MANAGED HIGH YIELD PLUS FUND INC, N-30D, 2000-02-09

MANAGED HIGH YIELD PLUS FUND INC
N-30D, 2000-02-09

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<PAGE>

MANAGED HIGH YIELD PLUS FUND INC. SEMIANNUAL REPORT

Dear Shareholder, January 15, 2000

We are pleased to present you with the semiannual report for Managed High Yield
Plus Fund Inc. (the "Fund") for the six-month period ended November 30, 1999.

HIGHLIGHTS OF THIS REPORT
- -------------------------------------------------------------------------------
- - After slumping for several months, high-yield bond issuance picked up
strongly in November (page 2)

- - The Fund outperformed its benchmark on a net-asset value basis for the six
months ended November 30, 1999 (page 2)

- - The Fund's biggest sector remained fixed communications (20.3%--page 3) -
We believe the market has discounted the default rate for 2000 too deeply,
and see opportunity in high-yield investments (page 5)

MARKET REVIEW
- -------------------------------------------------------------------------------

Attractive buying opportunities arose in the high yield sector during the first
two weeks of August, as Y2K related fears drove investors out of the market.
Investors expected a massive surge of new supply in September and October, as
issuers strove to complete their financing ahead of potential Y2K problems. Huge
open-end fund redemptions were expected for the same reason. The market sold
down during

July and early August as a result, and buyers backed away from new issues.
Facing reluctant, highly selective buyers, many issuers re-priced deals to
offer higher yields. The anticipated new supply did not materialize.
Estimates for September through October issuance had run as high as $30
billion; instead, it totaled $7.5 billion. October was the third consecutive
month of issuance below $5 billion. The situation began to change in
November.

By month-end new issuance reached about $16 billion, almost exclusively from
well-known telecommunications companies such as Nextel and Global Crossing.
Most of the new debt traded up in the secondary market, another important
change from August through October. For the six months ended November 30,
1999, the Credit Suisse First Boston High Yield Bond Index lost 0.71%.

Managed High Yield Plus Fund Inc.

INVESTMENT GOALS:
Primarily, high income;
secondarily, capital
appreciation

PORTFOLIO MANAGER:
Thomas J. Libassi,
Mitchell Hutchins Asset
Management Inc.

COMMENCEMENT:
June 26, 1998

NYSE SYMBOL:
HYF

DIVIDEND PAYMENTS:
Monthly

<PAGE>

SEMIANNUAL REPORT
<TABLE>
<CAPTION>

PORTFOLIO REVIEW
- ---------------------------------------------------------------------------------------------

PERFORMANCE

AVERAGE ANNUAL RETURNS (%), PERIODS ENDED 11/30/99
Since Inception
6 Mos.(1) 1 Yr. 6/26/98
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value Return(2) 0.65 1.16 -6.11
Market Price Return(3) -7.40 -6.36 -11.51
CS First Boston High Yield Bond Index -0.71 1.81 -0.92
- ---------------------------------------------------------------------------------------------
<CAPTION>
SHARE PRICE, DIVIDEND AND YIELD, 11/30/99
- ---------------------------------------------------------------------------------------------
<S> <C>
Net Asset Value $11.67
Market Price $10.69
12-Mo. Dividend $1.50
Market Yield(4) 14.03%
IPO Yield(4) 10.00%
- ---------------------------------------------------------------------------------------------
</TABLE>

PORTFOLIO POSITIONING

The Fund's top sector remained fixed communications (conventional telephone
systems), emphasizing companies that own fiber optic networks, such as
Metromedia Fiber (1.0%) and

Northeast Optic Network (1.7%).* We believe these companies will benefit as
the standard for telecommunications service shifts to a combination of voice
and data transmission. In cable, we favor new

entrants that offer integrated voice, data and video, such as RCN Corporation
(1.4%) and Knology Holdings (1.6%) in the United States, and United Pan
European Communications in Europe (3.0%).

(1) NAV and market price returns for periods of less than one year are not
annualized.

(2) NAV return assumes, for illustration only, that dividends were reinvested at
the net asset value on the payable dates.

(3) Market price return assumes dividends were reinvested under the Dividend
Reinvestment Plan.

(4) IPO yield is calculated by multiplying the November distribution by 12 and
dividing by the initial public offering price. Market yield is calculated by
multiplying the November distribution by 12 and dividing by the Fund's closing
price on November 30, 1999.

* Weightings represent percentages of portfolio assets as of November 30, 1999,
unless indicated otherwise. The Fund's portfolio is actively managed and its
composition will vary over time.

