bond.
Page 6
UNDERTAKINGS
| 1. | With the exception of the information included in the state specific appendices to the Information Supplement, which will vary depending upon the make-up of a Fund or updated to reflect current events, any amendment to a Fund's Information Supplement will be subject to the review of the staff of the Securities and Exchange Commission prior to distribution; and |
| 2. | The Information Supplement to the Trust will not include third party financial information. |
| 3. | Subject to the terms and conditions of Section 15(d) of the Securities Exchange Act of 1934, the undersigned registrant hereby undertakes to file with the Securities and Exchange Commission such supplementary and periodic information, documents, and reports as may be prescribed by any rule or regulation of the Commission heretofore or hereafter duly adopted pursuant to authority conferred in that section. |
CONTENTS OF REGISTRATION STATEMENT
| Item A. | Bonding Arrangements of Depositor |
First Trust Portfolios L.P. is covered by a Brokers' Fidelity Bond, in the total amount of $2,000,000, the insurer being National Union Fire Insurance Company of Pittsburgh.
| Item B. | This Registration Statement on Form S-6 comprises the following papers and documents: |
The Facing Sheet
The Prospectus
The Signatures
| Exhibits |
S-1
SIGNATURES
The Registrant, The First Trust Combined Series 615, hereby identifies The First Trust Special Situations Trust, Series 4; The First Trust Special Situations Trust, Series 18; The First Trust Special Situations Trust, Series 69; The First Trust Special Situations Trust, Series 108; The First Trust Special Situations Trust, Series 119; The First Trust Special Situations Trust, Series 190; FT 286; The First Trust Combined Series 272; FT 412; FT 438; FT 556; FT 754; FT 1102; FT 1179; FT 2935; FT 3320; FT 3367; FT 3370; FT 3397; FT 3398; FT 3400; FT 3451; FT 3480; FT 3529; FT 3530; FT 3568; FT 3569; FT 3570; FT 3572; FT 3615; FT 3647; FT 3650; FT 3689; FT 3690; FT 3729; FT 3780; FT 3940; FT 4020; FT 4037; FT 4143; FT 4260; FT 4746; FT 4789; FT 5039; FT 5415; FT 7033; FT 7256; FT 7935; FT 8495; FT 8669; FT 8713; FT 8740; FT 8746; FT 8758; FT 8817; FT 8955; FT 8956; FT 8965; FT 8976; FT 8978; FT 8993; FT 8994; FT 8997; FT 9039; FT 9040; FT 9042; FT 9058; FT 9068; FT 9203; FT 9204; FT 9303; FT 9305; FT 9326; FT 9327; FT 9372; FT 9401; FT 9402; FT 9403; FT 9474; FT 9513; FT 9514; FT 9611; FT 9630; FT 9709; FT 9872; FT 9908; FT 9911; FT 9923; FT 9937; FT 9950; FT 9961; FT 9977; FT 9978; FT 10051; FT 10057; FT 10105; FT 10109; FT 10121; FT 10272; FT 10295; FT 10323 and FT 10412 for purposes of the representations required by Rule 487 and represents the following:
(1)that the portfolio securities deposited in the series with respect to which this Registration Statement is being filed do not differ materially in type or quality from those deposited in such previous series;
(2)that, except to the extent necessary to identify the specific portfolio securities deposited in, and to provide essential financial information for, the series with respect to the securities of which this Registration Statement is being filed, this Registration Statement does not contain disclosures that differ in any material respect from those contained in the registration statements for such previous series as to which the effective date was determined by the Commission or the staff; and
(3)that it has complied with Rule 460 under the Securities Act of 1933.
Pursuant to the requirements of the Securities Act of 1933, the Registrant, The First Trust Combined Series 615, 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 December 6, 2022.
