File No. 33-38089
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                         POST EFFECTIVE AMENDMENT NO. 6
                                       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 MUNICIPAL BOND TRUST, SERIES 231
  B.  Name of Depositor:
      PAINEWEBBER INCORPORATED
  C.  Complete address of Depositor's principal executive office:
      PAINEWEBBER INCORPORATED
      1285 Avenue of the Americas
      New York, New York 10019
  D.  Name and complete address of agents for service:
      PAINEWEBBER INCORPORATED
      Attention: Mr. Robert E. Holley
      1200 Harbor Blvd.
      Weehawken, New Jersey 07087
  (x) Check if it is proposed that this filing should become effective        
      (immediately upon filing or on November 24, 1997) pursuant to           
      paragraph
      (b) of Rule 485.                                                        
  E.  Total and amount of securities being registered:                        
      4,097 Units                                                             
  F.  Proposed maximum offering price to the public of the securities being   
      registered:                                                             
      $4,311,232.13*                                                          
  *   Estimated solely for the purpose of calculating the registration fee, at
      $1,052.29 per unit.                                                     
  G.  Amount of filing fee, computed at one-thirty-third of 1 percent of the
      proposed maximum aggregate offering price to the public:
      $100.00*
  H.  Approximate date of proposed sale to public:
      AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THE
      REGISTRATION STATEMENT.
  *   The method of calculation is made pursuant to Rule 24e-2 under the      
      Investment Company Act of 1940.The total amount of units redeemed or    
      repurchased during the previous fiscal year ending 1996 is 3,784. There 
      have been no previous filings of post-effective amendments during the   
      current fiscal year 3,784 redeemed or repurchased units are being used  
      to reduce the filing fee for this amendment.                            
    
                      THE MUNICIPAL BOND TRUST, SERIES 231
                              Cross Reference Sheet
                     Pursuant to Rule 404(c) of Regulation C
                        under the Securities Act of 1933
                  (Form N-8B-2 Items required by Instruction 1
                          as to Prospectus on Form S-6)
  Form N-8B-2                                                          Form S-6
  Item Number                                             Heading in Prospectus
                  I.       Organization and General Information
  1.    (a)Name of Trust                )  Front Cover
        (b)Title of securities issued   )
  2.    Name and address of             )  Back Cover
        Depositor
  3.    Name and address of             )  Back Cover
        Trustee
  4.    Name and address of             )  Back Cover
        Principal
        Underwriter                     )
  5.    Organization of Trust           )  Nature of Trust
  6.    Execution and                   )  Nature of Trust
        termination of
        Trust Agreement                 )  Termination of the Trust
  7.    Changes of name                 )  *
  8.    Fiscal Year                     )  *
  9.    Litigation                      )  *
     II.       General Description of the Trust and Securities of the Trust
  10.   General Information             )  The Trust Portfolio
        regarding
        Trust's Securities and          )  Rights of Certificate-
        Rights
        of Holders                      )  holders
  (a)   Type of Securities              )  Nature of Trust
        (Registered or Bearer)          )
  (b)   Type of Securities              )  Nature of Trust
        (Registered or Bearer)          )
  *   Not applicable, answer negative or not required.
  (c)   Rights of Holders as to         )  Rights of Certificate-
        Withdrawal or                   )  holders
        Redemption
                                        )  Redemption of Units by
                                        )  the Trustee
                                        )  The Municipal Bond Trust
                                        )  Reinvestment Program
  (d)   Rights of Holders as to         )  Secondary Market for
        conversion, transfer, etc.      )  Units Exchange Option
  (e)   Rights of Trust issues          )
        periodic payment plan           )  *
        certificates                    )
  (f)   Voting rights as to             )  Rights of Certificate-
        Securi-
        ties, under the Indenture       )  holders
  (g)   Notice to Holders as to         )
        change in                       )
        (1)Assets of Trust              )  Amendment of the
                                           Indenture
        (2)Terms and Conditions         )  Supervision of Trust
           of Trust's Securities        )  Investments
        (3)Provisions of Trust          )  Amendment of the
                                           Indenture
        (4)Identity of Depositor        )  Administration of the and
                                           Trustee
                                        )  Trust
 
  (h)   Consent of Security             )
        Holders
        required to change              )
        (1)Composition of assets        )  Amendment of the
                                           Indenture
           of Trust                     )
        (2)Terms and conditions         )  Amendment of the
                                           Indenture
           of Trust's Securities        )
        (3)Provisions of Indenture      )  Amendment of the
                                           Indenture
        (4)Identity of Depositor        )  Administration of the Trust
           and Trustee                  )
  (i)   Other provisions                )  The Trust-Part B
  11.   Type of Securities              )  Front Cover-The Trust-
        Comprising Units                   Portfolio
  12.   Type of securities              )  *
        comprising
        periodic payment                )
        certificates
  13.   (a)Load, fees, expenses, etc.   )  Public Offering Price of
                                        )  Units; Expenses of the
                                        )  Trust
  *   Not applicable, answer negative or not required.
        (b)Certain information          )  *
           regarding periodic payment   )  *
           certificates                 )
        (c)Certain percentages          )  *
        (d)Certain other fees, etc.     )  Expenses of the Trust
        payable by holders              )
        (e)Certain profits receivable   )  Public Offering Price of
           by depositor, principal      )  Units
           underwriters, trustee or     )  Public Offering of Units
           affiliated persons           )
        (f)Ratio of annual charges to   )  *
           income                       )
  14.   Issuance of Trust's             )  Nature of the Trust
        securities
                                        )  Public Offering of Units
  15.   Receipt and handling of         )  *
        payments from                   )
        purchasers
  16.   Acquisition and                 )  Acquisition of Securities
        disposition of
        underlying securities           )  for the Trust; Supervision
                                        )  of Trust Investments.
  17.   Withdrawal or                   )  Redemption of Units
        redemption
                                        )  by Trustee
  18.   (a)Receipt and disposition of   )  Distributions of Certifi-
           income                       )  cateholders
        (b)Reinvestment of distritions  )  *
        (c)Reserves or special fund     )  Distributions to Certifi-
                                        )  cateholders
        (d)Schedule of distribution     )  *
  19.   Records, accounts and           )  Statements to Certificate-
        report
                                        )  holders; Administration
                                        )  of the Trust
  20.   Certain miscellaneous           )  Administration of the Trust
        pro-
        visions of Trust                )
        agreement
 
  21.   Loans to security               )  *
        holders
  22.   Limitations on liability        )  Limitation of Liabilities
  23.   Bonding arrangements            )  Included in Form N-8B-2
  24.   Other material                  )  *
        provisions of
        trust agreement                 )
  *   Not applicable, answer negative or not required.
 
                     III.        Organization Personnel and
                            Affiliated Persons of Depositor
  25.   Organization of                 )  Sponsor
        Depositor
  26.   Fees received by                )  Public Offering Price of
        Depositor
                                        )  Units Expenses of the Trust
  27.   Business of Depositor           )  Sponsor
  28.   Certain information as to       )  Sponsor
        officials and affiliated        )
        persons of Depositor            )
  29.   Voting securities of            )  *
        Depositor
  30.   Persons controlling             )  Sponsor
        Depositor
  31.   Payments by Depositor           )  *
        for
        certain other services          )
        rendered to Trust               )
  32.   Payments by Depositor           )  *
        for
        certain other services          )
        rendered to Trust               )
  33.   Remuneration of                 )  *
        employees of
        Depositor for certain           )
        services
        rendered to Trust               )
  34.   Remuneration of other           )  *
        persons
        for certian services            )
        rendered
        to Trust                        )
              IV.        Distribution and Redemption of Securities
  35.   Distribution of Trust's         )  Public Offering of Units
        securities by states            )
  36.   Suspension of sales of          )  *
        Trust's
        securities                      )
  37.   Revocation of authority         )  *
        to
        distribute                      )
  38.   (a)Method of distribution       )  Public Offering of Units
        (b)Underwriting agreements      )
        (c)Selling agreements           )
  *   Not applicable, answer negative or not required.
  39.   (a)Organization of principal    )  Sponsor
           underwriter                  )
        (b)N.A.S.D. membership of       )  Sponsor
           principal underwriter        )
  40.   Certain fees received by        )  Public Offering Price of
        principal underwriter           )  Units
  41.   (a)Business of principal        )  Sponsor
           underwriter                  )
        (b)Branch officers of           )  *
           principal underwriter        )
        (c)Salesman of principal        )  *
           underwriter                  )
  42.   Ownership of Trust's            )  *
        securities
        by certain persons              )
  43.   Certain brokerage               )  *
        commissions
 
        received by principal           )
        underwriter                     )
  44.   (a)Method of valuation          )  Public Offering Price of
                                        )  Units
        (b)Schedule as to offering      )  *
           price                        )
        (c)Variation in Offering        )  Public Offering Price of
           price to certain persons     )  Units
  45.   Suspension of                   )  *
        redemption rights
  46.   (a)Redemption valuation         )  Redemption of Units by
                                        )  Trustee
        (b)Schedule as to redemption    )  *
           price                        )
            V.        Information concerning the Trustee or Custodian
  47.   Maintenance of position         )  Secondary Market for Units
        in
        underlying securities           )  Redemption of Units by
                                        )  Trustee
                                        )  Evaluation of the Trust
  48.   Organization and                )  Administration of the Trust
        regulation of
        Trustee                         )  Trustee
  49.   Fees and expenses of            )  Expenses of the Trust
        Trustee
  50.   Trustee's lien                  )  Expenses of the Trust
  *   Not applicable, answer negative or not required.
 
      VI.        Information concerning Insurance of Holders of Securities
  51.   (a)Name and address of          )  *
        Insurance Company               )
        (b)Type of policies             )  *
        (c)Type of risks insured and    )  *
           excluded                     )
        (d)Coverage of policies         )  *
        (e)Beneficiaries of policies    )  *
        (f)Terms and manner of          )  *
           cancellation                 )
        (g)Method of determining        )  *
           premiums                     )
        (h)Amount of aggregate          )  *
           premiums paid                )
        (i)Who receives any part of     )  *
           premiums                     )
        (j)Other material provisions    )  *
           of the Trust relating to     )
           insurance                    )
                         VII.       Policy of Registrant
  52.   (a)Method of selecting and      )  Acquisition of Securities
           eliminating securities       )  for the Trust
           from the Trust               )
        (b)Elimination of securities    )  *
           from the Trust               )
        (c)Policy of Trust regarding    )  Supervision of Trust
           substitution and             )  Investments
           elimination of securities    )
        (d)Description of any funda-    )  Acquisition of Securities
           mental policy of the Trust   )  for the Trust
                                        )  Supervision of Trust
                                        )  Investments
  53.   (a)Taxable status of the        )  Tax status of the Trust
           Trust                        )
        (b)Qualification of the Trust   )  Tax status of the Trust
           as a mutual investment       )
           company                      )
  *   Not applicable, answer negative or not required.
 
                VIII.       Financial and Statistical Information
  54.   Information regarding           )  *
        the
        Trust's past ten fiscal         )
        years
  55.   Certain information             )  *
        regarding
        periodic payment plan           )
        certificates                    )
  56.   Certain information             )  *
        regarding
        periodic payment plan           )
        certificates                    )
  57.   Certain information             )  *
        regarding
        periodic payment plan           )
        certificates                    )
  58.   Certain information             )  *
        regarding
        periodic payment plan           )
        certi-
        ficates                         )
  59.   Financial statements            )  Statement of Financial
        (Instruction 1(c) to            )  Condition
        Form S-6)
  *   Not applicable, answer negative or not required.
   
            THE MUNICIPAL BOND TRUST
                   SERIES 231
This Prospectus consists of two parts. Part A 
contains Essential Information Regarding the 
Trust including descriptive material relating to 
the Trust, Financial Statements of the Trust, 
and a Schedule of Investments. Part B contains 
general information about the Trust. Part A may 
not be distributed unless accompanied by Part B.

Interest income to the Trust and to 
Certificateholders is excludable, in the
opinion of counsel, from gross income for   6,599
Federal income tax purposes under existing  UNITS
law, but may be subject to state and local
taxation. Capital gains, if any, are subject
to tax.

THE INITIAL PUBLIC OFFERING OF UNITS IN THE 
TRUST HAS BEEN COMPLETED. THE UNITS OFFERED 
HEREBY ARE ISSUED AND OUTSTANDING UNITS WHICH 
HAVE BEEN ACQUIRED BY THE SPONSOR EITHER BY 
PURCHASE FROM THE TRUSTEE OF UNITS TENDERED FOR 
REDEMPTION OR IN THE SECONDARY MARKET.

THE OBJECTIVES OF THE MUNICIPAL BOND TRUST, 
SERIES 231 -The Municipal Bond Trust, Series 231 
(the "Trust") is a unit investment trust formed 
for the purpose of gaining Federally tax-exempt 
interest income consistent with the preservation 
of capital and diversification of risk through 
investment in a fixed portfolio of "investment 
grade" (as of the Initial Date of Deposit) 
interest-bearing municipal bonds (the "Bonds"). 
The payment of interest and the preservation of 
capital is dependent upon the continuing ability 
of the respective issuers of such Bonds to meet 
their obligations. Since PaineWebber 
Incorporated (the "Sponsor") and Investors Bank 
& Trust Company and The First National Bank of 
Chicago, as Co-Trustees (the "Co-Trustees") do 
not have control over the source of payment of 
the Bonds, they cannot guarantee that the 
objectives of the Trust will be achieved. Each 
Unit at the date hereof represents 1/6,599th 
fractional undivided interest in the $6,525,000 
principal amount of bonds and net income of the 
Trust in the ratio of 1 Unit for each $988.79 
par value of Bonds in the Trust. (See "Nature of 
the Trust" in Part B). The aggregate market 
value, based on the bid side of the market, of 
the Bonds in the Trust was, as of August 31, 
1997, $6,938,928.

PUBLIC OFFERING PRICE-- The Public Offering 
Price of Units is equal to the aggregate of the 
bid prices of the underlying Bonds divided by 
the number of Units outstanding plus a sales 
charge of up to 5.82% of the net amount invested 
(5.50% of the Public Offering Price). Units are 
offered at the Public Offering Price plus 
accrued interest. (See "Public Offering Price of 
Units" and "Secondary Market for Units" in Part 
B). Investors should note that the terms 
"Certificateholders" and "Unitholders" are used 
interchangeably in this prospectus.

MARKET FOR UNITS-- Although under no obligation 
to do so, the Sponsor intends to maintain a 
market for Units at prices based on the 
aggregate bid price of the Bonds in the Trust. 
If such market is terminated, a 
Certificateholder may be able to dispose of his 
Units only through redemption. (See "Secondary 
Market for Units" in Part B).

DISTRIBUTIONS-- Distributions of interest 
received by the Trust, less expenses, will be 
made on a monthly basis. Distribution of 
principal, if any, will be made on a semi-annual 
or more frequent basis. See "Distribution to 
Unitholders" in Part B for details of optional 
distributions.

ESTIMATED CURRENT RETURN-- The Estimated Current 
Return per Unit is determined by dividing the 
net annual interest income per Unit by the 
Public Offering Price per Unit. Any change in 
either amount will result in a change in 
Estimated Current Return. (See "Estimated 
Current Return and Estimated Long Term Return" 
in Part B and "Essential Information" in Part 
A).

THESE SECURITIES HAVE NOT BEEN APPROVED OR 
DISAPPROVED BY THE SECURITIES AND EXCHANGE 
COMMISSION OR ANY STATE SECURITIES COMMISSION 
NOR HAS THE COMMISSION OR ANY STATE SECURITIES 
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY 
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE 
CONTRARY IS A CRIMINAL OFFENSE.
SPONSOR:
 PaineWebber
   Incorporated
      Read and retain both parts of this 
      prospectus for future reference.
Prospectus Part A dated November 24, 1997

ESSENTIAL INFORMATION REGARDING THE TRUST
Securities in the Trust Portfolio
 The Trust consists of the Securities indicated 
under "Schedule of Investments", all 
undistributed interest received or accrued on 
the Securities, and any undistributed cash 
realized from the sale, redemption or other 
disposition of the Securities. The Trust 
portfolio consists of 14 issues of Bonds by 
issuers located in 10 states in the United 
States. All of the Bonds in the Trust were, as 
of the Initial Date of Deposit, "investment 
grade" municipal bonds.
 On August 31, 1997, the aggregate market value 
of the Securities in the Trust, based on the bid 
side of the market, was $6,938,928.
 One of the issues of Bonds in the Trust is a 
general obligation bond. A general obligation 
bond is a bond secured by the power of an issuer 
to levy ad valorem taxes. Thirteen issues of 
Bonds in the Trust are revenue bonds payable 
from revenues derived by the issuers, and while 
income to pay such Bonds may be derived from 
more than one source, the primary source of such 
income, along with the number of issues of the 
Trust portfolio deriving income from such source 
are as follows: 2 Electric and Power facilities; 
1 Health and Hospital facility; 2 Resource 
Recovery facilities; 7 Refunded Bonds and 1 Toll 
Road. The Trust may be considered "concentrated" 
in the following categories of Bonds:
categories of Bonds:
                       Percentage of
                       Aggregate    
                       Market Value 
                       of Trust     
Category of Bond       Portfolio    
Refunded               44%          
 See "Summary of Portfolio" contained in Part B 
for a summary of the Investment risks associated 
with the Securities contained in the Trust.