<PAGE>

MANAGED HIGH YIELD PLUS FUND INC. SEMIANNUAL REPORT
<TABLE>
<CAPTION>

TOP FIVE SECTORS*

As of 11/30/99 % As of 5/31/99 %
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Communications (fixed) 20.3 Communications (fixed) 17.5
Technology 11.1 Cable 9.9
Cable 10.8 Technology 8.1
Service 7.7 Service 8.0
Energy 5.9 General Industrial 7.1
- ------------------------------------------------------------------------------------------
Total 55.8 Total 50.6
</TABLE>

We sought to reduce the Fund's sensitivity to rising interest
rates by selling some of its most rate-sensitive holdings. As a
consequence, we reduced the Fund's holdings of BB-rated bonds
from about 26% as of May 31,

1999 to about 20% at period-end. Assets moved out of BB credits
were reinvested into B-rated credits, which slightly reduced
overall portfolio quality. During the period about 4% of the
Fund's B holdings were downgraded to

CCC credits, which resulted in an overweighting to this
lower-quality credit tier. To correct this overweighting we sold
some of the Fund's CCC holdings and reinvested the proceeds in B
credits.
<TABLE>
<CAPTION>

CREDIT QUALITY*
11/30/99 5/31/99
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash 0.6% 2.1%
BB & Higher 19.9 25.8
B 59.6 56.8
CCC & Lower 9.2 2.6
Non-Rated 7.3 11.3
Equity/Preferred 3.4 1.4
- ---------------------------------------------------------------------------------------------------------------------------
Total 100.0 100.0
</TABLE>

Two issues we bought at what we believe were attractive discounts were Blount
13's of `09 and Intersil 13.25's of `09. We believe that under better market
conditions Blount could have sold with a yield in the low

11% range. Intersil offered a yield of 13.25% with equity participation
thrown in. As of November 30, 1999, the Blount bonds the Fund purchased were
trading around 105% of par value; the Intersil bonds were trading at 120% of
par. Of

course, no guarantee can be given that these or any other high yield
securities will continue to increase in value in the future.

* Weightings represent percentages of portfolio assets as of November 30, 1999,
unless indicated otherwise. The Fund's portfolio is actively managed and its
composition will vary over time.

<PAGE>

SEMIANNUAL REPORT
<TABLE>
<CAPTION>

TOP TEN HOLDINGS*
11/30/99 5/31/99
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Northeast Optic Network Inc. 1.7% Viatel 2.7%
Intersil 1.7 Northeast Optic Network Inc. 1.7
Verio 1.7 Verio 1.7
Williams 1.7 Alestra S.A. 1.6
Alestra S.A. 1.6 Hyperion Telecommunications 1.5
Hyperion Telecommunications 1.6 NTL Inc. 1.5
Knology Holdings 1.6 Samsung Electronics 1.4
Mrs. Fields 1.6 Westpoint Stevens 1.4
Park N View 1.6 Orion Refining 1.3
Blount 1.5 Lyondell 1.3
- --------------------------------------------------------------------------------------------
Total 16.3 Total 16.1
</TABLE>

OUTLOOK
- -------------------------------------------------------------------------------
We see the greatest opportunity in the high end of the single-B sector, where
yields of up to 13% are available with what we believe to be less credit risk
than some CCC-rated bonds. We expect to maintain our focus on high single-B
credits going forward.

The high yield sector has been in a bear market since August 1998, after
Russia devalued the ruble. As of mid-November 1999, the CS First Boston High
Yield Bond Index spread to Treasurys was 628 basis points--well above its
average of 506 basis points since the end of the last

recession in 1992. We believe the Fund is well positioned to benefit from any
market recovery; we think we have bought good assets cheaply, the overall
credit quality is good and the Fund is well diversified.

CHARACTERISTICS*
11/30/99 5/31/99
- -------------------------------------------------------------------------------
<S> <C> <C>
Weighted Average Maturity 7.43 yrs 7.89 yrs
Weighted Average Price $86.28 $87.48
Net Leverage 28.43% 26.46%
Net Assets ($mm) $371.9 $388.9
- -------------------------------------------------------------------------------
</TABLE>

Prices of high-yield securities tend to reflect potential defaults six to
twelve months in advance. As of November 22, 1999, the CS First Boston High
Yield Bond Index spread had narrowed to

614 basis points, implying a perceived default rate of about 5.5% for 2000.
We expect the actual rate to fall somewhere between 3-4%. We believe defaults
are peaking now, and will decline in 2000. If correct,

our view implies that current prices are discounting the 2000 default rate
too heavily, and that there may be upside potential in high yields.

