MANAGED SECURITIES PLUS FUND, INC.
SEMI-ANNUAL REPORT
JUNE 30, 2000
(UNAUDITED)
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<TABLE>
<CAPTION>
MANAGED SECURITIES PLUS FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000
(unaudited)
ASSETS
<S> <C>
Cash......................................................$1,641
---------
NET ASSETS APPLICABLE TO OUTSTANDING CAPITAL SHARE.................$1,641
=========
NET ASSETS CONSIST OF:
Common shares:
Paid-in capital (Notes A,D).............................. 1,641
--------
Net assets applicable to outstanding capital share..$1,641
========
NET ASSET VALUE PER COMMON SHARE:
($1,641 / 1)...........................................$1,641
========
</TABLE>
The accompanying notes are an integral part of the financial statements.
1
<PAGE>
MANAGED SECURITIES PLUS FUND, INC.
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2000
(UNAUDITED)
THE FUND HAD NO ACTIVITY DURING THE SIX MONTHS ENDED JUNE 30, 2000.
The accompanying notes are an integral part of the financial statements.
2
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<TABLE>
<CAPTION>
MANAGED SECURITIES PLUS FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS FOR THE YEAR
ENDED JUNE 30, 2000 ENDED
(UNAUDITED) DECEMBER 31, 1999
------------------------ ---------------------
INCREASE/(DECREASE) IN NET ASSETS FROM
OPERATIONS
<S> <C> <C>
Net investment income................................................ - $22,089,675
Net realized loss on investments and foreign currency
related transactions............................................. - (2,018,403)
Net change in unrealized appreciation in value of
investments and translation of other assets and liabilities
denominated in foreign currencies................................ - (6,842,744)
--------- ----------------
Net increase in net assets resulting from operations................. - 13,228,528
--------- ----------------
Dividends to preferred shareholders:
Net investment income................................................ - (24,696,944)
Dividends and distributions to common shareholders:
Net investment income................................................ - -
Net realized gain from investments................................... - (3,180,479)
Return of capital.................................................... - (107,346,540)
--------- ----------------
Total dividends and distributions to shareholders...................... - (135,223,963)
--------- ----------------
CAPITAL SHARE TRANSACTIONS
Redemption of common and preferred shares (Note D)................. - (408,928,000)
--------- ----------------
Total decrease in net assets......................................... - (530,923,435)
--------- ----------------
NET ASSETS
Beginning of period.................................................. $1,641 530,925,076
--------- ----------------
End of period........................................................ $1,641 $1,641
========= ================
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
MANAGED SECURITIES PLUS FUND, INC.
FINANCIAL HIGHLIGHTS
===================================================================================================================================
Contained below is per share operating performance data for a share of common
stock outstanding, total investment return, ratios to average net assets and
other supplemental data for each period indicated. This information has been
derived from information provided in the financial statements.
===================================================================================================================================
FOR THE PERIOD
FOR THE SIX MONTHS FEBRUARY 5, 1997*
ENDED JUNE 30, FOR THE YEARS ENDED THROUGH
2000 DECEMBER 31, DECEMBER 31, DECEMBER 31,
(UNAUDITED) 1999 1998 1997
--------------- ------------- --------------- -------------
PER SHARE OPERATING PERFORMANCE**
<S> <C> <C> <C> <C>
Net asset value, beginning of period.................... $1,641.00 $10,329.52 $10,185.75 $10,000.00
------------ --------------- --------------- --------------
Net investment income................................... - 742.39 908.58 836.13
Net realized and unrealized gain on investments and
foreign currency related transactions.................. - 1,370.95(1) 315.78 187.38 (1)
------------ --------------- --------------- --------------
Net increase in net assets resulting from operations.... - 2,113.34 1,224.36 1,023.51
------------ --------------- --------------- --------------
Dividends to preferred shareholders:
Net investment income.................................. - (830.02) (828.42) (746.19)
Dividends and distributions to common shareholders:
Net investment income.................................. - - (73.17) (90.08)
Net realized gain from investments..................... - (99.28) (179.00) (1.49)
Return of capital....................................... - (3,350.72) - -
------------ --------------- --------------- --------------
Total dividends and distributions to shareholders....... - (4,280.02) (1,080.59) (837.76)
------------ --------------- --------------- --------------
Capital Share Transactions:
Redemption of common shares (Note D)................... - (6,521.84) - -
------------ --------------- --------------- --------------
Net asset value, end of period..........................$ 1,641.00 $1,641.00 $10,329.52 $10,185.75
============ =============== =============== ==============
Total investment return (2)............................. 0.00% -22.98% 3.79% 2.78%
============ =============== =============== ==============
RATIOS/SUPPLEMENTAL DATA
Net assets applicable to outstanding capital shares
at end of period (000's omitted)...................... $2 $2 $530,925 $526,319
Ratio of expenses to average net assets................. - 0.13% 0.13% 0.14%(3)
Ratio of net investment income to average net assets.... - 4.72% 5.47% 5.71%(3)
Portfolio turnover rate................................. - 52.76% 66.76% 25.79%
Value of preferred shares outstanding (000's omitted)... - - $200,000 $200,000
Net asset coverage per share of preferred shares,
end of period......................................... - - $265,463 $263,159
Liquidation value per share of preferred shares,
if any (4)(Note D) ................................. - - $100,000 $100,000
<FN>
----------
* Commencement of investment operations.