Ratings
 On the Initial Date of Deposit all of the Bonds 
were rated a minimum of A by Standard & Poor's 
Corporation or Moody's Investors Service, Inc. 
The ratings may have changed and may continue to 
change after the Initial Date of Deposit. On 
August 31, 1997 the percentage of the total 
aggregate market value of bonds in the portfolio 
in each rating category was as follows: AAA, 4%; 
AA, 11%; A, 26%; BBB+, 7%; Aaa (Moody's), 18%; A 
(Moody's), 26% and NR, 8%. (See "Summary of 
Portfolio" and "Bond Ratings" in Part B and 
"Schedule of Investments" in Part A).
 See "Summary of Portfolio" contained in Part B 
for a summary of investment risks associated 
with the Securities contained in the Trust.

Tax Status of the Trust
 At the time of issuance of the Securities, 
opinions regarding the validity of such 
Securities and the exemption from federal income 
tax of interest on such Securities were rendered 
by bond counsel to the respective issuers.  
Neither the Sponsor, the Trustee, nor counsel to 
either has made any review of the proceedings 
relating to the issuance of the Securities or 
the basis for such opinions.  In the case of 
certain Securities in the Trust, the opinions of 
bond counsel indicate that interest on such 
obligations received by a "substantial user" of 
the facilities being financed with the proceeds 
of such obligations, or "related person," for 
periods such obligations are held by such 
"substantial user" or "related person," will not 
be exempt from federal income tax.  Interest 
income attributable to such Securities received 
by a Unitholder who is a "substantial user" or 
"related person" may be taxable to such 
Unitholder.
 In the opinion of Carter, Ledyard & Milburn, 
counsel to the Sponsor, under existing law:
 (i) The Trust is not an association taxable as 
a corporation for U.S. federal income tax 
purposes but will be governed by the provisions 
of Subchapter J (relating to Trusts) of Chapter 
1, Internal Revenue Code of 1986 (the "Code").  
Each Unitholder will be considered as owning a 
pro rata share of each asset of the respective 
Trust in the proportion that the number of Units 
of such Trust held by him bears to the total 
number of outstanding Units of such Trust.  
Under Subpart E, Subchapter J of Chapter I of 
the Code, income of the Trust will be treated as 
income of each Unitholder of the Trust in the 
proportion described.  Accordingly, to the 
extent that the income of the Trust consists of 
interest and original issue discount excludable 
from gross income under Section 103 of the Code, 
such income will be excludable from federal 
gross income of the Unitholder, except in the 
case of a Unitholder who is a substantial user 
(or a person related to such user) of a facility 
financed through issuance of any industrial 
development bonds or certain private activity 
bonds held by the Trust.  All taxpayers are 
nevertheless required to disclose to the 
Internal Revenue Service the amount of tax-
exempt interest earned during the year.  In the 
case of certain corporations, interest on all of 
the Securities is included in computing the 
alternative minimum taxable income pursuant to 
Section 56(c) of the Code.
 (ii)  If the Trustee disposes of a Security 
(whether by sale, payment at maturity, 
redemption or otherwise), gain or loss is 
recognized to the Unitholder.  A Unitholder will 
also be considered to have disposed of all or a 
portion of his pro rata portion of each Security 
when he sells or redeems some or all of his 
Units.  Such gain or loss is measured by 
comparing the Unitholder's share of such 
proceeds (or, in the case of a sale or 
redemption of Units, the portion of the proceeds 
allocable to a Security) with the Unitholder's 
adjusted basis for such Security. 
 (iii) Under the income tax laws of the State 
and City of New York, the Trust is not an 
association taxable as a corporation and income 
received by the Trust will be treated as the 
income of the Unitholders in the same manner as 
for federal income tax purposes, but will not be 
tax-exempt except to the extent that such income 
is earned on bonds in the Trust that are 
otherwise tax-exempt for New York purposes.
Additional Tax Considerations
 1.  Tax basis.  A Unitholder's initial basis in 
his Units will be equal to the cost of his 
Units, including any up-front or deferred sales 
charge and the organizational expenses borne by 
the Unitholder.  Such basis must be apportioned 
among each of the Securities and other assets of  
the Trust, as of the date the Units were 
acquired, ratably according to their values as 
of such date (or the nearest valuation date). A 
Unitholder's tax basis for his Units and for his 
fractional interest in each Trust asset must be 
reduced by the amount of his aliquot share of 
accrued interest received by the Trust, if any, 
after the date of purchase of his Units, to the 
extent that such accrued interest was included 
in the cost of his Units; must also be reduced 
by the annual amortization of bond premium, if 
any, on Securities held by the Trust; and is 
increased by the Unitholder's share of accrued 
original issue discount (and market discount, if 
the Unitholder elects to include market discount 
in income as it accrues) with respect to each 
Security held by the Trust which, at the time 
the Security was issued, had original issue 
discount (or which was purchased with market 
discount).
 2.  Bond premium.  If a Security is purchased 
for a premium over its redemption price, the 
amount of the premium is included in the tax 
basis of the Security.  Such premium is 
amortized over the remaining term of the 
Security, and the tax basis of the Security is 
reduced each tax year by the amount of the 
premium amortized in that tax year.  As a 
result, under certain circumstances Unitholders 
may realize a taxable gain upon disposition of 
Units even though such Units are sold or 
redeemed for an amount equal to or less than 
their original cost.
 3.  Original issue discount.  In the case of 
any Security held by the Trust where the "stated 
redemption price at maturity" exceeds the "issue 
price," such excess (subject to a de minimis 
rule) constitutes original issue discount.  In 
the case of any Security held by the Trust the 
interest on which is excludable from gross 
income under Section 103 of the Code, any 
original issue discount which accrues with 
respect thereto will be treated as interest 
which is excludable from gross income under 
Section 103 of the Code.  With respect to any 
purchaser of Securities subsequent to their 
original issuance, Section 1272(a)(7) of the 
Code provides for a reduction, under certain 
circumstances, in the accrued "daily portion" of 
such original issue discount. 
 4.  Market discount.  The Code subjects tax-
exempt bonds to the market discount rules of the 
Code effective for bonds purchased after April 
30, 1993.  In general, market discount is the 
amount (if any) by which the stated redemption 
price at maturity exceeds an investor's purchase 
price (except to the extent that such 
difference, if any, is attributable to original 
issue discount not yet accrued) subject to a 
statutory de minimis rule. Market discount can 
arise based on the price the Trust pays for 
Securities or the price a Unitholder pays for 
his Units.  Under the Code, accretion of market 
discount is taxable as ordinary income; under 
prior law, the accretion had been treated as 
capital gain.  Market discount that accretes 
while the Trust holds a Security would be 
recognized as ordinary income by the Unitholders 
when principal payments are received on the 
Security, upon sale or at redemption (including 
early redemption), or upon the sale or 
redemption of his or her Units, unless a 
Unitholder elects to include market discount in 
taxable income as it accrues.
 5.  Corporate alternative minimum tax.  Because 
the Trust does not include any "specified 
private activity bonds" within the meaning of 
Section 57(a)(5) of the Code issued on or after 
August 8, 1986, none of the Trust's interest 
income shall be treated as an item of tax 
preference when computing the alternative 
minimum tax.  In the case of corporations, the 
alternative minimum tax depends upon the 
corporation's alternative minimum taxable income 
("AMTI"), which is the corporation's taxable 
income with certain adjustments.
 Pursuant to Sections 56(c) and (g) of the Code, 
one of the adjustment items used in computing 
AMTI of a corporation (other than an S 
Corporation, Regulated Investment Company, Real 
Estate Investment Trust or REMIC) is an amount 
equal to 75% of the excess of such corporation's 
"adjusted current earnings" over an amount equal 
to its AMTI (before such adjustment item and the 
alternative tax net operating loss deduction).  
"Adjusted current earnings" includes all tax-
exempt interest, including interest on all 
Securities in the Trust, and tax-exempt original 
issue discount.
 Effective for taxable years beginning after 
December 31, 1997, the alternative minimum tax 
will not apply to corporations having annual 
gross receipts, generally, not in excess of $5 
million.
 6.  Disallowance of related items.  Under 
Section 265 of the Code, interest on 
indebtedness incurred or continued to purchase 
or carry Units is not deductible for federal 
income tax purposes.  Under rules used by the 
Internal Revenue Service for determining when 
borrowed funds are considered used for the 
purpose of purchasing or carrying particular 
assets, the purchase of Units may be considered 
to have been made with borrowed funds even 
though the borrowed funds are not directly 
traceable to the purchase of Units. Also, under 
Section 265, a Unitholder will generally not be 
entitled to a deduction for his pro rata share 
of fees and expenses of the Trust, or for the 
amortization of bond premium, because they are 
incurred in connection with the production of 
tax-exempt income.  
 7.  Taxability of Social Security benefits.  
Code Section 86 provides that a portion of 
social security benefits are includible in 
taxable income for taxpayers whose "modified 
adjusted gross income", combined with 50% of 
their social security benefits, exceeds a base 
amount.  The base amount is $25,000 for an 
individual, $32,000 for a married couple filing 
a joint return, and zero for married persons 
filing separate returns.  Under Code Section 86, 
interest on tax-exempt bonds is to be added to 
adjusted gross income for purposes of 
determining whether an individual's income 
exceeds the base amount.
 The foregoing discussion relates only to U.S. 
federal and certain aspects of New York State 
and City income taxes.  Depending on their state 
of residence, Unitholders may be subject to 
state and local taxation and should consult 
their own tax advisers in this regard.  The 
preceding discussion also omits certain rules 
applicable to certain financial institutions, 
insurance companies, foreign corporations, S 
corporations and other entities subject to 
special rules under the Internal Revenue Code.

Co-Trustees
 The Co-Trustees are The First National Bank of 
Chicago, a national banking association with its 
corporate trust office at One First National 
Plaza, Suite 0126, Chicago, Illinois 60670-0126 
(which is subject to supervision by the 
Comptroller of the Currency, the Federal Deposit 
Insurance Corporation and the Board of Governors 
of the Federal Reserve System) and Investors 
Bank & Trust Company, a Massachusetts trust 
company with its office at Hancock Towers, P.O. 
Box 9130, Boston, Massachusetts 02117-9130, 
telephone no. 1-800-356-2754 (which is subject 
to supervision by the Massachusetts Commissioner 
of Banks, the Federal Deposit Insurance 
Corporation and the Federal Reserve System).

ESSENTIAL INFORMATION REGARDING THE TRUST
AS OF AUGUST 31, 1997

Initial Date of Deposit and of Trust Indenture
and Agreement
September 13, 1991

Principal Amount of Bonds in Trust
$6,525,000

Number of Units Outstanding
6,599

Minimum Purchase
1 Unit

Fractional Undivided Interest in Trust Represented
by each Unit
1/6,599th

Public Offering Price
Aggregate Bid Price of Bonds in Trust$6,938,115 *~
Divided by 6,599 Units$1,051.39 *~
Plus Sales Charge of
2.23% of Public Offering Price23.95
Public Offering Price per Unit$1,075.34 *~

Redemption Value per Unit
$1,051.39 *~

Excess of Public Offering Price per Unit Over
Redemption Value per Unit
$23.95

Sponsor's Repurchase Price per Unit
$1,051.39 *~

Excess of Public Offering Price per Unit Over
Sponsor's Repurchase Price per Unit
$23.95

Minimum Principal Distribution
No distribution need be made from Principal
Account if balance of Account is less than $8,000.