* Weightings represent percentages of portfolio assets as of November 30, 1999,
unless indicated otherwise. The Fund's portfolio is actively managed and its
composition will vary over time.

<PAGE>

MANAGED HIGH YIELD PLUS FUND INC. SEMIANNUAL REPORT

Our ultimate objective in managing your investments is to help you
successfully meet your financial goals. We thank you for your continued support
and welcome any comments or questions you may have. For a Quarterly Review on
Managed High Yield Plus Fund Inc. or another fund in the PaineWebber Family of
Funds,5 please contact your Financial Advisor.

Sincerely,

/s/ Margo Alexander

MARGO ALEXANDER
Chairman and
Chief Executive Officer
Mitchell Hutchins
Asset Management Inc.

/s/ Brian M. Storms

BRIAN M. STORMS
President and
Chief Operating Officer
Mitchell Hutchins
Asset Management Inc.

/s/ Thomas J. Libassi

THOMAS J. LIBASSI
Portfolio Manager
Managed High Yield Plus Fund Inc.

This letter is intended to assist shareholders in understanding how the
Fund performed during the six-month period ended November 30, 1999, and reflects
our views at the time of its writing. Of course, these views may change in
response to changing circumstances. We encourage you to consult your Financial
Advisor regarding your personal investment program.

(5) Mutual funds are sold by prospectus only. The prospectuses for the funds
contain more complete information regarding risks, charges and expenses, and
should be read carefully before investing.

<PAGE>
MANAGED HIGH YIELD PLUS FUND INC.

PORTFOLIO OF INVESTMENTS NOVEMBER 30, 1999 (UNAUDITED)

$ 4,500 HDA Parts Systems Incorporated**.................. 08/01/05 12.000% $ 4,050,000
4,000 JL French Automotive Castings**................... 06/01/09 11.500 4,040,000
------------
8,090,000
------------
CABLE--14.76%

14,500 21st Century Telecom Group Incorporated........... 02/15/08 12.250+ 6,670,000
13,250 Knology Holdings Incorporated..................... 10/15/07 11.875+ 8,215,000
6,000 NTL Incorporated.................................. 10/01/08 11.500 6,510,000
11,175 Park 'N View Incorporated......................... 05/15/08 13.000 8,381,250
10,000 RCN Corporation................................... 10/15/07 11.125+ 7,100,000
3,000 UIH Australia/Pacific Incorporated................ 05/15/06 14.000+ 2,430,000
4,775 United Pan Europe**............................... 08/01/09 10.875 4,894,375
18,650 United Pan Europe**............................... 08/01/09 to 11/01/09 12.500 to 13.375+ 10,673,750
------------
54,874,375
------------
CHEMICALS--3.26%

1,000 Georgia Gulf Corporation**........................ 11/01/07 10.375 1,040,000
6,800 Lyondell Chemical Company......................... 05/01/07 9.875 6,987,000
4,000 ZSC Specialty**................................... 07/01/09 11.000 4,080,000
------------
12,107,000
------------
COMMUNICATIONS-FIXED--27.04%

8,687 Alestra S.A.**.................................... 05/15/06 12.125 8,567,554
5,000 Allegiance Telecom Incorporated................... 05/15/08 12.875 5,550,000
6,750 Barak ITC......................................... 11/15/07 12.500+ 3,645,000
2,250 Carrier1 International S.A.#...................... 02/15/09 13.250 2,317,500
4,130 Esprit Telecom Group PLC.......................... 06/15/08 10.875 4,150,650
3,500 Facilicom International Incorporated.............. 01/15/08 10.500 3,080,000
5,000 Flag Limited...................................... 01/30/08 8.250 4,500,000
5,000 Global Crossing Holdings Limited**................ 11/15/09 9.500 4,925,000
6,000 GlobeNet Communications Group**................... 07/15/07 13.000 6,060,000
6,000 GST Equipment Funding Incorporated................ 05/01/07 13.250 6,000,000
7,750 Hyperion Telecommunications Incorporated.......... 11/01/07 12.000 8,098,750
5,000 Metromedia Fiber Network Incorporated............. 11/15/08 10.000 5,050,000
5,125 NEXTLINK Communications Incorporated.............. 06/01/09 10.750 5,253,125
8,500 NorthEast Optic Network Incorporated.............. 08/15/08 12.750 9,010,000
7,475 Pathnet Incorporated.............................. 04/15/08 12.250 4,784,000
4,750 Tele1 Europe BV**................................. 05/15/09 13.000 4,821,250
10,000 Viatel Incorporated............................... 04/15/08 12.500+ 6,100,000
8,250 Williams Communications Group..................... 10/01/09 10.875 8,621,250
------------
100,534,079
------------
COMMUNICATIONS-MOBILE--6.95%