** Calculated based on average shares outstanding.
(1) The amount shown for a common share outstanding is not in accordance with
the change in the aggregate gains and losses in investments during the
period due to the timing of sales of Fund shares in connection with the
Fund's offerings and fluctuating net asset values.
(2) Total investment return is calculated assuming a purchase of common shares
at the net asset value on the first day and a sale of common shares on the
last day of each period. Total investment return includes reinvestment of
dividends and distributions, if any. Underwriting discounts and
commissions, if any, are not reflected in total investment return. Total
investment return is not annualized.
(3) Annualized.
(4) Excluding accumulated but unpaid dividends, if any.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
Managed Securities Plus Fund, Inc.
Notes to Financial Statements
NOTE A - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Managed Securities Plus Fund, Inc. (the "Fund"), formerly known as Managed
Income Securities Plus Fund, Inc., is a non-diversified, closed-end management
investment company registered with the Securities and Exchange Commission (the
"Commission") under the Investment Company Act of 1940, as amended (the "1940
Act"). The Fund was incorporated under the laws of the State of Delaware on
January 27, 1997.
ORGANIZATIONAL MATTERS - Prior to commencing investment operations on February
5, 1997, the Fund did not have any transactions other than those relating to
organizational matters.
MANAGEMENT ESTIMATES - The preparation of financial statements in accordance
with generally accepted accounting principles requires management to make
certain estimates and assumptions that may affect the reported amounts and
disclosures in the financial statements. Actual results could differ from those
estimates.
PORTFOLIO VALUATION - Investments, if any, are stated at fair value in the
accompanying financial statements. Investments (including short-term
investments) are valued by one or more independent pricing services (the
"Service") approved by the Fund's Board of Directors. Securities for which
quoted bid prices in the judgment of the Service are representative and readily
available, are valued at the mean between the quoted bid prices (as obtained by
the Service from dealers in such securities) and asked prices (as calculated by
the Service based upon its evaluation of the market for such securities).
Securities which mature in 60 days or less are valued at amortized cost, which
approximates market value, unless this method does not represent fair value.
Expenses and fees, including the investment advisory and administration fees,
are accrued daily and taken into account for the purpose of determining the net
asset value of the Fund's shares. The net asset value of the Fund is calculated
at the end of each month and at any other times determined by the Board of
Directors.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME - Investment transactions are
recorded on the trade date (the date on which the order to buy or sell is
executed). Realized gains and losses from securities, if any, are calculated on
the identified cost basis. Interest income is recorded on an accrual basis.
Discounts are accreted over the lives of the related investments into interest
income with adjustments to the cost of such investments.
U.S. FEDERAL TAX STATUS - The Fund has distributed substantially all of its
taxable income in compliance with the requirements of the Internal Revenue Code
of 1986, as amended, applicable to regulated investment companies. Accordingly,
no provision for U.S. federal income taxes is required. In addition, by
distributing during each calendar year substantially all of its ordinary income
and capital gains, if any, the Fund is not subject to a U.S. federal excise tax.