Evaluation Time
4 P.M. New York Time

Mandatory Termination Date * *
January 1, 2041

Discretionary Termination
Indenture may be terminated if value of Trust is
less than $1,600,000.
<TABLE>
           INTEREST DISTRIBUTION INFORMATION
<CAPTION>
                                                                      Monthly        
<S>                                                                   <C>
Gross annual interest income per unit                                 $68.29         
Less estimated annual fees and expenses per unit * * * *              2.51           
Less Sponsor's annual fee per unit * * * *                            .28            
Estimated net annual interest income per unit                         $65.50         
Estimated interest distribution per unit                              $5.45          
Daily rate at which estimated net interest accrues per unit           $.1816         
Estimated current return * * *                                        6.09%          
Record dates                                                          1st of         
                                                                      each month     
Interest distribution dates                                           15th of        
                                                                      each month     
Trustee's annual fee per $1,000 principal amount of bonds * * * *     $1.09          
Evaluator's daily fee per bond * * * *                                .30            
 __________________
          * Plus accrued interest.
       * * The actual termination of the 
Trust may be considerably earlier (see 
"Termination of the Trust" in Part B).
     * * * The estimated current return is 
increased for transactions entitled to a 
reduced sales charge (see "Public 
 Offering Price of Units" in Part B).
   * * * * See "Expenses of the Trust" in 
Part B.
         ~ Includes overdistributed principal 
funds.
</TABLE>
<TABLE>
               FINANCIAL SUMMARY
The following sets forth a summary of 
distributions and redemption values per unit 
for The Municipal Bond Trust, Series 231.
<CAPTION>
                                    DISTRIBUTIONS
               PERIOD ENDING        PER UNIT
<S>            <C>                  <C>
MONTHLY        August 31, 1995      $66.78
               August 31, 1996       65.88
               August 31, 1997       65.52
PRINCIPAL      August 31, 1995        2.01
               August 31, 1996        2.43
               August 31, 1997        2.30
As of December 31, 1995, 1996 and August 31, 
1997, the redemption values per unit were 
$1,069.69, $1,049.32, and $1,051.39 plus 
accrued interest to the respective dates.
</TABLE>
<TABLE>
            REPORT OF INDEPENDENT AUDITORS
<C>                                 <S>
THE UNITHOLDERS, SPONSOR AND CO-TRUSTEES
THE MUNICIPAL BOND TRUST, SERIES 231:
 We have audited the accompanying statement of 
financial condition, including the schedule of 
investments, of The Municipal Bond Trust, Series 
231 as of August 31, 1997 and the related 
statements of operations and changes in net 
assets for each of the three years in the period 
then ended. These financial statements are the 
responsibility of the Co-Trustees. Our 
responsibility is to express an opinion on these 
financial statements based on our audits.  
 We conducted our audits in accordance with 
generally accepted auditing standards. Those 
standards require that we plan and perform the 
audit to obtain reasonable assurance about 
whether the financial statements are free of 
material misstatement. An audit includes 
examining, on a test basis, evidence supporting 
the amounts and disclosures in the financial 
statements. Our procedures included confirmation 
of the securities owned as of August 31, 1997, 
as shown in the statement of financial condition 
and schedule of investments, by correspondence 
with the Co-Trustees. An audit also includes 
assessing the accounting principles used and 
significant estimates made by the Co-Trustees, 
as well as evaluating the overall financial 
statement presentation. We believe that our 
audits provide a reasonable basis for our 
opinion.
 In our opinion, the financial statements 
referred to above present fairly, in all 
material respects, the financial position of The 
Municipal Bond Trust, Series 231 at August 31, 
1997 and the results of its operations and 
changes in its net assets for each of the three 
years in the period then ended, in conformity 
with generally accepted accounting principles.
                            ERNST & YOUNG LLP
New York, New York
November 14, 1997
</TABLE>
<TABLE>
             THE MUNICIPAL BOND TRUST
                     SERIES 231
           STATEMENT OF FINANCIAL CONDITION
                    August 31, 1997
<CAPTION>
                   ASSETS
<S>                                                                         <C>        <C>
Investment in municipal bonds - at market value (Cost $6,370,330)                       
(note 4 to schedule of investments)                                                    $6,938,928
Accrued interest receivable                                                            104,634
Cash                                                                                   30,187
Total Assets                                                                           $7,073,749
          LIABILITIES AND NET ASSETS
Distribution payable (note E)                                                          $35,965
Accrued expenses payable                                                               5,654
Total Liabilities                                                                      41,619
Net assets (6,599 units of fractional undivided interest outstanding):                  
Cost to investors (note B)                                                 $6,688,010   
Less gross underwriting commissions (note C)                               (317,680)    
                                                                           6,370,330    
Net unrealized market appreciation (note D)                                568,598      
Net amount applicable to unitholders                                       6,938,928    
Undistributed investment income-net                                        94,015       
Overdistributed proceeds from bonds sold or redeemed                       (813)        
Net Assets                                                                             7,032,130
Total Liabilities and Net Assets                                                       $7,073,749
Net Asset Value Per Unit                                                               $1,065.64
              STATEMENT OF OPERATIONS
<CAPTION>
                                                                 Year Ended August 31, 
                                                                  1997         1996         1995
<S>                                                               <C>          <C>          <C>
Investment Income - Interest                                      $469,439     $505,164     $541,404
Less expenses:                                                                               
Trustee's fees, Evaluator's fees and expenses                     18,894       19,417       20,384
Total expenses                                                    18,894       19,417       20,384
Investment Income-net                                             450,545      485,747      521,020
Realized and unrealized gain (loss) on investments-net:                                      
Net realized gain (loss) on securities transactions               35,383       28,631       (15,247)
Net change in unrealized market appreciation                      14,594       4,611        122,910
Net gain on investments                                           49,977       33,242       107,663
Net increase in net assets resulting from operations              $500,522     $518,989     $628,683
   See accompanying notes to financial statements.
</TABLE>
<TABLE>
           THE MUNICIPAL BOND TRUST
                   SERIES 231
       STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
                                                                 Year Ended August 31, 
                                                                  1997         1996         1995
<S>                                                               <C>          <C>          <C>
Operations:                                                                                  
Investment income-net                                             $450,545     $485,747     $521,020
Net realized gain (loss) on securities transactions               35,383       28,631       (15,247)
Net change in unrealized market appreciation                      14,594       4,611        122,910
Net increase in net assets resulting from operations              500,522      518,989      628,683
Less: Distributions to Unitholders                                                           
Investment Income                                                 448,127      484,000      520,874
Principal                                                         16,137       18,315       15,855
Total Distributions                                               464,264      502,315      536,729
Less: Units Redeemed by Unitholders (Note F)                                                 
Value of units at date of redemption                              548,216      470,261      333,457
Accrued interest at date of redemption                            9,358        7,385        5,624
Total Redemptions                                                 557,574      477,646      339,081
Decrease in net assets                                            (521,316)    (460,972)    (247,127)
Net Assets:                                                                                  
Beginning of period                                               7,553,446    8,014,418    8,261,545
End of period                                                     $7,032,130   $7,553,446   $8,014,418
   See accompanying notes to financial statements.
            NOTES TO FINANCIAL STATEMENTS
                August 31, 1997
(A) The financial statements of the Trust are 
prepared on the accrual basis of accounting.  
Bond transactions are 
  accounted for on the date the bonds are 
purchased or sold.
(B) Cost to the investors represents the initial 
public offering price as of the initial date of 
deposit computed on the basis 
  set forth under "Public Offering Price Of 
Units" included in Part B, adjusted for bonds 
called or sold since the initial 
  date of deposit.
(C) The aggregate sales charge was computed on 
the basis set forth under "Public Offering Price 
of Units" included in
  Part B.
(D) At August 31, 1997, the gross unrealized 
market appreciation was $568,598 and the gross 
unrealized market 
  depreciation was $0. The net unrealized market 
appreciation was $568,598.
(E) Distributions of the net investment income 
to Unitholders are declared and paid monthly. 
See the Financial Summary 
  included in Part A.
(F) The following units were redeemed with 
proceeds of bonds sold as follows:
<CAPTION>
                                                                 Year Ended August 31, 
                                                                  1997         1996         1995
<S>                                                               <C>          <C>          <C>
Number of units redeemed                                          524          446          319
Redemption amount                                                 $557,574     $477,646     $339,081
</TABLE>
<TABLE>
THE MUNICIPAL BOND TRUST, SERIES 231
Schedule of Investments as of August 31, 1997
<CAPTION>
                                                               Coupon      Redemption
       Aggregate                                               Rate/       Features(3)
Lot    Principal                                              Maturity     C-Callable        Market
No.     Amount             Description           Rating(1)     Date(5)   S.F.-Sinking Fund   Value(4)
<C>    <C>         <S>                             <C>       <C>         <C>                <C>
1.     $255,000    COLORADO HEALTH FACILITIES AU-
                   THORITY HOSPITAL SYSTEM REVE-
                   NUE BONDS (SWEDISH MEDICAL
                   CENTER PROJECT) SERIES 1990 A
                   (REFUNDED)                       Aaa(2)   7 1/2%       C.10/01/00@102    $283,139
                                                             10/01/2000   S.F. 10/01/2009
2.     500,000     BROWARD COUNTY, FLORIDA RE-
                   SOURCE RECOVERY REVENUE
                   BONDS, SERIES 1984 (BROWARD
                   WASTE ENERGY COMPANY, L.P.
                   NORTH PROJECT)                   A(2)     7.95%        C.12/01/99@103    544,340
                                                             12/01/2008   S.F. 12/01/1997
3.     235,000     CITY OF CHICAGO, ILLINOIS WATER
                   REVENUE BONDS SERIES 1989 (RE-
                   FUNDED)                          AA-      7.20%        C.11/15/99@102    254,474
                                                             11/15/1999   S.F. 11/01/2007
4.     600,000     CITY OF SULLIVAN, INDIANA POLLU-
                   TION CONTROL REFUNDING REVE-
                   NUE BONDS, 1991 SERIES (HOOSIER
                   ENERGY RURAL ELECTRIC COOP-
                   ERATIVE, INC. MEROM STATION
                   PROJECT).                        A        7.10%        C.04/01/01@1      644,130
                                                             04/01/2019   S.F. NONE
5.     600,000     NORTH CAROLINA EASTERN MUNICI-
                   PAL POWER AGENCY POWER SYS-
                   TEM REVENUE BONDS, REFUNDING
                   SERIES 1987 A (REFUNDED)         Aaa(2)   4 1/2%       C.01/01/22@100    532,650
                                                             01/01/2022   S.F. 01/01/2021
6.     480,000     COUNTY OF WARD, NORTH DAKOTA
                   HEALTH CARE FACILITIES REFUND-
                   ING REVENUE BONDS, (TRINITY OBLI-
                   GATED GROUP) SERIES 1991 B       BBB+     7 1/2%       C.07/01/01@102    517,459
                                                             07/01/2021   S.F. 07/01/2012
7.     245,000     TULSA INDUSTRIAL AUTHORITY
                   (OKLAHOMA) HOSPITAL REVENUE
                   BONDS (TULSA REGIONAL MEDICAL
                   CENTER) SERIES 1991A (REFUNDED)  AAA      7 5/8%       C.06/01/01@102    276,397
                                                             06/01/2001   S.F. 06/01/2007
8.     500,000     MONTGOMERY COUNTY INDUSTRIAL
                   DEVELOPMENT AUTHORITY (PENN-
                   SYLVANIA) RESOURCE RECOVERY
                   REVENUE BONDS (MONTGOMERY
                   COUNTY PROJECT) SERIES 1989      A-       7 1/2%       C.01/01/03@100    547,555
                                                             01/01/2012   S.F. 01/01/2005
9.     505,000     PENNSYLVANIA INDUSTRIAL DEVEL-
                   OPMENT AUTHORITY ECONOMIC
                   DEVELOPMENT REVENUE BONDS,
                   SERIES A (REFUNDED)              NR       7.00%        C.07/01/01@102    558,283
                                                             07/01/2001   S.F. 01/01/2002
10.    525,000     MATAGORDA COUNTY NAVIGATION
                   DISTRICT NUMBER ONE (TEXAS) AD-
                   JUSTABLE RATE COLLATERALIZED
                   POLLUTION CONTROL REVENUE
                   BONDS (CENTRAL POWER AND
                   LIGHT COMPANY PROJECT) SERIES
                   1984A                            A        7 1/2%       C.12/15/99@1      575,122
                                                             12/15/2014   S.F. NONE
                                                                                             (Continued)
</TABLE>
<TABLE>
THE MUNICIPAL BOND TRUST, SERIES 231
Schedule of Investments as of August 31, 1997
                                                               Coupon      Redemption
       Aggregate                                               Rate/       Features(3)
Lot    Principal                                              Maturity     C-Callable        Market
No.     Amount             Description           Rating(1)     Date(5)   S.F.-Sinking Fund   Value(4)
<C>    <C>         <S>                             <C>       <C>         <C>                <C>
11.    $575,000    TEXAS TURNPIKE AUTHORITY, DAL-
                   LAS NORTH TOLLWAY REVENUE
                   BONDS SERIES 1989                A(2)     6.00%        C.01/01/98@100    $576,846
                                                             01/01/2020   S.F. 01/01/2016
12.    490,000     SEATTLE INDIAN SERVICES COMMIS-
                   SION (WASHINGTON) SPECIAL OBLI-
                   GATION REFUNDING BONDS, SERIES
                   1991                             AA+      6 1/2%       C.11/01/01@100    518,459
                                                             11/01/2017   S.F. 11/01/2012
13.    415,000     MUNICIPALITY OF METROPOLITAN
                   SEATTLE (WASHINGTON) SEWER
                   REVENUE BONDS, SERIES T (RE-
                   FUNDED)                          Aaa(2)   6 7/8%       C.01/01/00@1      446,984
                                                             01/01/2000   S.F. NONE
14.    600,000     WASHINGTON HEALTH CARE FACILI-
                   TIES AUTHORITY REVENUE BONDS,
                   SERIES 1991 (YAKIMA VALLEY
                   MEMORIAL HOSPITAL ASSOCIATION)
                   (REFUNDED)                       A(2)     7 1/4%       C.01/01/01@102    663,090
                                                             01/01/2001   S.F. 01/01/2004
     $6,525,000                                                                           $6,938,928
 (1) All ratings are by Standard & 
Poor's Corporation unless otherwise 
indicated.  A brief description of 
applicable rating symbols is given under 
"Bond Ratings" included in Part B.  For 
concentration of credit risk, see 
"Securities in the Trust Portfolio" in 
Part A.
 (2) Moody's Investors Service, Inc.'s 
rating.  A brief description of 
applicable rating symbols is given under 
"Bond Ratings" included in Part B.
 (3) C._Indicates the first year in 
which an issue of bonds is redeemable in 
whole, or in part, by the operation of 
the optional call provisions, and the 
redemption price for that year; unless 
otherwise indicated, each issue 
continues to be redeemable at declining 
prices thereafter but not below par.  
S.F._Indicates the next date on which an 
issue of bonds is subject to scheduled 
sinking fund redemption and the 
redemption price for that date; unless 
otherwise indicated, such issue of bonds 
is subject to scheduled sinking fund 
redemption at par.
 Bonds listed as non-callable, as well 
as those listed as callable, may also be 
redeemable at par, under certain 
circumstances, from special redemption 
payments.
 (4) The Market Value is determined by 
the Evaluator on the bid side of the 
market, on a basis identical to that set 
forth under "Public Offering Price of 
Units" included in Part B.
 (5) The Maturity Date noted for all 
Refunded Bonds is the date on which such 
Bonds have been irrevocably called for 
redemption by the issuers thereof.
</TABLE>
    

             MUNICIPAL BOND TRUST
               PROSPECTUS PART B 
PART B OF THIS PROSPECTUS MAY NOT BE DISTRIBUTED
          UNLESS ACCOMPANIED BY PART A.
               NATURE OF THE TRUST
 Each series of The Municipal Bond Trust is a 
separate but similar unit investment trust, 
formed for the purpose of obtaining federally 
tax-exempt interest income consistent with the 
preservation of capital and diversification of 
risk through investment in a fixed portfolio 
comprised of "investment grade" (as of the 
Initial Date of Deposit ) interest-bearing 
Bonds. State Trusts were formed for the 
additional purpose of obtaining interest income 
exempt from state income taxes for purchasers 
who qualify as residents of the state for which 
each such Trust is named. The Sponsor and the 
Trustee do not have control over the course of 
payment of the principal of and interest on the 
Securities, therefore they cannot guarantee that 
the objectives of the Trust will be achieved. 
The interest on the Bonds, in the opinion of 
counsel to the issuers of such Bonds, is, or 
upon their issuance and delivery will be, exempt 
from present Federal income taxes. Capital 
gains, if any, will be subject to taxation.
 The portfolio of the Trust consists of 
interest-bearing Securities, issued by or on 
behalf of states, counties and municipalities 
within the United States, and authorities, 
agencies and other such political subdivisions.

              CREATION OF THE TRUST
 The Trust was created under the laws of the 
State of New York pursuant to a Trust Indenture 
and Agreement* (the "Indenture"), dated as of 
the Initial Date of Deposit, among PaineWebber 
Incorporated, as Sponsor, the Trustee identified 
in Part A of this prospectus and Kenny 
Information Systems, Inc., a division of J.J. 
Kenny Co., Inc. as Evaluator.
 On the Initial Date of Deposit, the Sponsor 
deposited with the Trustee the Securities or 
confirmations of contracts for the purchase of 
the Securities at prices determined by the 
Evaluator on the basis of current offering 
prices of the Securities. Confirmations of 
contracts for the purchase of the Bonds were 
delivered to the Trustee together with an 
irrevocable letter of credit drawn on a 
commercial bank in an amount sufficient for 
their purchase. Following the deposit, the 
Trustee delivered to the Sponsor registered 
Certificates for Units evidencing the entire 
ownership of the Trust. Each Unit represents a 
fractional undivided interest in the Trust in an 
amount equal to one divided by the total number 
of Units outstanding. On the Initial Date of 
Deposit there was one Unit for each $1,000 face 
amount of Securities deposited in the Trust.

              SUMMARY OF PORTFOLIO
 An investment in Units of the Trust should be 
made with an understanding of the risks which an 
investment in fixed rate long-term debt 
obligations may entail, including the risk that 
the value of the Trust portfolio and hence of 
the Units will decline with increases in 
interest rates. The recent period of high 
inflation, together with the fiscal measures 
adopted to attempt to deal with it, has seen 
wide fluctuations in interest rates and thus in 
the value of fixed rate long-term debt 
obligations generally. The Sponsor cannot 
predict whether such fluctuations will continue 
in the future.
 As set forth under "Essential Information" and 
"Schedule of Investments" in Part A, the Trust 
may contain or be concentrated in one or more of 
the categories of Securities referred to below. 
The types of issuers and percentages of any 
concentrations for this Trust are set forth in 
Part A. These categories are described in Part B 
because an investment in Units of the Trust 
should be made with an understanding of the 
risks which these investments may entail. Part B 
also contains a description of the features of 
this Trust.

General Obligation Bonds
 General obligation debt of an issuer that is a 
political subdivision or instrumentality of a 
state is typically secured by the full faith and 
credit of the issuer, encompassing its ability 
to levy an unlimited ad valorem tax on real 
property or other revenue streams, such as sales 
or income taxes. The fiscal condition of an 
issuer may be affected by socioeconomic factors 
beyond the issuer's control (such as relocation 
by a major employer) or other unanticipated 
events, including: natural disasters, declines 
in the state's industrial base or an inability 
to attract new industries, imposition of tax 
rate decreases or appropriations limitations by 
legislation or initiative; increased 
expenditures mandated by Federal or state law or 
by judicial decree; reduction of unrestricted 
federal or state aid and of revenue-sharing 
programs due to subsequent legislative changes 
in appropriations or aid formulas; or 
disallowances by the Federal or state 
governments for categorical grants. The fiscal 
condition of an issuer that is a political 
subdivision or instrumentality of a state (such 
as a county, city, school district or other 
entity providing public services) is related to 
the size and diversification of its tax and 
revenue base and to such other factors as: the 
effect of inflation on the general operating 
budget and of other costs, including salaries 
and fringe benefits, energy and solid waste 
disposal; changes in state law and statutory 
interpretations affecting traditional home rule 
powers (which vary from state to state); levels 
of unrestricted state aid or revenue-sharing 
programs and state categorical grants subject to 
annual appropriation by a state legislature; 
increased expenditures mandated by state law or 
judicial decree; and disallowances for expenses 
____________
 *Reference is hereby made to said Trust 
Indenture and Agreement and any statements 
contained herein are qualified in their entirety 
by the provisions of said Trust Indenture and 
Agreement.
incurred under Federal or state categorical 
grant programs. The local economy may be or 
become concentrated (i) in a single industry, 
which may be affected by natural or other 
disasters or by fluctuations in commodity 
prices, or (ii) in a particular company, the 
operations of which may be impaired due to labor 
disputes, relocation, bankruptcy or corporate 
take-over. Such economic factors may, in turn, 
affect local tax collections and service 
demands. The ability of an issuer to levy 
additional taxes may be subject to state 
constitutional provisions, assent of the state 
legislature or voter approval in a local 
referendum, or constrained by economic or 
political considerations. Recent changes in 
Federal welfare policy may have substantial 
negative impact on certain states and localities 
within such states, which may in turn make their 
ability to maintain balanced budgets more 
difficult in future years.

Revenue Bonds
 Revenue Bonds are securities issued by states, 
municipalities, public authorities and other 
similar entities to finance the cost of 
constructing, acquiring or improving various 
projects. Unlike general obligation bonds, 
municipal revenue bonds are not backed by their 
issuer's taxing power or full faith and credit 
and payment on municipal revenue bonds is 
generally dependent solely upon revenues 
generated by the project or in some cases, 
specific state appropriations or excise taxes. 
Examples of municipal revenue bonds are: housing 
facility securities, airport facilities, power 
and electronic facilities, and others listed 
below in bold typeface. A brief discussion of 
some of the risks associated with such revenue 
bonds follows.