6,500 ICO Global Communications Limited(b)#............. 08/01/05 15.000 3,250,000
5,000 Nextel Communications Incorporated................ 02/15/08 9.950+ 3,525,000
12,500 Nextel International Incorporated................. 04/15/08 12.125+ 6,875,000
7,500 PTC International Finance**....................... 12/01/09 11.250 7,443,750
</TABLE>

6
<PAGE>
MANAGED HIGH YIELD PLUS FUND INC.

<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- --------------------- ------------------ ----------------
<C> <S> <C> <C> <C>
CORPORATE BONDS--(CONTINUED)
COMMUNICATIONS-MOBILE--(CONCLUDED)
$ 5,250 Spectrasite Holdings Incorporated................. 04/15/09 11.250%+ $ 2,677,500
2,000 Voicestream Wire**................................ 11/15/09 10.375 2,080,000
------------
25,851,250
------------
CONSUMER MANUFACTURING--2.82%

4,000 Commemorative Brands Incorporated................. 01/15/07 11.000 2,720,000
4,500 Decora Industries Incorporated.................... 05/01/05 11.000 3,870,000
4,250 Jafra Cosmetics International Incorporated........ 05/01/08 11.750 3,910,000
------------
10,500,000
------------
ENERGY--8.22%

1,650 GulfMark Offshore Incorporated.................... 06/01/08 8.750 1,505,625
4,000 Key Energy Services Incorporated.................. 01/15/09 14.000 4,360,000
4,000 Northern Offshore ASA............................. 05/15/05 10.000 2,400,000
7,484 Orion Refining Corporation**...................... 12/01/03 15.000 6,660,904
2,700 Pride International Incorporated.................. 06/01/09 10.000 2,740,500
5,750 R & B Falcon Corporation.......................... 12/15/08 9.500 5,678,125
7,500 Tesoro Petroleum Corporation...................... 07/01/08 9.000 7,218,750
------------
30,563,904
------------
FINANCE--5.27%

5,000 Airplanes Pass-Through Trust...................... 03/15/19 10.875 4,450,000
5,000 Morgan Stanley Aircraft Finance................... 03/15/23 8.700 4,300,000
5,500 Olympic Financial Limited......................... 03/15/07 11.500 5,582,500
5,000 Signet Capital Trust I............................ 08/15/27 9.500 2,500,000
5,050 Superior National Insurance Group................. 12/01/17 10.750 2,777,500
------------
19,610,000
------------
FOOD & BEVERAGE--4.85%

6,500 Iowa Select Farms L.P.**.......................... 12/01/05 10.750 3,510,000
15,875 Mrs. Field's Holdings Company Incorporated**#..... 12/01/05 14.000+ 8,255,000
7,308 Packaged Ice Incorporated......................... 02/01/05 9.750 6,284,880
------------
18,049,880
------------
GAMING--2.30%

4,000 Hollywood Casino Corporation...................... 05/01/07 11.250 4,140,000
4,625 Park Place Entertainment Corporation.............. 12/15/05 7.875 4,399,531
------------
8,539,531
------------
GENERAL INDUSTRIAL--7.02%

7,000 Aqua Chemical Incorporated........................ 07/01/08 11.250 3,780,000
7,500 Blount Incorporated**............................. 08/01/09 13.000 7,856,250
3,000 J.B. Poindexter & Company Incorporated............ 05/15/04 12.500 2,835,000
1,325 Jordan Telecommunication Products................. 08/01/07 9.875 1,298,500
5,900 Jordan Telecommunication Products................. 08/01/07 11.750+ 5,133,000
</TABLE>

7
<PAGE>
MANAGED HIGH YIELD PLUS FUND INC.

