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Prudential Distressed Securities Fund, Inc.
Supplement dated May 27, 1999 to
Prospectus dated February 5, 1999
The Board of Directors of Prudential Distressed Securities Fund, Inc. (the
Fund) has recently approved a proposal to exchange the assets and liabilities of
the Fund for shares of the Prudential High Yield Total Return Fund, Inc. Class
A, Class B and Class C shares of the Fund would be exchanged at net asset value
for respective Class A, Class B and Class C shares of equivalent value of
Prudential High Yield Total Return Fund, Inc. The Board determined that, based
upon the Manager's recommendation, the Fund should be reorganized due to a
declining asset base which is unlikely to improve and the opportunity to
participate in a larger fund with a similar objective and policies.
The transfer is subject to approval by the shareholders of the Fund. The
shareholders' meeting is scheduled to occur in August 1999. It is anticipated
that a proxy statement/prospectus relating to the transaction will be mailed to
the Fund's shareholders in July 1999.
Under the terms of the proposal, shareholders of the Fund would become
shareholders of Prudential High Yield Total Return Fund, Inc. No sales charges
would be imposed on the proposed transfer. The Fund anticipates obtaining an
opinion of counsel that the transaction will not result in gain or loss to
shareholders of the Fund for federal income tax purposes.
EFFECTIVE IMMEDIATELY, THE FUND WILL NO LONGER ACCEPT ORDERS TO PURCHASE OR
EXCHANGE INTO ITS SHARES OF ANY CLASS, EXCEPT FOR PURCHASES BY CERTAIN AUTOMATIC
INVESTMENT, RETIREMENT AND EMPLOYEE PLANS (EXCLUDING IRA ACCOUNTS). Existing
shareholders may continue to acquire shares through dividend reinvestment. The
current exchange privilege of obtaining shares of other Prudential Mutual Funds
and the current redemption rights will remain in effect until the transaction is
consummated, which is anticipated to occur by the end of August 1999.
The investment objective of Prudential High Yield Total Return Fund, Inc. is
total return through high current income and capital appreciation. George
Edwards and Paul Price, CFA, are the portfolio managers for both funds.
MF171C1 (5/27/99)