Housing Facility Securities
 These Securities are typically secured by 
mortgage revenues derived by state housing 
finance agencies, municipal housing authorities 
or certain non-profit organizations from 
repayments on mortgage and home improvement 
loans made by such entities. Special 
considerations affecting housing securities 
include: the condition of the local housing 
market, competition from conventional mortgage 
lenders, fluctuations in interest rates, 
increasing construction costs and the ability of 
the Issuers, lenders, servicers and borrowers to 
maintain program compliance under applicable 
statutory provisions. Federal tax legislation 
adopted during the 1980s imposed progressively 
more restrictive requirements for post-issuance 
compliance necessary to maintain the tax 
exemption on both single family and multi-family 
housing securities. To maintain the security's 
tax exemption, the issuer may be required 
pursuant to the legal documents governing the 
Security to redeem all or a portion of such 
obligations at par; the Sponsor is unable to 
predict whether such redemptions will occur, or 
what effect, if any, such redemptions would have 
on any such Securities in the Trust. 
 Additional considerations with regard to 
single-family housing securities include: the 
underwriting and management ability of the 
issuers, lenders and servicers (i.e., the 
initial soundness of the loan and the effective 
use of available remedies should there be a 
default in loan payments); the financial 
condition and credit rating of the private 
mortgage insurer underwriting the insurance on 
the underlying mortgage or pool of mortgages; 
and special risks attendant to lending to 
mortgagors, most of whom are first time home 
buyers of low or moderate means. During periods 
of declining interest rates, there may be 
increased redemptions of single family housing 
securities from unexpended proceeds due to 
insufficient demand, because conventional 
mortgage loans may become available at interest 
rates equal to or less than the interest rates 
charged on the mortgage loans made available 
from bond proceeds. In addition, certain 
mortgage loans may be prepaid earlier than their 
maturity dates, because mortgage loans made with 
bond proceeds usually do not carry prepayment 
penalties. Additional considerations with regard 
to multi-family housing securities include: 
increasing operating costs; the ability or 
failure to increase rental charges; and the 
financial condition of housing authority Issuers 
and their ability to meet certain requirements 
under the Section 8 program of the United States 
Housing Act of 1937, as amended. Multi-family 
housing securities may also be subject to full 
or partial redemption at par from the proceeds 
of the sale, assignment or disposition of a 
defaulted mortgage loan or acceleration of 
principal payments thereunder; a condemnation or 
insurance award; or a result of the reduction of 
a required reserve fund.

Airport Facilities
 Bonds in the airport facilities category are 
payable from and secured by revenues derived 
from the gross airport operating income. The 
major portion of gross airport operating income 
is generally derived from fees received from 
signatory airlines pursuant to use agreements 
which consist of annual payments for airport 
use, occupancy of certain terminal space, 
facilities, service fees, concessions and 
leases. Airport operating income may be affected 
by local economic conditions, air traffic 
patterns, noise abatement restrictions or 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 
deregulation, recent consolidations through 
mergers and acquisitions, increased competition, 
excess industry capacity, fluctuations in fuel 
and other costs, traffic constraints and other 
factors. In particular, facilities with use 
agreements involving airlines experiencing 
financial difficulty may experience a reduction 
in revenue due to the possible inability of 
these airlines to meet their use agreement 
obligations. The Sponsor is now unable to 
predict what effect, if any, air transport 
industry conditions will have on the airport 
Bonds in the Trust.

Hospital and Health Care Facility Securities 
 Bonds in the hospital and health care 
facilities category are payable from revenues 
derived from hospital, mental health, nursing 
home and other health care facilities which, 
generally, were constructed or are being 
constructed with bond proceeds. Payment of such 
bonds derives generally from revenues of health 
care providers. The continuing availability of 
sufficient revenues is dependent upon several 
factors affecting all such facilities generally, 
including, among other factors: utilization 
rates; the cost and availability of malpractice 
insurance and the outcome of malpractice 
litigation; curtailment of operations due to 
shortages in qualified medical staff or labor 
disputes; changes in Federal, state and private 
reimbursement regulations and health care 
delivery programs. The extent of the AIDS 
epidemic is undetermined, and the Sponsor cannot 
predict its full impact on the health care 
system or particular issuers. Utilization rates 
for a particular facility may be determined by 
cost containment programs implemented by third 
party governmental providers or private 
insurers; long-term advances in health care 
delivery reducing demand for in-patient 
services; technological developments which may 
be effectively rationed by the scarcity of 
equipment or specialists; governmental approval 
and the ability to finance equipment 
acquisitions; increased competition due to 
elimination of certain certificate of need 
requirements in some states; and physicians' and 
public perceptions as to standards of care. 
Requirements for Federal or state licenses, 
certifications and contract eligibility and for 
accreditation are subject to change, and may 
require participating facilities to effect 
costly modifications in operations. Medicare 
payments have been, and may continue to be, 
reduced under legislation adopting deficit 
reduction measures. Additionally, certain states 
have recently implemented prospective payment 
systems for their Medicaid programs, and have 
adopted other changes, including enrollment 
restrictions. The Sponsor cannot predict the 
effect, if any, of further reductions in 
Medicare and Medicaid payments on the revenues 
of Issuers of health care Securities in the 
Trust. Many hospitals, including certain issuers 
(or the conduit obligors) of Securities in the 
Trust, have been experiencing significant 
financial difficulties in recent years. 
Generally, a number of additional legislative 
proposals concerning health care may be 
introduced in Congress at any time. Recently, 
these proposals have covered a wide range of 
topics, including cost controls, national health 
insurance, incentives for competition in the 
provision of health care services, tax 
incentives and penalties related to health care 
insurance premiums, and promotion of prepaid 
health care plans. The Sponsor is unable to 
predict the effect of any of these proposals, if 
enacted, on any of the Bonds in the Trust 
portfolio. The Internal Revenue Service (the 
"IRS") has been engaged in a program of 
extensive audits of certain large tax-exempt 
hospitals and health care providers. Although 
such audits have not yet been completed there 
have been reports that the tax-exempt status of 
certain of these organizations may be revoked 
and/or that certain monetary penalties may be 
owed to the IRS.

Power and Electric Facility Securities 
 These Securities are typically secured by 
revenues derived from power generating 
facilities, which generally include revenues 
from the sale of electricity generated and 
distributed by power agencies using 
hydroelectric, nuclear, fossil fuel or other 
power sources. Certain aspects of the operation 
of such facilities, particularly with regard to 
generation and transmission at the wholesale 
level, are subject to federal regulation and 
more extensive regulation (affecting retail rate 
structures) is provided by state public service 
commissions. Special considerations include: 
restrictions on operations and increased costs 
and delays attributable to environmental statues 
and regulations; the difficulties of the 
utilities in financing or refinancing large 
construction programs and of the capital markets 
in absorbing utility debt and equity securities; 
fluctuations in fuel supplies and costs, and 
costs associated with conversion to alternate 
fuel sources; uncertainties with regard to 
demand projections due to changing economic 
conditions, implementation of energy 
conservation measures and competitive 
cogeneration projects; and other technical and 
cost factors. Recent scientific breakthroughs in 
fusion energy and superconductive materials may 
cause current technologies for the generation 
and transmission of electricity to become 
obsolete during the life of the Securities in 
the Portfolio. Issuers relying upon 
hydroelectric generation may encounter contests 
when applying for periodic renewal of licenses 
to operate dams. Issuers relying upon coal as a 
fuel source may be subject to significant costs 
and operating restrictions to comply with 
emission standards which may be adopted to 
alleviate the problems associated with acid 
rain. Issuers relying upon fossil fuel sources 
and located in air quality regions designated as 
nonattainment areas may become subject to 
pollution control measures (which could include 
abandonment of construction projects in 
progress, plant shutdowns or relocation of 
facilities). In addition, such Securities are 
sometimes secured by payments to be made to 
state and local joint action power agencies 
pursuant to "take or pay" agreements. Such 
agreements have been held unenforceable by state 
courts in Idaho, Vermont and Washington, which 
may cause an examination of the legal structure 
of certain projects in other states and could 
possibly lead to litigation challenging the 
enforceability of such agreements. 
 Some of the issuers of Securities in the Trust 
may own, operate or participate on a contractual 
basis with nuclear generating facilities, which 
may experience additional problems including: 
the frequency and duration of plant shutdowns 
and associated costs due to maintenance or 
safety considerations; the problems and 
associated costs related to the use and disposal 
of radioactive materials and wastes in 
compliance with Federal and local law; the 
implementation of emergency evacuation plans for 
areas surrounding nuclear facilities; and other 
issues associated with construction, licensing, 
regulation, operation and eventual 
decommissioning of such facilities. These 
Securities may be subject to industry-wide 
fluctuations in market value as a consequence of 
market perception of certain highly publicized 
events, as in the Washington Public Power Supply 
System's defaults on its Project 4 and 5 revenue 
bonds and the 1988 bankruptcy filing by the 
Public Service Corporation of New Hampshire. 
Federal, state or municipal governmental 
authorities, or voters by initiative, may from 
time to time impose additional regulations or 
take such other governmental action which might 
cause delays in the licensing, construction or 
operation of nuclear power plants, or the 
suspension or cessation of operations of 
facilities which have been or are being financed 
by proceeds of certain Securities in the Trust. 
Additionally, the recent movement to introduce 
competition in the investor-owned electric 
utility industry is likely to affect, at least 
indirectly, municipal utility systems by driving 
them to maintain low rates. In an effort to keep 
their rates low, municipal utilities may 
experience difficulties in raising rates to 
completely recover their investment in 
generating plants.

Industrial Development/Pollution Control 
Securities 
 These Securities were generally issued prior to 
the enactment of 1986 Code restrictions, and are 
typically secured by payments made under a loan 
agreement entered into between the issuer and 
the obligor. In some cases, the Securities were 
additionally secured by guarantees provided by 
corporate guarantors or by a stand-by letter of 
credit issued by a bank. Special considerations 
include: the financial condition of the 
corporate obligor (or guarantor), especially as 
it may be affected by subsequent corporate 
restructuring or changes in corporate control.

Public Facilities Securities 
 These Securities are typically secured by 
revenues derived from either (i) payments 
appropriated by governmental entities for the 
use of equipment or facilities, such as 
administrative or correctional buildings, or 
(ii) user charges or other revenues derived from 
such operations as parking facilities, 
convention centers or sports arenas. In the 
first instance, the pledged revenues may be 
subject to annual appropriation by legislative 
body. In the latter case, the collection of 
revenues may be dependent upon the reliability 
of feasibility forecasts and assumptions 
concerning utilization rates. 

Resource Recovery/Solid Waste Securities 
 These Securities are typically secured by 
revenues derived from the sale of electricity or 
steam generated as a by-product of the process 
of incinerating solid waste, and from 
contractual tipping fees, user charges and 
ancillary recycling earnings. Special 
considerations include: the supply of solid 
waste at levels sufficient for the facility to 
operate at design capacity; the frequency and 
duration of plant shutdowns for maintenance; the 
treatment and disposal of fly ash which contains 
toxic substances, especially dioxin; compliance 
with air pollution control standards; 
unanticipated problems associated with the use 
of developing technologies; and the continuation 
of federal policies facilitating congeneration 
and certification of any particular qualifying 
facility. Governmental service contract payments 
may be subject to annual appropriation by a 
legislative body. Older facilities may require 
retrofitting to accommodate new technological 
developments or to comply with environmental 
standards. A recent decision of the United 
States Supreme Court limiting a municipality's 
ability to require the use of its facilities may 
have an adverse affect on the credit quality of 
certain securities.

Water and Sewer Facility Securities 
 Bonds described as "water and sewer" facilities 
Bonds are typically secured by a pledge of the 
net revenues derived from connection fees and 
user charges imposed by the enterprise. Such 
Bonds are subject to the risks typically 
associated with construction projects. Among the 
factors which may affect net revenues are the 
destruction of facilities due to natural or 
other disasters; relocation out of the service 
area by a major customer or customers due to 
economic factors beyond the issuer's control; or 
costs incurred due to prior periods of deferred 
maintenance or compliance with Federal or state 
environmental standards. Water system revenues 
may be additionally affected by the terms of 
supply allocations and service agreements with 
major wholesale customers and the imposition of 
mandatory conservation measures in response to 
drought. Sewer system revenues may be 
additionally affected by costs to comply with 
effluent and other standards pursuant to the 
Federal and state laws.

Student Loan Securities 
 Student loan revenue securities are issued 
either by non profit corporations organized for 
the purpose of acquiring student loans 
originated under the Higher Education Act ("the 
Act") or public agencies or instrumentalities of 
a state created to provide loans for educational 
purposes. Proceeds of securities issued by such 
entities generally are used to make or acquire 
student loans which are either (1) guaranteed by 
guaranty agencies and reinsured by the U.S. 
Secretary of Education, (2) are insured directly 
by the federal government or (3) not guaranteed 
at all (e.g. alternative or supplemental student 
loans). Bonds issued by such entities are 
generally secured by and dependent upon such 
state guarantee programs, Federal insurance and 
reimbursement programs, the proceeds from 
payment of principal and interest on the 
underlying student loans and federal interest 
subsidy and/or special allowance payments. 
Failure by the servicers of student loans on the 
guaranty agencies guaranteeing such loans to 
properly service and enforce the loans may cause 
the reimbursements to decline or be withheld 
under the Act, if applicable.
 Both the Act and the regulations promulgated 
thereunder have been the subject of extensive 
amendments in recent years, and the Sponsor can 
give no assurance that further amendment will 
not materially change the provisions or the 
effect thereof.
 The availability of various Federal payments in 
connection with the Federal student loan program 
is subject to Federal budgetary appropriation. 
In recent years, legislation has been enacted 
which has provided, for the recovery of certain 
advances previously made by the Federal 
government to state guaranty agencies in order 
to achieve deficit reduction. No representation 
is made as to the effect, if any, or future 
Congressional appropriation or legislation upon 
expenditures by the Department of Education or 
upon the financial condition of any guaranty 
agency.

Lease Payment Bonds
 Lease Payment bonds are generally issued by 
governmental financing authorities with no 
direct taxing power for the construction of 
buildings or the purchase of equipment to be 
used by a state or local government. Such bonds 
may be principally secured by governmental lease 
payments which in turn are subject to the budget 
appropriations of the participating governmental 
entity. A governmental entity that enters into a 
lease agreement cannot obligate future 
governments to make lease payments but generally 
will covenant to take such action as is 
necessary to include all lease payments due 
under an agreement in its annual budgets and to 
make the appropriations therefor. The failure of 
a governmental entity to meet its obligations 
under a lease could result in an insufficient 
amount of funds to cover payment of the Bonds 
secured by such lease payments. Such bonds may 
also be subject to the risk that rental 
obligations may terminate in the event of 
destruction or damage of the equipment or 
buildings.

Tax Allocation Bonds 
 Bonds described as "tax allocation" securities 
are payable from and secured by incremental 
(increased) tax revenues collected on property 
within the areas where redevelopment projects, 
financed by bond proceeds, are located ("project 
areas"). Payments on these bonds are expected to 
be made from projected increases in tax revenues 
derived from higher assessed value of property 
resulting from development in the particular 
project area and not from an increase in the tax 
rates. Among the factors which could result in a 
reduction of the allocated tax revenues which 
secure a tax allocation Bond are: (i) reduction 
of, or a less than anticipated increase in, 
taxable values of property in the project area, 
caused either by economic factors beyond the 
issuer's control (such as a relocation out of 
the project area by one or more major property 
owners) or by destruction of property due to 
natural or other disasters; (ii) successful 
appeals by property owners of assessed 
valuations; (iii) substantial delinquencies in 
the payment of property taxes; or (iv) 
imposition of any constitutional or legislative 
property tax rate decrease. Such reduction of 
tax revenues could have an adverse effect on an 
issuer's ability to make timely payments of 
principal and of interest on the Bonds. 

Refunded Bonds 
 Refunded bonds (including bonds escrowed to a 
call date or maturity date) are bonds that 
originally had been issued generally as revenue 
bonds but have been refunded for reasons which 
may include changing the issuer's debt service 
requirements and removing restrictive bond 
covenants. Typically, a refunded bond is no 
longer secured by a pledge of revenues received 
by an issuer but rather by an escrow fund 
consisting of U.S. Government Obligations. In 
such cases the issuer establishes an escrow fund 
which is irrevocable and which cannot be 
depleted by the issuer so long as debt service 
on the refunded bonds is required to be paid. 
Each escrow fund is funded with U.S. Government 
Obligations which are designed to make payments 
on the refunded bonds and which cannot be 
affected by a default of the issuer. An escrow 
agent pays principal, redemption premium, if 
any, and interest on the refunded bond from the 
principal of and interest on the U.S. Government 
Obligations in the escrow fund. The Trust, as 
holder of the refunded bonds, is entitled to 
receive such payment of principal, redemption 
premium, if any, and interest on the refunded 
bonds as it is paid by the escrow agents out of 
the respective refunded bond escrow funds. 
Investors should note that there have, however, 
been a few bonds thought to be escrowed to 
maturity that were, in fact, called for 
redemption prior to maturity.

Crossover Refunding Bonds 
 Certain Bonds in the Trust may be cross-over 
refunding Bonds. Prior to a specified date, (the 
"Crossover Date"), such bonds are payable solely 
from an escrow fund invested in specified 
securities. After the Crossover Date the Bonds 
are payable from a designated source of 
revenues. Such bonds are categorized in Part A 
as payable from such source of revenues.

Bonds Backed by Letters of Credit 
 The Trust may contain securities that are 
secured by letters of credit issued by 
commercial or savings banks which may be drawn 
upon (i) if an issuer fails to make payments of 
principal of, premium, if any, or interest on a 
Bond backed by such a letter of credit or (ii) 
in the event interest on a Bond is deemed to be 
taxable and full payment of principal and any 
premium due is not made by the issuer. The 
letters of credit are irrevocable obligations of 
the issuing banks. Banks are subject to 
extensive governmental regulations. The 
profitability of the banking industry is largely 
dependent upon the availability and cost of 
capital funds for the purpose of financing 
lending operations under prevailing money market 
conditions. Also, general economic conditions 
play an important part in the operations of the 
banking industry and exposure to credit losses 
arising from possible financial difficulties of 
borrowers or other issuers having letters of 
credit might affect a bank's ability to meet its 
obligations under a letter of credit.