<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------- --------------------- ------------------ ----------------
<C> <S> <C> <C> <C>
CORPORATE BONDS--(CONTINUED)
GENERAL INDUSTRIAL--(CONCLUDED)
$ 7,000 Sabreliner Corporation**.......................... 06/15/08 11.000% $ 5,197,500
------------
26,100,250
------------
HEALTHCARE--1.49%

3,000 Fresenius Medical Care Capital Trust.............. 02/01/08 7.875 2,730,000
2,700 Triad Hospitals Holdings Incorporated**........... 05/15/09 11.000 2,794,500
------------
5,524,500
------------
HOTELS & LODGING--2.79%

4,650 Host Marriott L.P................................. 02/15/06 8.375 4,417,500
2,875 Signature Resorts Incorporated.................... 05/15/06 9.250 2,673,750
5,072 Silverleaf Resorts Incorporated................... 04/01/08 10.500 3,296,800
------------
10,388,050
------------
METALS--1.16%

6,000 Metal Management Incorporated..................... 05/15/08 10.000 4,320,000
------------
PAPER & PACKAGING--1.42%

5,125 Packaging Corporation of America.................. 04/01/09 9.625 5,291,562
------------
REAL ESTATE--2.34%

6,000 American Architectural Products Corporation....... 12/01/07 11.750 2,280,000
3,575 D.R. Horton Incorporated.......................... 02/01/09 8.000 3,289,000
3,500 Engle Homes Incorporated.......................... 02/01/08 9.250 3,150,000
------------
8,719,000
------------
RESTAURANTS--1.15%

5,480 American Restaurant Group Incorporated............ 02/15/03 11.500 4,274,400
------------
RETAIL--2.59%

5,660 Advance Holding Corporation....................... 04/15/09 12.875+ 2,745,100
1,750 Advance Stores Company Incorporated............... 04/15/08 10.250 1,505,000
5,500 Ames Department Stores Incorporated............... 04/15/06 10.000 5,390,000
------------
9,640,100
------------
SERVICE--10.16%

7,500 Allied Waste North America Incorporated**......... 08/01/09 10.000 6,853,125
5,995 American Eco Corporation.......................... 05/15/08 9.625 3,297,250
11,750 Ameriserve Food Distribution Incorporated......... 07/15/07 10.125 3,760,000
6,385 Atlantic Express Transportation Corporation....... 02/01/04 10.750 6,193,450
7,750 Budget Group Incorporated......................... 04/01/06 9.125 6,897,500
4,000 Nationwide Credit Incorporated.................... 01/15/08 10.250 2,280,000
4,750 Premier Graphics Incorporated..................... 12/01/05 11.500 3,325,000
5,500 Waste Systems International Incorporated#......... 01/15/06 11.500 5,170,000
------------
37,776,325
------------
</TABLE>

8
<PAGE>
MANAGED HIGH YIELD PLUS FUND INC.

$ 6,000 The Pantry Incorporated........................... 10/15/07 10.250% $ 5,700,000
------------
TECHNOLOGY--15.24%

6,500 Ampex Corporation++............................... 03/15/03 12.000 6,500,000
3,500 ASAT Finance LLC**#............................... 11/01/06 12.500 3,640,000
3,500 Chippac International Limited**................... 08/01/09 12.750 3,587,500
8,000 Earthwatch Incorporated**#........................ 07/15/07 13.000+ 5,600,000
6,000 Fairchild Semiconductor Corporation............... 03/15/07 10.125 6,000,000
7,500 Intersil Corporation**#........................... 08/15/09 13.250 9,000,000
2,375 PSI Net Incorporated**............................ 12/01/06 10.500 2,392,812
4,250 SCG Holdings Corporation**........................ 08/01/09 12.000 4,483,750
8,275 Verio Incorporated................................ 12/01/08 11.250 8,647,375
11,000 Wam! Net Incorporated............................. 03/01/05 13.250+ 6,820,000
------------
56,671,437
------------
TRANSPORTATION--5.38%

1,465 Eletson Holdings Incorporated..................... 11/15/03 9.250 1,362,450
6,500 Equimar Shipholdings Limited...................... 07/01/07 9.875 4,030,000
6,000 Millenium Seacarriers Incorporated................ 07/15/05 12.000 3,300,000
6,250 Stena AB.......................................... 06/15/07 8.750 5,343,750
9,500 TFM S.A. de C.V................................... 06/15/09 11.750+ 5,985,000
------------
20,021,200
------------
UTILITIES--2.18%

2,000 AES Corporation................................... 06/01/09 9.500 2,020,000
5,000 Calpine Corporation............................... 04/01/08 7.875 4,762,500
1,314 Panda Funding Corporation......................... 08/20/12 11.625 1,314,423
------------
8,096,923
------------
Total Corporate Bonds (cost--$551,926,657).................... 491,243,766
------------

CONVERTIBLE BONDS--0.32%
SERVICE--0.32%

Waste Systems International Incorporated**
1,500 (cost--$1,205,927)................................ 05/13/05 7.000 1,185,000
------------
</TABLE>

<TABLE>
<CAPTION>
NUMBER
OF
SHARES
- ----------
<C> <S> <C>
COMMON STOCK(a)--1.90%
COMMUNICATIONS-FIXED--1.36%

4,750 Tele1 Europe BV**............................................................................. 403,750
110,549 Viatel Incorporated........................................................................... 4,643,058
-------------
5,046,808
-------------
</TABLE>

9
<PAGE>
MANAGED HIGH YIELD PLUS FUND INC.