THE FIRST TRUST COMBINED SERIES 615
| By: | FIRST TRUST PORTFOLIOS L.P. Depositor |
| By: | /s/ Elizabeth H. Bull Senior Vice President |
| S-2 |
Pursuant to the requirements of the Securities Act of 1933, this Amendment to the Registration Statement has been signed below by the following person in the capacity and on the date indicated:
| Name | Title* | Date |
| James A. Bowen | Director of The Charger Corporation, the General Partner of First Trust Portfolios L.P., and Chief Executive Officer of First Trust Portfolios L.P. | ) ) ) )By: /s/ Elizabeth H. Bull ) Attorney-in-Fact** ) December 6, 2022 |
| James M. Dykas | Chief Financial Officer of First Trust Portfolios L.P. | ) ) |
| Christina Knierim | Controller of First Trust Portfolios L.P. | ) ) |
| * | The title of the person named herein represents his or her capacity in and relationship to First Trust Portfolios L.P., the Depositor. |
| ** | Executed copies of the related powers of attorney were filed with the Securities and Exchange Commission in connection with the Amendment No. 1 to Form S-6 of FT 10131 (File No. 333-264568) and the same is hereby incorporated herein by this reference. |
S-3
CONSENT OF COUNSEL
The consent of counsel to the use of its name in the Prospectus included in this Registration Statement is contained in its opinion filed as Exhibit 3.1 of the registration statement.
Consent of Independent Registered Public Accounting Firm
The consent of Deloitte & Touche LLP to the use of its name in the Prospectus included in the Registration Statement is filed as Exhibit 4.1 to the Registration Statement.
S-4
EXHIBIT INDEX
| 1.1 | Standard Terms and Conditions of Trust for The First Trust(R) Combined Series 616 and subsequent Series, effective October 27, 2022 among First Trust Portfolios L.P., as Depositor, The Bank of New York Mellon, as Trustee, First Trust Advisors L.P., as Portfolio Supervisor and FTP Services LLC, as FTPS Unit Servicing Agent (incorporated by reference to Amendment No. 1 to Form S-6 [File No. 333-264656] filed on behalf of The First Trust(R) Combined Series 616). |
| 1.1.1 | Trust Agreement for the First Trust Combined Series 615, effective December 6, 2022 among First Trust Portfolios L.P., as Depositor, The Bank of New York Mellon, as Trustee and First Trust Advisors L.P., as Portfolio Supervisor. |
| 1.2 | Certificate of Limited Partnership of Nike Securities, L.P., predecessor of First Trust Portfolios L.P. (incorporated by reference to Amendment No. 1 to Form S-6 [File No. 333-230481] filed on behalf of FT 8001). |
| 1.3 | Amended and Restated Limited Partnership Agreement of Nike Securities, L.P., predecessor of First Trust Portfolios L.P. (incorporated by reference to Amendment No. 1 to Form S-6 [File No. 333-230481] filed on behalf of FT 8001). |
| 1.4 | Articles of Incorporation of Nike Securities Corporation, predecessor to The Charger Corporation, the general partner of First Trust Portfolios L.P., Depositor (incorporated by reference to Amendment No. 1 to Form |
S-6 [File No. 333-230481] filed on behalf of FT 8001).
| 1.5 | By-Laws of The Charger Corporation, the general partner of First Trust Portfolios L.P., Depositor (incorporated by reference to Amendment No. 2 to Form S-6 [File No. 333-169625] filed on behalf of FT 2669). |
| 1.6 | Master Agreement Among Underwriters (incorporated by reference to Amendment No. 1 to Form S-6 [File No. 333-267573] filed on behalf of FT 10366). |
S-5
| 2.2 | Code of Ethics (incorporated by reference to Amendment No. 1 to Form S-6 [File No. 333-224320] filed on behalf of FT 7359). |
| 3.1 | Opinion of counsel as to legality of securities being registered. |
| 4.1 | Consent of Independent Registered Public Accounting Firm. |
| 6.1 | List of Principal Officers of the Depositor (incorporated by reference to Amendment No. 1 to Form S-6 [File No. 333-236093] filed on behalf of FT 8556). |
| 7.1 | Powers of Attorney executed by the Officers listed on page S-3 of this Registration Statement (incorporated by reference to Amendment No. 1 to Form S-6 [File No. 333-264568] filed on behalf of FT 10131). |
S-6
ATTACHMENTS / EXHIBITS
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