Insurance on the Bonds in the Portfolio
Certain of the Bonds in the Trust may have 
been insured to maturity by the insurance 
company listed in the table below as to payment 
of principal and interest by the issuer at the 
time of issuance, or by a third party purchaser 
of Bonds subsequent to the issuance of such 
bonds. In an Insured Series, in addition to 
purchasing Bonds insured at the time of their 
issuance, the Sponsor may have purchased bonds 
which, prior to the Initial Date of Deposit, 
were not so insured at the time of issuance. The 
Sponsor has obtained an insurance policy or 
policies (except as otherwise set forth in Part 
A) for such bonds which were not originally 
insured. The policies obtained by the Sponsor 
provide either for insurance as long as the 
Bonds so insured remain outstanding ("Insurance 
to Maturity") or which continue in force only so 
long as the Bonds so insured remain in the 
Insured Trust ("Portfolio Insurance"). (See Part 
A, "Essential Information-Insurance"). Portfolio 
Insurance, if any, has been obtained from 
Financial Guaranty. Any Insured Trust which has 
obtained Portfolio Insurance has additionally 
obtained an irrevocable commitment (the 
"Irrevocable Commitment") of Financial Guaranty 
to provide insurance to maturity ("Permanent 
Insurance") upon the sale of any Bond covered by 
the Portfolio Insurance from such Trust and upon 
payment of a premium (the "Permanent Insurance 
Premium") under certain conditions set forth in 
Part A under the heading "Essential Information 
Regarding the Trust". The value of the Bonds 
covered by the Portfolio Insurance and, 
therefore, the Units may decline in the event of 
declining credit quality. However, because of 
the Irrevocable Commitment to provide Permanent 
Insurance, whenever the value of a Bond which is 
below investment grade and which is covered by 
the Portfolio Insurance and insured to its 
maturity (less the Permanent Insurance Premium) 
exceeds the value of that Bond without such 
insurance, the value of that Bond will be 
higher, insured to maturity value (See 
"Evaluation of the Trust"). The insurance 
policies are non-cancellable and will remain in 
force as long as the Bonds insured by such 
policies remain outstanding. Premiums for 
Insurance to Maturity has been paid either at 
the time of issuance by the Issuer, by third-
party purchasers or by the Sponsor on the 
Initial Date of Deposit (See "Summary of 
Portfolio-Insurance Premiums"). Premiums for 
Portfolio Insurance are an expense of an Insured 
Trust. (See "Expenses of the Trust"). Insurance 
does not guarantee the market value of the Bonds 
or the value of the Units. Although the 
insurance represents an element of market value 
with respect to the Bonds covered by Insurance 
to Maturity, the exact effect, if any, of this 
insurance on the market value cannot be 
predicted. No value is attributed to Portfolio 
Insurance unless the Bond so insured is rated 
below investment grade. See "Essential 
Information Regarding the Trust-Securities in 
the Trust Portfolio" in Part A for information 
on the insurance features of this Trust, if any, 
and a description of the percentages of the 
Bonds covered by each of the insurers.
Payment under all of these insurance policies 
will be made in respect of principal of and 
interest on Bonds which shall be due for payment 
under the provisions of each policy, but shall 
be unpaid. All such policies provide for payment 
of the principal or interest due to a trustee or 
paying agent on the date such payment is due. In 
turn, such trustee or paying agent will make 
payment to the bondholder (in this case, the 
Trustee) upon presentation of satisfactory 
evidence of such Bondholder's right to receive 
such payment. Policies issued by Industrial 
Indemnity Insurance Company prior to December 
17, 1984 permit the Company, at its option, to 
accelerate payments under the insurance 
policies. Most insurance policies, however, do 
not provide for accelerated payments of 
principal or interest nor do they cover 
redemptions resulting from events of taxability.
 The following summary information relating to 
the listed insurance companies has been obtained 
from publicly available information. Certain 
insurance companies have been restructured and 
have been absorbed or merged into others; in 
such cases the names of the original insurance 
company appear in parentheses next to the name 
of the acquiring or surviving insurance company.
              Financial Information
              As of March 31, 1996
             (in millions of dollars)
Name (Including Names of
Policyholders'                          Date         Admitted
Predecessor Companies)                  Established  Assets   Surplus
AMBAC Indemnity Corporation             1970         $2,440   $879
Capital Markets Assurance Corporation   1987         292      196
Financial Guaranty Insurance Company    1984         2,314    1,033
Financial Security Assurance Inc.       1984         1,157    458
  (including Capital Guaranty Insurance
  Company and United States Fidelity 
  and Guaranty Company) 
MBIA Insurance Corporation              1986         3,968    1,317
 (including Bond Investors Guaranty 
  Insurance Company)
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 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 are 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.

Ratings on the Bonds in the Insured Series and 
on Units of the Insured Series
 On the Initial Date of Deposit Standard & 
Poor's Corporation rated each of the Bonds in 
the Portfolio and the Units of each Insured 
Trust "AAA" because the insurers have issued 
insurance policies to insure each of the Bonds. 
The Units of each Insured Trust (with the 
exception of Units of those Insured Trusts 
identified in Part A) continue to be rated 
"AAA". See Part A for the current ratings on the 
Bonds and Units. (See also "Bond Ratings", 
herein). The Bond and Unit ratings should not be 
construed as an approval of the offering of the 
Units by Standard & Poor's Corporation or as a 
guarantee of the market value of the Trust or of 
the Units. Standard & Poor's has been 
compensated by the Sponsor for its services in 
rating Units of the Trust.

Insurance Premiums
 The cost of the Insurance to Maturity has been 
paid either by the issuers at the time of 
issuance, by third-party purchasers or by the 
Sponsor. Portfolio Insurance premiums are a 
Trust expense.

Risk Factors Pertaining to a Single State Trust
 Investment in a Trust which holds securities 
issued only by obligors in a single state, such 
as California, may involve additional risks to 
that of an investment in a Trust with a 
portfolio of securities from several states, due 
to the decreased diversification of political, 
financial, economic and market risks. A brief 
description of the factors which may affect the 
financial condition of the applicable state, 
together with a discussion of certain tax 
considerations relating to such state, appear in 
Part A.

Legislation
 From time to time, proposals are introduced in 
Congress to, among other things, reduce federal 
income tax rates, impose a flat tax, exempt 
investment income from tax or abolish the 
federal income tax and replace it with another 
form of tax. Enactment of any such legislation 
could adversely affect the value of the Units. 
The Sponsor, however, cannot predict what 
legislation, if any, in respect of tax rates may 
be proposed, nor can it predict which proposals, 
if any, might be enacted. Also, certain 
proposals, in the form of state legislative 
proposals or voter initiatives, seeking to limit 
real property taxes have been introduced in 
various states, and an amendment to the 
Constitution of the State of California, 
providing for strict limitations on real 
property taxes, has had a significant impact on 
the taxing powers of local governments and on 
the financial condition of school districts and 
local governments in California. In addition, 
other factors may arise from time to time which 
potentially may impair the ability of issuers to 
make payments due on the Bonds. Under the 
Federal Bankruptcy Code, for example, municipal 
bond issuers, as well as any underlying 
corporate obligors or guarantors, may proceed to 
restructure or otherwise alter the terms of 
their obligations.

 From time to time, Congress considers proposals 
to prospectively and retroactively tax the 
interest on state and local obligations, such as 
the Bonds. The Supreme Court clarified in South 
Carolina v. Baker (decided on April 20, 1988) 
that the U.S. Constitution does not prohibit 
Congress from passing a nondiscriminatory tax on 
interest on state and local obligations. This 
type of legislation, if enacted into law, could 
require investors to pay income tax on interest 
from the Bonds and could adversely affect an 
investment in Units.

Payment of the Bonds and Life of the Trust
 The size and composition of the Portfolio will 
change over time. Most of the Bonds are subject 
to redemption prior to their stated maturity 
dates pursuant to optional refunding or sinking 
fund redemption provisions or otherwise. In 
general, optional refunding redemption 
provisions are more likely to be exercised when 
the value of a Bond is at a premium over par 
than when it is at a discount from par. Some 
Bonds may be subject to sinking fund and 
extraordinary redemption provisions which may 
commence early in the life of the Trust. 
Additionally, the size and composition of the 
Trust will be affected by the level of 
redemptions of Units that may occur from time to 
time. Principally, this will depend upon the 
number of investors seeking to sell or redeem 
their Units and whether or not the Sponsor is 
able to sell the Units acquired by it in the 
secondary market. As a result, Units offered in 
the secondary market may not represent the same 
face amount of Bonds as on the initial date of 
deposit. Factors that the Sponsor will consider 
in determining whether or not to sell Units 
acquired in the secondary market include the 
diversity of the Portfolio, the size of the 
Trust relative to its original size, the ratio 
of Trust expenses to income, the Trust's current 
and long-term returns, the degree to which Units 
may be selling at a premium over par and the 
cost of maintaining a current prospectus for the 
Trust. These factors may also lead the Sponsors 
to seek to terminate the Trust earlier than its 
mandatory termination date.

Ratings
 Each of the Bonds in the Trust was, as of the 
Initial Date of Deposit, rated "A" or higher by 
either Standard & Poor's Corporation or Moody's 
Investors Service, Inc. (see "Schedule of 
Investments") or were Bonds which the Sponsor 
reasonably believed would have obtained such 
minimum rating soon thereafter. Ratings 
indicated on the Schedule of Investments are 
Standard & Poor's Corporation ratings unless no 
rating was given to a Bond by such rating 
service or the rating category assigned by 
Moody's Investors Service, Inc. was higher, in 
which case the Moody's Investors Service, Inc. 
rating was indicated. Certain Bonds may, in 
addition to their rating, be designated either 
"p" by Standard & Poor's Corporation or "Con" by 
Moody's Investors Service, Inc. Such 
designations do not affect the rating assigned 
by the respective rating services to such Bonds 
but provide certain additional information (see 
"Bond Ratings" in Part B and "Schedule of 
Investments" in Part A).

ACQUISITION OF SECURITIES FOR THE TRUST
 In selecting Bonds for deposit in the Trust 
many factors were considered, and based upon the 
experience and judgment of the Sponsor, the 
following requirements, among others, were 
deemed to be of primary importance: 
 1. Minimum Standard & Poor's Corporation's 
rating of "A-" or minimum Moody's Investors 
Service, Inc.'s rating of "A" ("investment 
grade" municipal bonds) or Bonds which the 
Sponsor reasonably believes will obtain such 
minimum ratings in the near future;
 2. Reasonable value relative to other issues of 
similar quality and maturity;
 3. Diversification as to the purpose of each 
issue and the location of each issuer; and 
 4. Income to the Unitholders of the Trust. 
 Cash, if any, received from Unitholders prior 
to the settlement date for the purchase of Units 
or prior to the payment for Bonds upon their 
delivery may be used in the Sponsor's business 
subject to the limitations of 17 C.F.R. Section 
240. 15c3-3 under the Securities and Exchange 
Act of 1934 and may be of benefit to the 
Sponsor.
 The Trustee has not participated in the 
selection of Securities for the Trust, and 
neither the Sponsor nor the Trustee will be 
liable in any way for any default, failure or 
defect in any Securities.
 To the best knowledge of the Sponsor, there was 
no litigation pending as of the Initial Date of 
Deposit in respect of any Securities which might 
reasonably be expected to have a material 
adverse effect upon the Trust. At any time after 
the Initial Date of Deposit, litigation may have 
been initiated on a variety of grounds with 
respect to Securities in the Trust. Such 
litigation may affect the validity of such 
Securities or the tax-exempt status of the 
interest thereon. While the outcome of 
litigation of such nature cannot be predicted, 
opinions of the bond counsel are delivered with 
respect to each Security on the date of issuance 
to the effect that such Security has been 
validly issued and that the interest thereon is 
exempt from Federal income tax. If legal 
proceedings are instituted after the Initial 
Date of Deposit seeking, among other things, to 
restrain or enjoin the payment of any of the 
Bonds or attacking their validity or the 
authorization or existence of the issuer, the 
Sponsor may, in accordance with the Indenture, 
direct the Trustee to sell such Bonds and 
distribute the proceeds of such sale to 
Unitholders. In addition, other factors may 
arise from time to time which potentially may 
impair the ability of issuers to meet 
obligations undertaken with respect to Bonds.

PUBLIC OFFERING PRICE OF UNITS
 The Public Offering Price per Unit during the 
secondary market will be computed by dividing 
the aggregate of the bid prices of the Bonds in 
the Trust plus any money in the Principal 
Account other than money required to redeem the 
tendered Units, by the number of Units 
outstanding, and then adding the appropriate 
sales charge. If the primary offering period, 
the Public Offering Price was determined on the 
basis of the offering prices of bonds plus a 
sales charge ranging from 3.5% to 5.5% of the 
Public Offering Price. 
 The sales charge is determined in accordance 
with the table set forth below based upon the 
number of years remaining to the maturity of 
each Bond. There is no sales charge with respect 
to cash held in the Interest or Principal 
Accounts. For purposes of this calculation, 
Bonds will be deemed to mature on their stated 
maturity dates unless: (a) the Bonds have been 
called for redemption or funds or securities 
have been placed in escrow to redeem them on an 
earlier call date ("Refunded Bonds"), in which 
case such call date shall be deemed to be the 
date upon which they mature; or (b) such Bonds 
are subject to a "mandatory put", in which case 
such mandatory put date shall be deemed to be 
the date upon which they mature. 
 The effect of this method of sales charge 
calculation will be that different sales charge 
rates will be applied to the various Bonds in a 
Trust portfolio based upon the maturities of 
such Bonds, in accordance with the following 
schedule:
                                 Maximum                
                                 Percent of             
Remaining                        Public       Percent of
Years to                         Offering     Net Amount
Maturity                         Price        Invested  
Less than six months             0%           0%        
Six months to less than 1 year   0.50         0.503     
1 year to less than 2 years      1.00         1.010     
2 years to less than 3 years     1.50         1.523     
3 years to less than 4 years     2.25         2.302     
4 years to less than 5 years     2.75         2.828     
5 years to less than 6 years     3.00         3.093     
6 years to less than 7 years     3.25         3.359     
7 years to less than 8 years     3.50         3.627     
8 years to less than 9 years     4.00         4.167     
9 years to less than 12 years    4.25         4.439     
12 years to less than 15 years   4.50         4.712     
15 years or more                 5.50         5.820     

 For example, the sales charge on a Trust 
consisting entirely of Bonds maturing in 12 to 
15 years would be 4.50% (4.712% of the net 
amount invested) and that on a Trust consisting 
entirely of Bonds maturing in four to five years 
would be 2.75% (2.828% of the net amount 
invested). The actual sales charge included in 
the Public Offering Price of any particular 
Trust will depend on the maturities of the Bonds 
in the portfolio of such Trust. 
 Due to the realization of economies of scale in 
sales effort and sales related expenses with 
respect to the purchase of Units by employees of 
the Sponsor, the Sponsor intends to permit 
employees of the Sponsor and certain of their 
relatives to purchase Units of the Trust at a 
price equal to the bid-side evaluation of the 
Securities in the Trust divided by the number of 
Units outstanding plus a reduced sales charge of 
$5.00 per Unit. 
 A proportionate share of accrued interest and 
undistributed interest on the Units to the 
Unitholder's settlement date (the Unitholder's 
settlement date is the date so specified in the 
confirmation of sale of the Units to a 
Unitholder, normally five business days after 
purchase) is added to the Public Offering Price. 
Such proportionate share will be an asset of the 
Unitholder and will be received in subsequent 
distributions and upon the sale of his Units.
 Aggregate bid prices of the Securities will be 
determined for the Trust by the Evaluator on the 
basis of: (1) the current bid prices for the 
Securities; (2) the current bid prices for 
comparable bonds, if bid prices are not 
available for any of the Securities; (3) 
determining the value of the Securities on the 
bid side of the market by appraisal; or (4) any 
combination of the above. Such evaluations and 
computations will be made each business day as 
of the Evaluation Time, effective for all sales 
or redemptions made subsequent to the last 
preceding determination.
 In addition to the sales charges, on the 
Initial Date of Deposit, the Sponsor realized a 
profit or loss resulting from the difference 
between the purchase price paid by the Sponsor 
to buy the Securities and the cost of the 
Securities to the Trust as determined by the 
Evaluator. The Sponsor may realize additional 
profit or loss as a result of the possible 
change in the daily evaluation of the Bonds in 
the Trust. All proceeds received from purchasers 
of Units of the Trust will be retained by the 
Sponsor.

PUBLIC OFFERING OF UNITS
 The Sponsor intends to qualify Units for sale 
in all of the states of the United States, 
except that for state trusts, the Sponsor 
intends to qualify Units for sale only to 
residents of that state. Sales may be made to 
dealers who are members of the National 
Association of Securities Dealers, Inc. at 
prices which include a concession of 75% of the 
applicable sales charge subject to change from 
time to time. The difference between the dealer 
concession and the sales charge will be retained 
by the Sponsor. The Sponsor reserves the right 
to reject, in whole or in part, any order for 
the purchase of Units. 
 Initial Offering of Units. During the initial 
public offering period, Units were offered to 
the public by the Sponsor at the Public Offering 
Price calculated on each business day, plus 
accrued interest.
 Secondary Offering of Units. Upon the 
termination of the initial public offering 
period, unsold Units or Units acquired by the 
Sponsor in the secondary market referred to 
below may be offered to the public by the 
Sponsor by this Prospectus at the then current 
Public Offering Price, calculated daily, plus 
accrued interest.