<TABLE>
<CAPTION>
NUMBER
OF
SHARES/WARRANTS VALUE
- --------------- -------------
<C> <S> <C>

COMMON STOCK(a)--(CONCLUDED)
FOOD & BEVERAGE--0.03%

28,153 Packaged Ice Incorporated............................................... $ 98,536
-------------
GENERAL INDUSTRIAL--0.11%

2,000 Jordan Telecommunication Products....................................... 400,000
-------------
SERVICE--0.28%

235,275 Waste Systems International Incorporated................................ 1,058,738
-------------
TECHNOLOGY--0.12%

100,000 Ampex Corporation....................................................... 456,250
-------------
Total Common Stock (cost--$5,154,662).................................................... 7,060,332
-------------

PREFERRED STOCK(a)--2.30%
CABLE--0.17%

1,264 21st Century Telecom Group Incorporated**............................... 632,000
-------------
COMMUNICATIONS-MOBILE--1.12%

4,063 Crown Castle International Corporation.................................. 4,184,890
-------------
ENERGY--0.05%

282,988 Orion Refining Corporation.............................................. 193,281
-------------
GENERAL INDUSTRIAL--0.72%

2,683 Jordan Telecommunication Products....................................... 2,683,000
-------------
PAPER & PACKAGING--0.24%

7,935 Packaging Corporation of America........................................ 872,850
-------------
Total Preferred Stock (cost--$8,218,381)................................................. 8,566,021
-------------

WARRANTS(a)--0.46%
CABLE--0.25%

1,000 21st Century Telecom Group Incorporated................................. 10,000
12,175 Park 'N View Incorporated............................................... 913,125
-------------
923,125
-------------
COMMUNICATION-FIXED--0.02%

7,475 Pathnet Incorporated.................................................... 74,750
-------------
ENERGY--0.03%

4,000 Key Energy Services Incorporated........................................ 100,000
-------------
</TABLE>

10
<PAGE>
MANAGED HIGH YIELD PLUS FUND INC.

<TABLE>
<CAPTION>
NUMBER OF
WARRANTS VALUE
- --------------- -------------
<C> <S> <C>

WARRANTS(a)--(CONCLUDED)
SERVICE--0.01%

82,500 Waste Systems International Incorporated**.............................. $ 61,875
-------------
TECHNOLOGY--0.15%

24,000 Wam! Net Incorporated................................................... 546,000
-------------
TRANSPORTATION--0.00%

6,000 Millenium Seacarriers Incorporated...................................... 750
-------------
Total Warrants (cost--$113).............................................................. 1,706,500
-------------
</TABLE>

<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATE RATE
- --------- --------- ----------
<C> <S> <C> <C> <C>
REPURCHASE AGREEMENT--0.82%
$ 3,040 Repurchase agreement dated 11/30/99 with State Street
Bank & Trust Company, collaterlized by $3,100,000
U.S. Treasury Notes, 5.750% due 11/15/00 (value--
$3,103,875); proceeds: $3,040,475
(cost--$3,040,000)................................... 12/01/99 5.620% 3,040,000
-------------
Total Investments (cost--$569,545,740)--137.90%.................. 512,801,619
Liabilities in excess of other assets--(37.90)%.................. (140,940,845)
-------------
Net Assets--100.00%.............................................. $ 371,860,774
=============
</TABLE>

- ---------------

# Security represents a unit which is composed of the stated bond with
attached warrants or common stock.
++ Illiquid securities representing 1.7% of net assets. These securities are
valued at fair value as determined in good faith by a valuation committee
under the direction of the Fund's board of directors.
+ Denotes a step-up bond or zero coupon bond that converts to the noted fixed
rate at a designated future date.
** Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
(a) Non-income producing securities.
(b) Bond interest in default.

See accompanying notes to financial statements

11
<PAGE>
MANAGED HIGH YIELD PLUS FUND INC.

