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SUPPLEMENT DATED JULY 1, 1996
TO PROSPECTUS DATED FEBRUARY 14, 1996
OF
SIERRA PRIME INCOME FUND
The Prospectus, dated February 14, 1996, as supplemented to date, for the Class
A Common Shares of the Sierra Prime Income Fund (the "Trust") is amended and
supplemented as follows:
THE TRUST'S NEW MAILING ADDRESS IS: P.O. BOX 5118, WESTBOROUGH, MASSACHUSETTS
01581-5118.
NO EXCHANGE PRIVILEGES TO SAM PORTFOLIOS
The Sierra Asset Management Portfolios ("SAM Portfolios"), an open-end
management investment company that is expected to begin operations no later than
July 31, 1996, will offer Class A and Class B Shares of its Portfolios that
provide asset allocation strategies to investors. Initially, shareholders of the
Trust will not be permitted to exchange their shares for shares of the SAM
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Portfolios. In the future, such an exchange privilege may be offered. However,
when the SAM Portfolios begin operations, SAM Portfolios' shareholders may
exchange their Class A Shares for Class A Common Shares of the Trust. More
information regarding the exchange privilege for the SAM Portfolios will be
provided in the SAM Portfolios' Prospectus upon commencement of the offering and
sale of shares of the SAM Portfolios.
PLEASE CALL 800-222-5852 IF YOU WOULD LIKE TO OBTAIN A PROSPECTUS FOR THE SHARES
OF THE SAM PORTFOLIOS.
PURCHASES THROUGH INSTITUTIONS
In the section "How to Invest in the Fund" under the heading "WAIVERS OF CLASS A
COMMON SHARES SALES CHARGES," the semicolon before the number (6) is deleted and
is replaced by the following text:
(investors may be charged an additional service or transaction fee by the
Authorized Dealer or Banks);
CHANGES IN WAIVERS OF CLASS A COMMON SHARES SALES CHARGES
In the section "How to Invest in the Fund" under the heading "WAIVERS OF CLASS A
COMMON SHARES SALES CHARGES," the second paragraph is deleted and restated as
follows:
Additional groups of investors that are not subject to an initial sales charge
on purchases of Class A Common Shares through an Authorized Dealer include
either (a) investors purchasing Class A Common Shares through an employee
benefit trust created pursuant to a 401(k) Plan that has invested in the
aggregate more than $1 million in the Fund, or (b) investors purchasing Class A
Common Shares through a 403(b) Plan that has more than $1 million in the Fund.
In the section "How to Invest in the Fund" under the heading "WAIVERS OF CLASS A
COMMON SHARES SALES CHARGES," in the third paragraph the "and" is deleted before
Roman numeral (v) and the following is added at the end of the sentence "; and
(vi) by a 401(k) Plan participant so long as the shares were purchased through
the 401(k) Plan and the 401(k) Plan continues in effect with investments in
Class A Common Shares of the Fund."
CHANGE IN APPLICATION OF CLASS A COMMON SHARES EARLY WITHDRAWAL CHARGE
In the section "How to Invest in the Fund" under the heading "APPLICATION OF
CLASS A COMMON SHARES EARLY WITHDRAWAL CHARGE," the second sentence is deleted.
CHANGE IN INVESTING BY WIRE
In the section "How to Invest in the Fund" under the heading "By Wire" the text
following number two is deleted and restated as follows:
2. Instruct your bank to wire Federal Funds exactly as follows:
Boston Safe Deposit Trust
Westborough, MA
ABA #011-001234
For credit to: Sierra Prime Income Fund
Account #132012
(Fund Name)
(Customer's Name)
(Customer's Social Security Number)
CHANGE IN TRANSFER AGENT RESPONSIBILITIES
In the section "CUSTODIAN, ADMINISTRATOR AND TRANSFER AGENT" the third sentence
is deleted and replaced with the following:
Sierra Administration is responsible for all administrative recordkeeping and
accounting services for the Trust. First Data Investor Services Group, Inc.
("First Data"), a subsidiary of First Data Corp., serves as sub-administrator
and transfer agent of the Trust. First Data is located at One Exchange Place, 53
State Street, Boston, Massachusetts 02109-2873.
CREDIT AGREEMENT WITH DEUTSCHE BANK, AG, NEW YORK BRANCH
The Trust has entered into a Credit Agreement dated as of May 22, 1996, with
Deutsche Bank AG, New York Branch ("Deutsche Bank"), pursuant to which Deutsche
Bank has agreed to provide a credit facility in the maximum amount of
$40,000,000 in the aggregate to the Trust and the Sierra Trust Funds, which is
not secured by the assets of the Trust or other collateral. The Trust itself is
entitled to borrow from Deutsche Bank amounts which in the aggregate do not
exceed $433,000.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