SECONDARY MARKET FOR UNITS
 While not obligated to do so, it is the 
Sponsor's present intention to maintain, at its 
expense, a secondary market for Units of this 
Series and to offer to repurchase Units from 
Unitholders at the "Sponsor's Repurchase Price". 
The Sponsor's Repurchase Price is computed by 
dividing the value of the Trust by the number of 
Units outstanding (see "Evaluation of the 
Trust"). There is no sales charge incurred when 
a Unitholder sells Units back to the Sponsor. 
Any Units repurchased by the Sponsor at the 
Sponsor's Repurchase Price may be reoffered to 
the public by the Sponsor at the then current 
Public Offering Price, plus accrued interest. 
Any profit or loss resulting from the resale of 
such Units will belong to the Sponsor. 
 If the supply of Units exceeds demand, or for 
some other business reason, the Sponsor may, 
without prior notice, at any time or 
occasionally from time to time discontinue the 
repurchase of Units of this Series at the 
Sponsor's Repurchase Price. In such event, 
although under no obligation to do so, the 
Sponsor may, as a service to Unitholders, offer 
to repurchase Units at the "Redemption Value". 
If the Sponsor repurchases Units in the 
secondary market at the "Redemption Value", it 
may reoffer these Units in the secondary market 
at the "Public Offering Price". In no event will 
the price offered by the Sponsor for the 
repurchase of Units be less than the current 
Redemption Value for those Units. See 
"Redemption of Units by Trustee" and "Comparison 
of Public Offering Price and Redemption Value".

ESTIMATED CURRENT RETURN AND ESTIMATED LONG TERM 
RETURN
 The Sponsor may from time to time give 
investors Estimated Current Return and Estimated 
Long Term Return information, each of which give 
investors different information about the 
return. Estimated Current Return on a Unit 
represents annual cash receipts from coupon-
bearing debt obligations in the Trust (after 
estimated annual expenses) divided by the Public 
Offering Price (including the sales charge). 
 Unlike Estimated Current Return, Estimated Long 
Term Return is a measure of the estimated return 
to the investor earned over the estimated life 
of the Trust. Estimated Long Term Return is 
calculated using a formula which (1) takes into 
consideration, and determines and factors in the 
relative weightings of, the market values, 
yields (which takes into account the 
amortization of premiums and the accretion of 
discounts) and estimated retirements of all of 
the Securities in the Trust and (2) takes into 
account the expenses and maximum sales charge 
associated with each Unit. The Estimated Long 
Term Return calculation does not take into 
account certain delays in distributions of 
income and the timing of other receipts and 
distributions on Units and may, depending on 
maturities, over or understate the impact of 
sales charges. Both of these factors may result 
in a lower figure. 
 Both Estimated Current Return and Estimated 
Long Term Return are subject to fluctuation with 
changes in Trust composition, changes in market 
value of the underlying Securities and changes 
in fees and expenses, including sales charges. 
The size of any difference between Estimated 
Current Return and Estimated Long Term Return 
can also be expected to fluctuate at least as 
frequently. In addition, both return figures may 
not be directly comparable to yield figures used 
to measure other investments, and, since the 
return figures are based on certain assumptions 
and variables, the actual returns received by a 
Unitholder may be higher or lower.

ESTIMATED NET ANNUAL INTEREST INCOME PER UNIT
 The estimated Net Annual Interest Income per 
Unit of the Trust is computed by dividing the 
total gross annual interest income to the Trust 
by the number of Units outstanding and then 
subtracting the per Unit estimated annual fees 
and expenses of the Trustee, the Sponsor and the 
Evaluator (see "Essential Information" in Part 
A). The estimated Net Annual Interest Income per 
Unit will be higher for Unitholders who do not 
elect the monthly plan (where alternate plans of 
distribution are available). This is the result 
of the differing expenses and fees of the 
Trustee in administering the distributions of 
interest. See "Essential Information" in Part A 
and "Distributions to Unitholders". 
 The estimated Net Annual Interest Income per 
Unit will change whenever Securities mature, are 
called for redemption, or are sold. In addition, 
any change in the Trustee's, the Sponsor's 
(where applicable) or Evaluator's fees or 
expenses will result in a change in the 
estimated Net Annual Interest Income per Unit 
(see "Expenses of the Trust").

            DISTRIBUTIONS TO UNITHOLDERS
 The Trustee will collect the interest on the 
Securities as it becomes payable and credit such 
interest to a separate Interest Account created 
by the Indenture. All moneys received by the 
Trustee from sources other than interest will be 
credited to a separate Principal Account. All 
funds collected or received will be held by the 
Trustee in trust without interest to Unitholders 
as part of the Trust or the Reserve Account 
referred to below until required to be disbursed 
in accordance with the provisions of the 
Indenture. Such funds will be segregated by 
separate recordation on the Trust ledger of the 
Trustee so long as such practice preserves a 
valid preference under applicable law, or, if 
such preference is not preserved the Trustee 
shall handle such funds in such other manner as 
shall constitute the segregation and holding 
thereof in trust within the meaning of the 
Investment Company Act of 1940, as the same may 
be from time to time amended. To the extent 
permitted by the Indenture and applicable 
banking regulations, such funds are available 
for use by the Trustee pursuant to normal 
banking procedures.
 The Trustee is authorized by the Indenture to 
withdraw from the Principal and/or Interest 
Accounts such amounts as it deems necessary to 
establish a reserve for any taxes or other 
governmental charges that may be payable out of 
the Trust, which amounts will be deposited in a 
separate Reserve Account. If the Trustee 
determines that the amount in the Reserve 
Account is greater than the amount necessary for 
payment of any taxes or other governmental 
charges, it will promptly deposit the excess in 
the Account from which it was withdrawn.
 The settlement date for the purchase of Units 
must occur on or prior to the Record Date in 
order for a purchaser to receive a distribution 
on the next Distribution Date. If the settlement 
date for the purchase of Units occurs after the 
Record Date, distribution will not occur until 
the second following Distribution Date. 

Interest Account 
 After deduction of the fees and expenses of the 
Trustee, the Sponsor (where applicable and as 
indicated under "Essential Information") and the 
Evaluator, the Trustee will distribute on each 
Distribution Date or shortly thereafter, to 
Unitholders of record on the preceding Record 
Date, an amount approximately equal to either 
one-twelfth, one-quarter or one-half of such 
Unitholder's pro rata share (depending on the 
distribution plans available and selected) of 
the estimated annual amount to be deposited in 
the Interest Account, computed as of the 
preceding Record Date. However, all Unitholders 
of record on the initial Record Date will 
receive the initial interest distribution on the 
initial Interest Distribution Date. The 
Trustee's fees and expenses will be higher for 
monthly interest distributions than for 
quarterly or semi-annual interest distributions, 
where available. Therefore, the amount 
distributed per Unit to Unitholders electing the 
monthly plan will be correspondingly lower than 
under the quarterly or semi-annual plan. All 
interest distributions following the initial 
interest distribution will be in approximately 
the amounts shown under "Essential Information", 
depending on the plan of distribution selected. 
See "Essential Information--Plan of 
Distribution" in Part A for details on electing 
available distribution plans. 
 Because the Securities in the Trust pay 
interest at varying semi-annual intervals and 
Units pay interest at constant monthly, 
quarterly or semi-annual intervals, the interest 
accrued on Units of the Trust will be greater 
than the amount available for distribution from 
the Interest Account. The Trustee will 
distribute on each Distribution Date an amount 
which will be less than the interest accrued to 
each Unitholder on the preceding Record Date. 
Pursuant to the Indenture, in order to 
accommodate regular interest distributions, the 
Trust will contain undistributed cash balances. 
The difference between the amount accrued to 
each Unitholder on a Record Date and the amount 
distributed on the following Distribution Date 
is an asset of the Unitholder and will be 
included as part of accrued interest which will 
be received in subsequent interest 
distributions, upon the sale of his Units or, in 
part, upon the sale, redemption, or maturity of 
Securities in the Trust. 
 The Trustee is authorized by the Indenture to 
advance such amounts as may be necessary to 
provide interest distributions of approximately 
equal amounts in accordance with the 
distribution plan selected. The Trustee will be 
reimbursed, without interest, for any such 
advances in the manner provided in the 
Indenture. 

Principal Account 
 The Trustee will distribute an amount equal to 
such Unitholder's pro rata share of the cash 
balance, if any, in the Principal Account on the 
principal Distribution Date specified under 
"Distribution" under "Essential Information". 
The pro rata share is computed as of the 
preceding Record Date. Except for moneys used to 
redeem tendered Units, proceeds received upon 
the disposition of any Securities subsequent to 
a Record Date and prior to the following 
principal Distribution Date will be held in the 
Principal Account and will not be distributed 
until the next succeeding principal Distribution 
Date. However, in the event of an early 
redemption of bonds, sale of bonds upon the 
occurrence of events set forth under 
"Supervision of Trust Investments", or maturity 
of bonds, there may occur a special principal 
distribution. Any special principal distribution 
will be made within 60 days of such event to 
Unitholders of record on the Record Date 
selected therefor by the Trustee as provided in 
the Indenture. No distribution need be made from 
the Principal Account if the cash balance 
therein is less than one-tenth of one per cent 
of the total principal amount of the Securities 
on the Initial Date of Deposit. 
 Certain of the Bonds in the Trust are subject 
to sinking fund or special redemption by their 
issuers, as set forth under "Redemption 
Features" on the "Schedule of Investments in 
Part A". The redemption price of Bonds in the 
Trust called by an issuer pursuant to sinking 
fund or special redemption is normally equal to 
the principal amount of such Bonds, while the 
redemption price for Bonds called at the option 
of the issuer may include a redemption premium. 
In most cases Bonds are selected from among 
Bonds of like series and maturity either by lot 
or by such method as the bond trustee may adopt. 
A capital gain or loss may occur depending upon 
the price at which a Bond which is called was 
acquired by the Trust and the amount received by 
the Trust upon redemption (see "Tax Status of 
the Trust"). In general, optional redemption 
provisions are more likely to be exercised by an 
issuer when the offering side valuation is 
greater than par than when the offering side 
valuation is less than par. If future interest 
rates decline, an issuer of Bonds might find it 
advantageous to exercise its option to call 
Bonds prior to maturity even though, in most 
cases, the issuer must pay a premium. 

Reinvestment Program 
 Distributions are made to Unitholders monthly. 
The Unitholder has the option of receiving the 
monthly interest and/or principal distribution 
or reinvesting at net asset value in the 
PaineWebber Tax-Exempt Income Fund (the "Fund"), 
an open-end investment company registered under 
the Investment Company Act. The Fund's 
investment objective is to provide high current 
income exempt from Federal income tax, 
consistent with the preservation of capital and 
liquidity within the Fund's quality standards. 
Except under unusual market conditions, the Fund 
will invest at least 80% of its assets in 
municipal obligations with varying maturities, 
the interest from which, in the opinion of bond 
counsel to their respective issuers, is exempt 
from both Federal income tax and the Federal 
alternative minimum tax. There can be no 
assurance that the Fund will achieve its 
objective. For more information about the Fund, 
including a prospectus, Unitholders should 
contact their PaineWebber Investment Executive 
or call the Fund's shareholder service number at 
1-800-544-9300. 
 To participate in the Reinvestment Program, 
Unitholders must hold Units in their own name, 
must fill out an application establishing an 
account and notify the Trustee of the account 
number at least 10 days before the Record Date. 
Elections may be revoked upon similar notice.

EXCHANGE OPTION
 Unitholders may elect to exchange any or all of 
their Units of this series for units of one or 
more of any series of PaineWebber Municipal Bond 
Fund First Series; PaineWebber Municipal Bond 
Fund Second Series; PaineWebber Municipal Bond 
Fund Third Series (the "PaineWebber Series"); 
The Municipal Bond Fund, Series One through 
Series Forty-Three; The Municipal Bond Trust, 
Series Forty-Four and subsequent series (the 
"National Series"); The Municipal Bond Trust, 
Multi-State Program Series One and subsequent 
series (the "Multi-State Series); The Municipal 
Bond Trust, California Series A and subsequent 
series (the "California Series"); The Municipal 
Bond Trust, Insured Series One and subsequent 
series (the "Insured Series"); The Corporate 
Bond Trust, Series One and subsequent series 
(the "Corporate Series"); The PaineWebber 
Pathfinders Trust, Treasury and Growth Stock, 
Series 1 and subsequent series (the "Pathfinders 
Trust"), the PaineWebber Federal Government 
Trust, GNMA Series 1 and subsequent Series 1 
(the "Federal Government Trust") or the 
PaineWebber Equity Trust, Growth Stock Series 1 
and subsequent series (the "Equity Trust") 
(collectively referred to as the "Exchange 
Trusts"), at a Public Offering Price for the 
units of the Exchange Trusts to be acquired 
based on a reduced sales charge of $15 per unit. 
The purpose of such reduced sales charge is to 
permit the Sponsor to pass on to the Unitholder 
who wishes to exchange Units the cost savings 
resulting from such exchange of Units. The cost 
savings result from reductions in time and 
expense related to advice, financial planning 
and operational expense required for the 
Exchange Option. Each Exchange Trust has 
different investment objectives, therefore a 
Unitholder should read the prospectus for the 
applicable Exchange Trust carefully prior to 
executing this option. Exchange Trusts having as 
their objective the receipt of tax exempt 
interest income would not be suitable for tax 
deferred investment plans such as Individual 
Retirement Accounts. A Unitholder who purchased 
Units of a series and paid a per unit sales 
charge that was less than the per Unit sales 
charge of the series of Exchange Trusts for 
which such Unitholder desires to exchange into, 
will be allowed to exercise the Exchange Option 
at the Unit Offering Price plus the reduced 
sales charge, provided the Unitholder has held 
the Units for at least five months. Any such 
Unitholder who has not held the Units to be 
exchanged for the five-month period will be 
required to exchange them at the Unit Offering 
Price plus a sales charge based on the greater 
of the reduced sales charge, or an amount which, 
together with the initial sales charge paid in 
connection with the acquisition of the Units 
being exchanged, equals the sales charge of the 
series of the Exchange Trust for which such 
Unitholder desires to exchange into, determined 
as of the date of the exchange. 
 The Sponsor will permit exchanges at the 
reduced sales charge provided there is a 
secondary market maintained by the Sponsor in 
both the Units of this series and units of the 
applicable Exchange Trust and there are units of 
the applicable Exchange Trust available for 
sale. While the Sponsor has indicated that it 
intends to maintain a market for the units of 
the respective Trusts, there is no obligation on 
its part to maintain such a market. Therefore, 
there is no assurance that a market for units 
will in fact exist on any given date at which a 
Unitholder wishes to sell his Units of this 
series and thus there is no assurance that the 
Exchange Option will be available to a 
Unitholder. Exchanges will be effected in whole 
units only. Any excess proceeds from 
Unitholders' units being surrendered will be 
returned. Unitholders will be permitted to 
advance new money in order to complete an 
exchange. 
 An exchange of units pursuant to the Exchange 
Option will normally constitute a "taxable 
event" under the Code, i.e., a Unitholder will 
recognize a tax gain or loss which will be of a 
capital or ordinary nature depending upon among 
other things the length of time such Unitholder 
has held the Units. However, Unitholders are 
advised to consult their own tax advisors as to 
the tax consequences of exchanging units in 
their particular case. 
 The Sponsor reserves the right to modify, 
suspend or terminate this plan at any time 
without further notice to Unitholders. In the 
event the Exchange Option is not available to a 
Unitholder at the time he wishes to exercise it, 
the Unitholder will be immediately notified and 
no action will be taken with respect to his 
Units without further instruction from the 
Unitholder.
 To exercise the Exchange Option, a Unitholder 
should notify the Sponsor of his desire to 
exercise the Exchange Option and to use the 
proceeds from the sale of his Units of this 
series to purchase units of one or more of the 
Exchange Trusts. If units of the applicable 
outstanding series of the Exchange Trust are at 
that time available for sale, and if such units 
may lawfully be sold in the state in which the 
Unitholder is resident, the Unitholder may 
select the series or group of series for which 
he desires his investment to be exchanged. The 
Unitholder will be provided with a current 
prospectus or prospectuses relating to each 
series in which he indicates interest. 
 The exchange transaction will operate in a 
manner essentially identical to any secondary 
market transaction, i.e., Units will be 
repurchased at a price based on the aggregate 
bid price per Unit of the securities in the 
portfolio of the Trust. Units of the Exchange 
Trust, however, will be sold to the Unitholder 
at a reduced sales charge. Units sold under the 
Exchange Option will be sold at the bid prices 
per unit of the underlying securities in the 
particular portfolio involved plus a fixed 
charge of $15 per unit. Exchange transactions 
will be effected only in whole units; thus, any 
proceeds not used to acquire whole units will be 
paid to the selling Unitholder.
 For example, assume that a Unitholder, who has 
three units of a trust with a current price of 
$1,030 per unit based on the bid prices of the 
underlying securities, desires to sell his units 
and seeks to exchange the proceeds for units of 
a series of an Exchange Trust with a current 
price of $890 per unit based on the bid prices 
of the underlying securities. In this example, 
which does not contemplate rounding up to the 
next highest number of units, the proceeds from 
the Unitholder's units will aggregate $3,090. 
Since only whole units of an Exchange Trust may 
be purchased under the Exchange Option, the 
Unitholder would be able to acquire three units 
in the Exchange Trust for a total cost of $2,715 
($2,670 for the units and $45 for the sales 
charge). The remaining $375 would be returned to 
the Unitholder in cash.