STATEMENT OF ASSETS AND LIABILITIES NOVEMBER 30, 1999(UNAUDITED)

<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost--$569,545,740).... $ 512,801,619
Cash........................................................ 52,787
Interest receivable......................................... 12,474,025
Unrealized appreciation on interest rate swap............... 218,383
-------------
Total assets................................................ 525,546,814
-------------

LIABILITIES
Bank loan payable........................................... 150,000,000
Payable for investments purchased........................... 2,427,614
Payable for interest on bank loan........................... 742,836
Payable to investment adviser and administrator............. 292,236
Accrued expenses and other liabilities...................... 223,354
-------------
Total liabilities........................................... 153,686,040
-------------

NET ASSETS
Capital Stock--$0.001 par value; 200,000,000 shares
authorized; 31,858,628 shares issued and outstanding...... 474,998,612
Undistributed net investment income......................... 5,858,830
Accumulated net realized loss from investment
transactions.............................................. (52,470,930)
Net unrealized depreciation of investments and interest rate
swap...................................................... (56,525,738)
-------------
Net assets applicable to shares outstanding................. $ 371,860,774
=============
Net asset value per share................................... $11.67
=============
</TABLE>

See accompanying notes to financial statements

12
<PAGE>
MANAGED HIGH YIELD PLUS FUND INC.

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
FOR THE
SIX MONTHS
ENDED
NOVEMBER 30, 1999
(UNAUDITED)
------------------
<S> <C>
INVESTMENT INCOME:
Interest and dividends...................................... $ 30,575,696
------------

EXPENSES:
Interest expense, loan commitment and other fees............ 4,252,192
Investment advisory and administration...................... 1,827,517
Legal and audit............................................. 180,716
Custody and accounting...................................... 157,956
Report and notices to shareholders.......................... 54,439
Directors' fees............................................. 5,250
Transfer agency and service fees............................ 3,675
Other expenses.............................................. 29,877
------------
6,511,622
------------
Net investment income....................................... 24,064,074
------------

REALIZED AND UNREALIZED GAINS (LOSSES) FROM INVESTMENT
ACTIVITIES:
Net realized loss from investment transactions.............. (18,814,575)
Net change in unrealized appreciation/depreciation of:
Investments............................................. (3,143,743)
Interest rate swap...................................... 134,952
------------
NET REALIZED AND UNREALIZED LOSS FROM INVESTMENT
ACTIVITIES................................................ (21,823,366)
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $ 2,240,708
============
</TABLE>

See accompanying notes to financial statements

13
<PAGE>
MANAGED HIGH YIELD FUND PLUS INC.

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
FOR THE
SIX MONTHS FOR THE PERIOD
ENDED JUNE 26, 1998+
NOVEMBER 30, 1999 THROUGH
(UNAUDITED) MAY 31, 1999
-------------------- --------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income................... $ 24,064,074 $ 44,144,492
Net realized loss from investment
transactions.......................... (18,814,575) (33,656,355)
Net change in unrealized
appreciation/depreciation of
investments and interest rate swap.... (3,008,791) (53,516,947)
------------ ------------
Net increase (decrease) in net assets
resulting from operations............. 2,240,708 (43,028,810)
------------ ------------

DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income................... (23,828,475) (38,535,123)
------------ ------------

COMMON STOCK TRANSACTIONS:
Net proceeds from the sale of shares.... -- 460,575,000
Proceeds from dividends reinvested...... 4,519,779 9,817,675
------------ ------------
Net increase in net assets from capital
stock transactions.................... 4,519,779 470,392,675
------------ ------------
Net increase (decrease) in net assets... (17,067,988) 388,828,742

NET ASSETS:
Beginning of period..................... 388,928,762 100,020
------------ ------------
End of period (including undistributed
net investment income of $5,858,830
and $5,623,231, respectively)......... $371,860,774 $388,928,762
============ ============
</TABLE>

- ---------------

+ Commencement of operations

See accompanying notes to financial statements

14
<PAGE>
MANAGED HIGH YIELD PLUS FUND INC.

STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
FOR THE
SIX MONTHS
ENDED
NOVEMBER 30, 1999
(UNAUDITED)
-----------------
<S> <C>
CASH FLOWS PROVIDED FROM OPERATING ACTIVITIES:
Interest received................................. $ 24,937,632
Operating expenses paid........................... (2,162,396)
Interest paid..................................... (4,206,486)
Sale of short-term portfolio investments, net..... 4,413,000
Purchase of long-term portfolio investments....... (168,761,592)
Sale of long-term portfolio investments........... 160,072,979
-------------
Net cash provided from operating activities....... 14,293,137
-------------

CASH FLOWS USED FOR FINANCING ACTIVITIES:
Dividends paid to shareholders.................... (23,828,475)
Proceeds from bank loan........................... 5,000,000
Proceeds from capital stock transactions.......... 4,519,779
-------------
Net cash used for financing activities............ (14,308,696)
-------------
Net decrease in cash.............................. (15,559)
Cash at beginning of period....................... 68,346
-------------
Cash at end of period............................. $ 52,787
=============