At December 31, 1999, the Fund had capital loss carryforwards of $2,018,403
available as a reduction to the extent provided in regulations of any future net
capital gains realized before the end of 2007. To the extent that the capital
loss carryforward is used to offset future capital gains, it is probable that
the gains so offset will not be distributed to shareholders. Based on the Fund's
current size and lack of investment activity, it is unlikely that such loss
carryforwards will be utilized by the Fund.
5
<PAGE>
DIVIDENDS AND DISTRIBUTIONS - The Fund distributes, at least annually to
shareholders substantially all of its net investment income and net realized
short-term capital gains, if any. The Fund determines annually whether to
distribute any net realized long-term capital gains in excess of net realized
short-term capital losses, if any. An additional distribution may be made to the
extent necessary to avoid the payment of a 4% U.S. federal excise tax. Dividends
and distributions to shareholders are recorded by the Fund on the respective
shares' ex-dividend date.
The character of distributions made during the year from net investment income
or net realized gains may differ from their ultimate characterization for U.S.
federal income tax purposes.
OTHER - Prior to December 6, 1999 the Fund had outstanding $50,000 aggregate
principal amounts of Floating Rate Notes (the "Notes") paying interest quarterly
at a floating rate equal to the three month London Interbank Offered Rate
("LIBOR") plus 2.50% per annum. The Notes were redeemable at face value at any
time by the Fund. On December 6, 1999, the Fund redeemed the Notes at face
value.
NOTE B - TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
At June 30, 2000, Bear Stearns Asset Management Inc. (the "Adviser"), a
wholly-owned subsidiary of The Bear Stearns Companies Inc. ("Bear Stearns"),
served as the Fund's investment adviser pursuant to an Investment Advisory
Agreement whereby the Fund has agreed to pay the Adviser a monthly fee equal to
an annual rate of 0.075% of the Fund's average monthly net assets. The Adviser
has undertaken to waive its fee until further notice.
For the six months ended June 30, 2000, Custodial Trust Company ("CTC"), a
wholly-owned subsidiary of Bear Stearns and an affiliate of the Adviser, served
as custodian to the Fund. CTC has voluntarily undertaken to waive its fee until
further notice.
NOTE C - INVESTMENTS IN SECURITIES
At June 30, 2000, the Fund had no investments in securities.
NOTE D - CAPITAL SHARE TRANSACTIONS
The Fund is authorized to issue up to 1,000 shares of $0.01 par value common
stock. The Fund currently has one share of common stock outstanding, which is
beneficially owned by Bear Stearns. The common shares have not been and will not
be registered under the Securities Act of 1933, as amended, and as a consequence
the common shares may be offered or transferred only in a private transaction.
The Fund is authorized to issue up to 3,000 shares of $0.01 par value preferred
stock. The Fund currently has no shares of preferred stock outstanding as a
result of the redemption of all 2,000 issued and outstanding shares for
$200,000,000 during the year ended December 31, 1999.
6
<PAGE>
BEAR
STEARNS
MANAGED SECURITIES PLUS FUND, INC.
575 Lexington Avenue
New York, NY 10022
1.212.272.9027
DIRECTORS AND CORPORATE OFFICERS
Samuel L. Molinaro, Jr. Chairman of the Board, President,
Secretary and Treasurer
INVESTMENT ADVISER LEGAL COUNSEL
Bear Stearns Asset Skadden, Arps, Slate, Meagher &
Management Inc. Flom LLP
575 Lexington Avenue Four Times Square
New York, NY 10022 New York, NY 10036
CUSTODIAN INDEPENDENT AUDITORS
Custodial Trust Company Deloitte & Touche LLP
101 Carnegie Center Two World Financial Center
Princeton, NJ 08540 New York, NY 10281
This report, including the financial statements herein, is submitted for the
general information of shareholders of the Fund. It is not a prospectus,
circular or representation intended for use in the purchase or sale of shares of
the Fund or of any securities mentioned in this report. The financial
information included herein is taken from the Fund's records without audit by
the Fund's independent auditors who do not express an opinion thereon. Total
investment return is based on historical results and is not intended to indicate
future performance. The total investment return and principal value of an
investment in the Fund will fluctuate, so that an investor's shares, when
redeemed, may be worth more or less than the original cost.