               CONVERSION OPTION
 Owners of units of any registered unit 
investment trust sponsored by others which was 
initially offered at a maximum applicable sales 
charge of at least 3.0% ( a `Conversion Trust') 
may elect to apply the cash proceeds of the sale 
or redemption of those units directly to acquire 
available units of any Exchange Trust at a 
reduced sales charge of $15 per Unit, per 100 
Units in the case of Exchange Trusts having a 
Unit price of approximately $10, or per 1,000 
Units in the case of Exchange Trusts having a 
Unit price of approximately $1, subject to the 
terms and conditions applicable to the Exchange 
Option (except that no secondary market is 
required for Conversion Trust units). To 
exercise this option, the owner should notify 
his retail broker. He will be given a prospectus 
for each series in which he indicates interest 
and for which units are available. The dealer 
must sell or redeem the units of the Conversion 
Trust. Any dealer other than PaineWebber must 
certify that the purchase of units of the 
Exchange Trust is being made pursuant to and is 
eligible for the Conversion Option. The dealer 
will be entitled to two-thirds of the applicable 
reduced sales charge. The Sponsor reserves the 
right to modify, suspend or terminate the 
Conversion Option at any time without further 
notice, including the right to increase the 
reduced sales charge applicable to this option 
(but not in excess of $5 more per Unit, per 100 
Units or per 1,000 Units, as applicable than the 
corresponding fee then being charged for the 
Exchange Option). For a description of the tax 
consequences of a conversion reference is made 
to the Exchange Option section herein.

EXPENSES OF THE TRUST
 The cost of the preparation and printing of the 
Certificates, the Indenture and this Prospectus, 
the initial fees of the Trustee and the 
Trustee's counsel, the Evaluator's fees during 
the initial offering period, advertising 
expenses and expenses incurred in establishing 
the Trust, including legal and auditing fees, 
are paid by the Sponsor and not by the Trust. 
The Sponsor will receive no fee from the Trust 
for its services as Sponsor. 
 The Sponsor's fee, deducted only in trusts 
where the Initial Date of Deposit is on or after 
November 30, 1982, which is earned for portfolio 
supervisory services, is based upon the 
aggregate face amount of Bonds in the Trust at 
the beginning of each annual period. The 
Sponsor's fee, which is not to exceed the amount 
set forth under "Essential Information" in Part 
A, may exceed the actual costs of providing 
portfolio supervisory services for this Trust, 
but at no time will the total amount the Sponsor 
receives for portfolio supervisory services 
rendered to all series of the Municipal Bond 
Trust in any calendar year exceed the aggregate 
cost to it of supplying such services in such 
year. 
 For services performed under the Indenture, the 
Trustee will be paid by the Trust at the rate 
per $1,000 of principal amount of Securities in 
the Trust set forth under "Essential 
Information" in Part A. Such compensation will 
be computed monthly, quarterly or semi-annually 
(depending on available plans of distribution) 
on the basis of the greatest principal amount of 
the Securities in the Trust at any time during 
the preceding monthly or semi-annual period. 
 In no event will the Trustee be paid less than 
$2,000 in any one year. The Evaluator's fee for 
each daily evaluation is set forth under 
"Essential Information" in Part A. The fees of 
the Evaluator will be payable by the Trust. See 
"Essential Information" in Part A for the 
estimated annual fees and expenses per Unit 
under the various optional interest distribution 
plans. 
 The Sponsor's fee is payable annually, 
Trustee's fees are payable monthly, quarterly 
and semi-annually (depending on available plans 
of distribution) and the Evaluator's fees are 
payable monthly on or before each Distribution 
Date from the Interest Account, to the extent 
funds are available, then from the Principal 
Account. Any of such fees may be increased 
without approval of the Unitholders by an amount 
not exceeding a proportionate increase in the 
category entitled "All Services Less Rent" in 
the Consumer Price Index published by the United 
States Department of Labor. 
 In addition to the above, the following charges 
are or may be incurred by the Trust and paid 
from the Interest Account, or, to the extent 
funds are not available in such Account, from 
the Principal Account: (1) fees for the Trustee 
for extraordinary services; (2) expenses of the 
Trustee (including legal and auditing expenses) 
and of counsel; (3) various governmental 
charges; (4) expenses and costs of any action 
taken by the Trustee to protect the Trust and 
the rights and interests of the Unitholders; (5) 
indemnification of the Trustee for any loss, 
liabilities or expenses incurred by it in the 
administration of the Trust without negligence, 
bad faith or willful misconduct on its part; and 
(6) expenses incurred in contacting Unitholders 
upon termination of the Trust. The fees and 
expenses set forth above are payable out of the 
Trust and when unpaid will be secured by a lien 
on the Trust. 
 The accounts of certain Trusts may be audited 
not less than annually by independent public 
accountants selected by the Sponsor. The 
expenses of the audit shall be an expense of the 
Trust. So long as the Sponsor maintains a 
secondary market, Sponsor will bear any audit 
expense which exceeds 50 cents per Unit. 
Unitholders covered by the audit (if any) during 
the year may receive a copy of the audited 
financials upon request.

DESCRIPTION OF CERTIFICATES
 Ownership of Units is evidenced by registered 
Certificates, executed by the Trustee and the 
Sponsor, issued in denominations of one Unit or 
any integral multiple thereof. A Unitholder may 
transfer its Certificate by presenting it to the 
Trustee at its corporate trust office. Such 
Certificate must be properly endorsed or 
accompanied by a written instrument or 
instruments of transfer executed by the 
Unitholder or its duly authorized attorney. A 
Unitholder may be required to pay $2.00 per 
Certificate transferred to cover the Trustee's 
costs in implementing such transfer and to pay 
any tax or other governmental charge that may be 
imposed in connection with any such transfer. 
The Trustee is required to execute and deliver a 
new Certificate in exchange and substitution for 
any Certificate mutilated, destroyed, stolen or 
lost, if and when the Unitholder furnishes the 
Trustee with proper identification and 
satisfactory indemnity, and pays such expenses 
as the Trustee may reasonably incur. Any 
mutilated Certificate must be presented to the 
Trustee before any substitute Certificate will 
be issued.

STATEMENTS TO UNITHOLDERS
 With each distribution from the Interest and 
Principal Accounts, the Trustee will furnish 
each Unitholder with a statement setting forth 
the amount being distributed from each Account 
expressed as a dollar amount per Unit. 
 Promptly after the end of each calendar year, 
the Trustee will furnish to each person who at 
any time during the calendar year was a 
registered Unitholder a statement setting forth: 
 1. As to the Interest Account: 
 (a) the amount of interest received on the 
Securities and the percentage of such amount by 
states and territories in which the issuers of 
the Bonds are located; 
 (b) the amount paid from the Interest Account 
representing accrued interest for any 
Certificates redeemed; 
 (c) the deductions from the Interest Account 
for fees and expenses of the Trustee, the 
Sponsor and the Evaluator or for other various 
fees, charges or expenses relating to the Trust; 
 (d) the deductions from the Interest Account 
for payment into the Reserve Account; and 
 (e) the net amount remaining after such 
payments and deductions expressed as a total 
dollar amount outstanding on the last business 
day of such calendar year. 
 2. As to the Principal Account: 
 (a) the dates of the redemption, sale or 
maturity of any of the Securities and the net 
proceeds received therefrom, excluding any 
portion credited to the Interest Account; 
 (b) the amount paid from the Principal Account 
representing the principal of any Certificates 
redeemed; 
 (c) the deductions from the Principal Account 
for fees and expenses of the Trustee, the 
Sponsor and the Evaluator or for other various 
fees, charges or expenses relating to the Trust; 
 (d) the deductions from the Principal Account 
for payment into the Reserve Account; and 
 (e) the net amount remaining after such 
payments and deductions expressed as a total 
dollar amount outstanding on the last business 
day of such calendar year. 
 3. The following information: 
 (a) a list of the Securities as of the last 
business day of such calendar year; 
 (b) the number of Units outstanding on the last 
business day of such calendar year; 
 (c) the Unit Value based on the last evaluation 
of the Trust made on the last business day 
during such calendar year; and 
 (d) the amounts actually distributed during 
such calendar year from the Interest and 
Principal Accounts, separately stated, expressed 
both as total dollar amounts and as dollar 
amounts per Unit outstanding on the Record Dates 
for such distributions.

            REDEMPTION OF UNITS BY TRUSTEE
 A Unitholder who wishes to dispose of its Units 
should inquire through its broker as to the 
current market price for such Units prior to 
making a tender for redemption to the Trustee in 
order to determine if there is a market for 
Units in excess of the then current Redemption 
Value or Sponsor's Repurchase Price. After the 
initial offering period the Redemption Value 
will be the same as the Sponsor's Repurchase 
Price. 
 During the period in which the Sponsor 
maintains a secondary market for Units at the 
Sponsor's Repurchase Price, the Sponsor has 
agreed to repurchase any Unit presented for 
tender to the Trustee for redemption no later 
than the close of business on the second 
business day following such presentation. 
 The Trustee is irrevocably authorized in its 
discretion, in lieu of redeeming Units presented 
for tender at the redemption value, to sell such 
Units in the over-the-counter market for the 
account of a tendering Unitholder at prices 
which will return to the Unitholder amounts in 
cash, net after brokerage commissions, transfer 
taxes and other charges, equal to or in excess 
of the Redemption Value for such Units. In the 
event of any such sale the Trustee will pay the 
net proceeds thereof to the Unitholder on the 
day he would otherwise be entitled to receive 
payment of the Redemption Value.
 One or more Units represented by a Certificate 
may be redeemed at the Redemption Value upon 
tender of such Certificate to the Trustee at its 
corporate trust office, properly endorsed or 
accompanied by a written instrument of transfer 
in form satisfactory to the Trustee, and 
executed by the Unitholder or its authorized 
attorney. A Unitholder may tender its Units for 
redemption at any time after the settlement date 
for purchase, whether or not it has received a 
definitive Certificate. The Redemption Value per 
Unit is calculated by dividing the current bid 
prices for the Securities in the Trust (see 
"Evaluation of the Trust") plus any money in the 
Principal Account other than money required to 
redeem tendered Units, by the number of Units 
outstanding, plus a proportionate share of 
accrued interest and undistributed interest 
income on the Securities determined to the day 
of tender. There is no sales charge incurred 
when a Unitholder tenders his Units to the 
Trustee for redemption. Subject to the payment 
of any applicable tax or governmental charges, 
the Redemption Value of Units redeemed by the 
Trustee will be paid on the seventh calendar day 
following the day of tender. If such day of 
payment is not a business day, the Redemption 
Value will be paid on the first business day 
prior thereto. 
 The Trustee may, in its discretion, and will 
when so directed by the Sponsor, suspend the 
right of redemption, or postpone the date of 
payment of the Redemption Value, for more than 
seven calendar days following the day of tender 
for any period during which the New York Stock 
Exchange, Inc. is closed other than for weekend 
and holiday closings; or for any period during 
which the Securities and Exchange Commission 
determines that trading on the New York Stock 
Exchange, Inc. is restricted or for any period 
during which an emergency exists as a result of 
which disposal or evaluation of the Securities 
is not reasonably practicable; or for such other 
period as the Securities and Exchange Commission 
may by order permit for the protection of 
Unitholders. The Trustee is not liable to any 
person or in any way for any loss or damages 
which may result from any such suspension or 
postponement.
 Any amounts paid on redemption representing 
interest will be withdrawn from the Interest 
Account to the extent that funds are available 
for such purpose. All other amounts paid on 
redemption will be withdrawn from the Principal 
Account. The Trustee is empowered to sell 
Securities out of the Trust as selected by the 
Sponsor in order to make funds available for the 
redemption of Certificates, and, to the extent 
Securities are sold for such purpose, the size 
and diversity of the Trust will be reduced. Such 
sales may be required at a time when Securities 
would not otherwise be sold and may result in 
lower prices than might otherwise be realized. 
In addition, because of the minimum principal 
amount in which Securities may be required to be 
sold, the proceeds of such sales may exceed the 
amount necessary for payment of Units redeemed. 
Such excess proceeds will be distributed pro 
rata to all remaining Unitholders of record.

              EVALUATION OF THE TRUST
 The Evaluator is Kenny Information Systems, a 
division of J.J. Kenny Co., Inc., 65 Broadway, 
New York, New York 10006. 
 The value of the Trust is computed as of the 
Evaluation Time shown under "Essential 
Information" in Part A (1) on each June 30 and 
December 31 (or the last business day prior 
thereto), (2) on each business day as long as 
the Sponsor is maintaining a bid in the 
secondary market, (3) on the day on which any 
Unit is tendered for redemption and (4) on any 
other day desired by the Sponsor or the Trustee, 
by adding:
 1. The aggregate value of Securities in the 
Trust, as determined by the Evaluator: 
 (a) on the basis of current bid prices for the 
Securities, 
 (b) on the basis of current bid prices for 
comparable bonds, if bid prices are not 
available for any of the Securities, 
 (c) by determining the value of the Securities 
on the bid side of the market by appraisal, or 
 (d) by any combination of the above; 
 2. Money on hand in the Trust, other than money 
deposited to purchase Securities or money 
credited to the Principal Account which is 
required to redeem tendered Units; and 
 3. Accrued but unpaid interest on the 
Securities at the close of business on the date 
of such Evaluation. 
 The Trustee will deduct from the resulting 
figure: amounts representing any applicable 
taxes or governmental charges payable by the 
Trust for the purpose of making an addition to 
the Reserve Account; amounts representing 
estimated accrued expenses of the Trust; amounts 
representing unpaid fees of the Trustee, the 
Sponsor and the Evaluator; and cash held for 
distribution to Unitholders of record as of the 
business day prior to the Evaluation being made 
on the days or dates set forth above. 
 For the purpose of the redemption of Units, the 
value per Unit is computed by the Trustee by 
dividing the result of the above computation by 
the total number of Units outstanding on the 
date of such Evaluation.

COMPARISON OF PUBLIC OFFERING PRICE AND REDEMPTION VALUE
 While the Public Offering Price of Units during 
the initial offering period is determined on the 
basis of the current offering prices of the 
Securities, the Public Offering Price of Units 
in the secondary market and the Redemption Value 
is determined on the basis of the current bid 
prices of such Securities. On the date of the 
"Essential Information" page, the Public 
Offering Price per Unit (which figure includes 
the sales charge) exceeded the Redemption Value 
by the amount shown under "Essential 
Information" in Part A. The difference between 
the bid and offering prices of the Securities is 
expected to average 1-1/2% to 2% of principal 
amount. This difference may vary between 3% or 
more of principal amount for inactively traded 
Securities and as little as 1/2 of 1% for 
actively traded Securities. For this reason and 
others, including the fact that the Public 
Offering Price includes the sales charge, the 
amount realized by a Unitholder upon redemption 
of Units may be less than the price paid by the 
Unitholder for such Units.

           SUPERVISION OF TRUST INVESTMENTS
 The acquisition by the Trust of any securities 
other than the Securities initially deposited is 
prohibited by the Indenture. The Sponsor may 
direct the Trustee to sell or liquidate any of 
the Securities upon the happening of any of the 
following events (except for the limited right 
to replace securities in the case of a fail):
 1. Default by an issuer in the payment of 
principal of or interest on such Securities, or 
any other outstanding obligations of such 
issuer, when due and payable, 
 2. Institution of legal proceedings seeking to 
restrain or enjoin the payment of any of the 
Securities or attacking their validity,
 3. A breach of a covenant or warranty which 
could adversely affect the payment of debt 
service on the Securities,  4. In the case of 
revenue bonds, if the revenues, based upon 
official reports, fall substantially below the 
estimated revenues calculated to be necessary to 
pay principal of and interest on the Bonds,
 5. A decline in market price, or such other 
market or credit factor, as in the opinion of 
the Sponsor would make retention of any of the 
Securities detrimental to the Unitholders, or 
 6. In the event that any of the Bonds are the 
subject of an advance refunding.
 In addition, if a default in the payment of 
principal of or interest on any of the 
Securities occurs and the Sponsor fails to 
instruct the Trustee to sell or hold such 
Securities within thirty days after notification 
by the Trustee to the Sponsor of such default, 
the Indenture provides that the Trustee will 
sell the defaulted Securities promptly. The 
Trustee will not be liable or responsible in any 
way for depreciation or loss incurred by reason 
of any sale made by it either pursuant to a 
direction of the Sponsor or by reason of a 
failure of the Sponsor to give any such 
direction. 
 The Sponsor is required to instruct the Trustee 
to reject any offer made by an issuer of any of 
the Bonds to issue new obligations in exchange 
and substitution for any of the Bonds pursuant 
to a refunding or refinancing plan; however, the 
Sponsor may instruct the Trustee to accept or 
reject such an offer or to take any other action 
with respect thereto as the Sponsor deems proper 
if the issuer is in default with respect to the 
Securities or the issuer will, in the written 
opinion of the Sponsor, probably default with 
respect to the Bonds in the reasonably 
foreseeable future. 
 Any obligations received by the Trust in the 
event of such an exchange or substitution will 
be held by the Trustee and will be subject to 
the terms and conditions of the Indenture to the 
same extent as the Securities originally 
deposited. Within five days after any exchange 
and deposit, notice of such will be mailed by 
the Trustee to each registered Unitholder, which 
identifies the Securities eliminated and the 
Securities substituted.

             ADMINISTRATION OF THE TRUST
 Records and Accounts: Pursuant to the 
Indenture, the Trustee is required to keep 
proper books of record and account of all 
transactions relating to the Trust at its 
office. Such records will include the name and 
address of every Unitholder, a list of the 
Certificate numbers and the number of Units of 
each Certificate issued to Unitholders. The 
Trustee is also required to keep a certified 
copy or duplicate original of the Indenture and 
a current list of Securities held in the Trust 
on file at its office which will be open to 
inspection by any Unitholder during usual 
business hours.
 The Trustee is required to make annual or other 
reports as may from time to time be required 
under any applicable state or Federal statute, 
rule or regulation. 
 Successor Trustee: Under the Indenture, the 
Trustee may resign and be discharged of the 
Trust created by the Indenture by executing a 
notice of resignation in writing and filing it 
with the Sponsor. The resigning Trustee must 
also mail a copy of the notice of resignation to 
all Unitholders then of record, not less than 
sixty days before the effective resignation date 
specified in such notice. Such resignation will 
become effective only upon the appointment of 
and the acceptance of the Trust by a successor 
Trustee. The Sponsor, upon receiving notice of 
such resignation, is obligated to appoint a 
successor Trustee promptly. 
 If within thirty days after notice of 
resignation has been received by the Sponsor, no 
successor Trustee has been appointed or, if 
appointed, has not accepted the appointment, the 
resigning Trustee may apply to a court of 
competent jurisdiction for the appointment of a 
successor. In case the Trustee becomes incapable 
of acting as such or is adjudged a bankrupt or 
is taken over by any public authority, the 
Sponsor may discharge the Trustee and appoint a 
successor Trustee as provided in the Indenture. 
Notice of such discharge and appointment shall 
be mailed to each Unitholder by the Sponsor. 
 Upon a successor Trustee's execution of a 
written acceptance of an appointment as Trustee 
for the Trust, such successor Trustee will 
become vested with all the rights, powers, 
duties and obligations of the original Trustee. 
 A successor Trustee is required to be a 
corporation organized and doing business under 
the laws of the United States or of the State of 
New York; to be authorized under such laws to 
exercise corporate trust powers; to have at all 
times an aggregate capital, surplus and 
undivided profit of not less than $5,000,000; 
and to have its principal office in New York 
City. 
 Successor Sponsor: If at any time the Sponsor 
shall fail to undertake or perform or become 
incapable of undertaking or performing any of 
the duties which by the terms of the Indenture 
are required of it to be undertaken or 
performed, or if the Sponsor resigns, the 
Trustee may either appoint a successor Sponsor 
or Sponsors as will be satisfactory to the 
Trustee or it may terminate the Indenture and 
liquidate the Trust. Any successor Sponsor may 
be compensated at rates deemed by the Trustee to 
be reasonable. 
 The dissolution of the Sponsor or its ceasing 
to exist as a legal entity from, or for, any 
cause whatsoever will not cause the termination 
of the Indenture or the Trust unless the Trustee 
deems termination to be in the best interests of 
Unitholders. 
 Successor Evaluator: The Evaluator may resign 
or may be removed by the Sponsor or the Trustee, 
and the Sponsor and the Trustee are to use their 
best efforts to appoint a satisfactory 
successor. Such resignation or removal will 
become effective upon the acceptance of 
appointment by a successor Evaluator. If upon 
resignation of the Evaluator no successor has 
accepted appointment within thirty days after 
notice of resignation, the Evaluator may apply 
to a court of competent jurisdiction for the 
appointment of a successor Evaluator. Notice of 
such resignation or removal and appointment will 
be mailed by the Trustee to each Unitholder.

LIMITATION OF LIABILITIES
 The Sponsor: The Indenture provides that the 
Sponsor will not be liable to the Trustee, the 
Trust or the Unitholders for taking any action 
or for refraining from taking any action made in 
good faith or for errors in judgment, but will 
be liable only for its own willful misfeasance, 
bad faith, gross negligence or willful disregard 
of its duties. The Sponsor will not be liable or 
responsible in any way for depreciation or loss 
incurred by reason of the sale of any Securities 
in the Trust. 
 The Trustee: The Indenture provides that the 
Trustee will not be liable for any action taken 
in good faith in reliance on properly executed 
documents or for the disposition of moneys, 
Securities or Certificates, except by reason of 
its own gross negligence, bad faith or willful 
misconduct, nor will the Trustee be liable or 
responsible in any way for depreciation or loss 
incurred by reason of the sale by the Trustee of 
any Securities in the Trust. In the event of the 
failure of the Sponsor to act, the Trustee may 
act and will not be liable for any such action 
taken by it in good faith. The Trustee will not 
be personally liable for any taxes or other 
governmental charges imposed upon or in respect 
of the Securities or upon the interest thereon 
or upon it as Trustee or upon or in respect of 
the Trust which the Trustee may be required to 
pay under any present or future law of the 
United States of America or of any other taxing 
authority having jurisdiction. In addition, the 
Indenture contains other customary provisions 
limiting the liability of the Trustee. The 
Trustee will be indemnified and held harmless 
against any loss or liability accruing to it 
without negligence, bad faith or willful 
misconduct on its part, arising out of or in 
connection with its acceptance or administration 
of the Trust, including the costs and expenses 
(including counsel fees) of defending itself 
against any claim of liability.
 The Evaluator: The Trustee, Sponsor, and 
Unitholders may rely on any evaluation furnished 
by the Evaluator and will have no responsibility 
for the accuracy thereof. The Indenture provides 
that the determinations made by the Evaluator 
will be made in good faith upon the basis of the 
best information available to it; provided, 
however, that the Evaluator will be under no 
liability to the Trustee, Sponsor or Unitholders 
for errors in judgment, but will be liable only 
for its gross negligence, lack of good faith or 
willful misconduct.

             AMENDMENT OF THE INDENTURE
 The Indenture may be amended by the Trustee and 
the Sponsor without the consent of any of the 
Unitholders to cure any ambiguity or to correct 
or supplement any provision thereof which may be 
defective or inconsistent or to make such other 
provisions as will not adversely affect the 
interest of the Unitholders; provided, however, 
that after the deposit of the Securities the 
Indenture may not be amended to increase the 
number of Units issued thereunder or to permit 
the deposit or acquisition of securities either 
in addition to or in substitution for any of the 
Securities initially deposited in the Trust, 
except for the substitution of certain refunding 
securities for the Securities. The Trustee will 
promptly notify Unitholders of the substance of 
any such amendment.

              RIGHTS OF UNITHOLDERS
 A Unitholder may at any time tender his 
Certificate to the Trustee for redemption. 
 The death or incapacity of any Unitholder will 
not operate to terminate the Trust nor entitle 
his legal representatives or heirs to claim an 
accounting or to take any action or proceeding 
in any court for a partition or winding up of 
the Trust. 
 No Unitholder will have the right to vote 
concerning the Trust, except with respect to 
termination, or in any manner control the 
operation and management of the Trust, nor shall 
any Unitholder ever be liable to any other 
person by reason of any action taken by the 
Sponsor or the Trustee.

             TERMINATION OF THE TRUST
 The Indenture provides that the Trust will 
terminate upon the maturity, redemption, sale or 
other disposition of the last of the Securities 
held in the Trust. If the value of the Trust as 
shown by any evaluation is less than twenty per 
cent (20%) of the par value of the Securities 
originally deposited in the Trust, the Trustee 
may in its discretion, and will when so directed 
by the Sponsor, terminate the Trust. The Trust 
may also be terminated at any time by the 
written consent of 100% of the Unitholders or by 
the Trustee upon the resignation or removal of 
the Sponsor if the Trustee determines 
termination to be in the best interest of the 
Unitholders. In no event will the Trust continue 
beyond the Mandatory Termination Date.
 Upon termination, the Trustee will sell the 
Securities then held in the Trust and credit the 
moneys derived from such sale to the Principal 
Account and the Interest Account. The Trustee 
will then, after deduction of any fees and 
expenses of the Trust and payment into the 
Reserve Account of any amount required for taxes 
or other governmental charges that may be 
payable by the Trust, distribute to each 
Unitholder, upon surrender for cancellation of 
his Certificate after due notice of such 
termination, such Unitholder's pro rata share in 
the Interest and Principal Accounts. The sale of 
Securities in the Trust upon termination may 
result in a lower amount than might otherwise be 
realized if such sale were not required at such 
time. For this reason, among others, the amount 
realized by a Unitholder upon termination may be 
less than the principal amount of Securities 
represented by the Units held by such 
Unitholder.

                  SPONSOR
 The Sponsor, PaineWebber Incorporated, is a 
corporation organized under the laws of the 
State of Delaware. The Sponsor is a member firm 
of the New York Stock Exchange, Inc. as well as 
other major securities and commodities exchanges 
and is a member of the National Association of 
Securities Dealers, Inc. The Sponsor is engaged 
in a security and commodity brokerage business 
as well as underwriting and distributing new 
issues. The Sponsor also acts as a dealer in 
unlisted securities and municipal bonds and, in 
addition to participating as a member 
of various selling groups or as an agent of 
other investment companies, executes orders on 
behalf of investment companies for the purchase 
and sale of securities of such companies and 
sells securities to such companies in its 
capacity as a broker or dealer in securities.

LEGAL OPINION
 The legality of the Units offered hereby has 
been passed upon by Carter, Ledyard & Milburn, 2 
Wall Street, New York, New York, as counsel for 
the Sponsor.

              INDEPENDENT AUDITORS
 The financial statements, including the 
schedule of investments, of the Trust included 
in Part A of this Prospectus have been audited 
by Ernst & Young LLP, independent auditors, for 
the period indicated in their report appearing 
herein. The financial statements audited by 
Ernst & Young LLP have been included in reliance 
on their report given on their authority as 
experts in accounting and auditing.
                BOND RATINGS*
Standard & Poor's Corporation 
 AAA_Debt rated AAA has the highest rating 
assigned by Standard & Poor's. Capacity to pay 
interest and repay principal is extremely 
strong.
 AA_Debt rated AA has a very strong capacity to 
pay interest and repay principal and differs 
from the highest rated issues only in small 
degree.
 A_Debt rated A has a strong capacity to pay 
interest and repay principal although it is 
somewhat more susceptible to the adverse effects 
of changes in circumstances and economic 
conditions than debt in higher rated categories.
 BBB_Debt rated BBB is regarded as having an 
adequate capacity to pay interest and repay 
principal. Whereas it normally exhibits adequate 
protection parameters, adverse economic 
conditions or changing circumstances are more 
likely to lead to a weakened capacity to pay 
interest and repay principal for debt in this 
category than in higher rated categories.
 BB, B, CCC, CC_Debt rated BB, B, CCC, and CC is 
regarded, on balance, as predominately 
speculative with respect to capacity to pay 
interest and repay principal in accordance with 
the terms of the obligation. BB indicates the 
lowest degree of speculation and CC the highest 
degree of speculation. While such debt will 
likely have some quality and protective 
characteristics, these are outweighed by large 
uncertainties or major risk exposures to adverse 
conditions.
 The ratings from AA to CCC may be modified by 
the addition of a plus or minus sign to show 
relative standing within the major rating 
categories.
 A provisional rating, indicated by "p" 
following a rating, assumes the successful 
completion of the project being financed by the 
issuance of the debt being rated and indicates 
that payment of debt service requirements is 
largely or entirely dependent upon the 
successful and timely completion of the project. 
This rating, however, while addressing credit 
quality subsequent to completion of the project, 
makes no comment on the likelihood of, or the 
risk of default upon failure of, such 
completion.
 NR_Securities which, while not rated by 
Standard & Poor's or Moody's, have been 
determined by the trusts sponsor to be of 
investment grade quality.
_______________
 *As described by the rating agencies.

Moody's Investors Service, Inc. 
 Aaa_Bonds which are rated Aaa are judged to be 
the best quality. They carry the smallest degree 
of investment risk and are generally referred to 
as "gilt edge". Interest payments are protected 
by a large or by an exceptionally stable margin 
and principal is secure. While the various 
protective elements are likely to change, such 
changes as can be visualized are most unlikely 
to impair the fundamentally strong position of 
such issues. 
 Aa_Bonds which are rated Aa are judged to be of 
high quality by all standards. Together with the 
Aaa group they comprise what are generally known 
as high-grade bonds. They are rated lower than 
the best bonds because margins of protection may 
not be as large as in Aaa securities or 
fluctuation of protective elements may be of 
greater amplitude or there may be other elements 
present which make the long-term risks appear 
somewhat larger than in Aaa securities. 
 A_Bonds which are rated A possess many 
favorable investment attributes and are to be 
considered as upper medium grade obligations. 
Factors giving security to principal and 
interest are considered adequate, but elements 
may be present which suggest a susceptibility to 
impairment sometime in the future.
 Baa_Bonds which are rated Baa are considered as 
medium grade obligations; i.e., they are neither 
highly protected nor poorly secured. Interest 
payments and principal security appear adequate 
for the present but certain protective elements 
may be lacking or may be characteristically 
unreliable over any great length of time. Such 
bonds lack outstanding investment 
characteristics and in fact have speculative 
characteristics as well.
 Ba_Bonds which are rated Ba are judged to have 
speculative elements; their future cannot be 
considered as well assured. Often the protection 
of interest and principal payments may be very 
moderate and thereby not well safeguarded during 
both good and bad times over the future. 
Uncertainty of position characterizes bonds in 
this class. 
 B_Bonds which are rated B generally lack the 
characteristics of a desirable investment. 
Assurance of interest and principal payments or 
of maintenance of other terms of the contract 
over any long period of time may be small. 
 Caa_Bonds which are rated Caa are in poor 
standing. Such issues may be in default or there 
may be present elements of danger with respect 
to principal or interest. 
 Ca_Bonds which are rated Ca represent 
obligations which are speculative in a high 
degree. Such issues are often in default or have 
other marked shortcomings. 
 C_Bonds which are rated C are the lowest rated 
class of bonds and issues so rated can be 
regarded as having extremely poor prospects of 
ever attaining any real investment standing. 
 Rating symbols may include numerical modifiers 
1, 2 or 3. The numerical modifier 1 indicates 
that the security ranks at the high end, 2 in 
the mid-range, and 3 nearer the low end of the 
generic category. These modifiers of rating 
symbols Aa, A and Baa are to give investors a 
more precise indication of relative debt quality 
in each of the historically defined categories. 
 Conditional ratings, indicated by "Con" are 
given to bonds for which the security depends 
upon the completion of some act or the 
fulfillment of some condition. These are bonds 
secured by (a) earnings of projects under 
construction, (b) earnings of projects 
unseasoned in operating experience, (c) rentals 
which begin when facilities are completed, or 
(d) payments to which some other limiting 
condition attaches. A parenthetical rating 
denotes probable credit stature upon completion 
of construction or elimination of basis of such 
condition. 

                       CONTENTS OF REGISTRATION STATEMENT
          This registration statement comprises the following
  documents:
          The facing sheet.
          The Prospectus.
          The signatures.
          The following exhibits:
          EX-99.C1     Opinion of Counsel as to legality of securities
                       being registered
          EX-99.C2     Opinion of Counsel as to certain tax aspects of
                       of the Trust
          EX-99.C3     Consent of Kenny Information Systems
          EX-27        Financial Data Schedule
          EX-99.C4     Consent of Independent Auditors
                              FINANCIAL STATEMENTS
          1.      Statement of Condition of the Trust as shown in
                  the current Prospectus for this series.
          2.      Financial Statements of the Depositor.
                  PaineWebber Incorporated - Financial Statements
                  incorporated by reference to Form 10-k and
                  Form 10-Q (File No. 1-7367) respectively.
  SIGNATURES
  Pursuant to the requirements of the Securities Act of 1933, the
  registrant, The Municipal Bond Trust, Series 231 certifies that it
  meets all of the requirements for effectiveness of this Registration
  Statement pursuant to Rule 485(b) under the Securities Act of 1933
  and has duly caused this registration statement to be signed on its
  behalf by the undersigned thereunto duly authorized, and its seal to
  be hereunto affixed and attested, all in the City of New York, and the
  State of New York on the 24th day of November, 1997.
                      THE MUNICIPAL BOND TRUST, SERIES 231
                                  (Registrant)
                              By: PaineWebber Incorporated
                                  (Depositor)
                              /s/ ROBERT E. HOLLEY
                                  Robert E. Holley
                                  Senior Vice President
  Pursuant to the requirements of the Securities Act of 1933, this
  Registration Statement has been signed on behalf of PaineWebber
  Incorporated, the Depositor, by the following persons in the
  following capacities and in the City of New York, and State of New
  York, on this 24th day of November, 1997.
  PAINEWEBBER INCORPORATED
       Name                        Office
  Donald B. Marron            Chairman, Chief Executive Officer,
                              Director & Member of the Executive
                              Committee *
  Regina A. Dolan             Senior Vice President, Chief Financial Officer
                              and Director *
  Joseph J. Grano, Jr.        President, Retail Sale & Marketing,
                              Director and Member of the Executive
                              Committee *
                              By:/s/ ROBERT E. HOLLEY
                                    Attorney-in-fact*
  *   Executed copies of the powers of attorney have been filed with the
      Securities and Exchange Commission in connection with the Registration
      Statement for File No. 33-19786.