RECONCILIATION OF NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS TO NET CASH USED FOR OPERATING ACTIVITIES:
Net increase in net assets resulting from
operations...................................... $ 2,240,708
-------------
Decrease in investments, at value................. 14,835,443
Decrease in receivable for investments sold....... 6,492,440
Increase in interest receivable................... (152)
Increase in receivable for interest rate swap..... (3,083)
Increase in unrealized appreciation on interest
rate swap....................................... (134,952)
Decrease in other assets.......................... 51,148
Decrease in payable for investments purchased..... (9,280,007)
Increase in payable for interest on bank loan..... 67,060
Decrease in payable to investment adviser and
administrator................................... (30,425)
Decrease in payable for interest rate swap........ (21,354)
Increase in accrued expenses & other
liabilities..................................... 76,311
-------------
Total adjustments................................. 12,052,429
-------------
Net cash used for operating activities............ $ 14,293,137
=============
</TABLE>

See accompanying notes to financial statements

15
<PAGE>
NOTES TO FINANCIAL STATEMENTS(UNAUDITED)

ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Managed High Yield Plus Fund Inc. (the "Fund") was incorporated in Maryland on
April 24, 1998 and is registered with the Securities and Exchange Commission
under the Investment Company Act of 1940, as amended, as a closed-end,
diversified management investment company. The Fund's primary investment
objective is to seek high income. Its secondary objective is to seek capital
appreciation. Direct expenses of $1,071,662 relating to the public offering of
the Fund's shares were paid by PaineWebber Incorporated ("PaineWebber") at the
time of issuance.

The preparation of financial statements in accordance with generally accepted
accounting principles requires Fund management to make estimates and assumptions
that affect the reported amounts and disclosures in the financial statements.
Actual results could differ from those estimates. The following is a summary of
significant accounting policies:

VALUATION OF INVESTMENTS--The Fund calculates its net asset value based on the
current market value for its portfolio securities. The Fund normally obtains
market values for its securities from independent pricing sources and broker-
dealers. Independent pricing sources use last reported sale prices, current
market quotations or valuations from computerized "matrix" systems that derive
values based on comparable securities. Securities traded in the over-the-
counter ("OTC") market and listed on The Nasdaq Stock Market, Inc. ("Nasdaq")
normally are valued at the last sale price on Nasdaq prior to valuation. Other
OTC securities are valued at the last bid price available prior to valuation.
Securities which are listed on U.S. and foreign stock exchanges normally are
valued at the last sale price on the day the securities are valued or, lacking
any sales on such day, at the last available bid price. In cases where
securities are traded on more than one exchange, the securities are valued on
the exchange designated as the primary market by Mitchell Hutchins Asset
Management Inc. ("Mitchell Hutchins"), a wholly owned asset management
subsidiary of PaineWebber Incorporated ("PaineWebber") and investment adviser
and administrator of the Fund. If a market value is not available from an
independent pricing source for a particular security, that security is valued at
fair value as determined in good faith by or under the direction of the Fund's
board of directors (the "board"). The amortized cost method of valuation, which
approximates market value, generally is used to value short-term debt
instruments with sixty days or less remaining to maturity, unless the board
determines that this does not represent fair value. All investments quoted in
foreign currencies will be valued daily in U.S. dollars on the basis of the
foreign currency exchange rates prevailing at the time such valuation is
determined by the Fund's custodian.

REPURCHASE AGREEMENTS--The Fund's custodian takes possession of the collateral
pledged for investments in repurchase agreements. The underlying collateral is
valued daily on a mark-to-market basis to ensure that the value, including
accrued interest, is at least equal to the repurchase price. In the event of
default of the obligation to repurchase, the Fund has the right to liquidate the
collateral and apply the proceeds in satisfaction of the obligation. Under
certain circumstances, in the event of default or bankruptcy by the other party
to the agreement, realization and/ or retention of the collateral may be subject
to legal proceedings. The Fund occasionally participates in joint repurchase
agreement transactions with other funds managed by Mitchell Hutchins.

INVESTMENT TRANSACTIONS AND INVESTMENT INCOME--Investment transactions are
recorded on the trade date. Realized gains and losses from investment
transactions are calculated using the identified cost method. Interest income is
recorded on an accrual basis. Discounts are accreted and premiums are amortized
as adjustments to interest income and the identified cost of investments.

16
<PAGE>
NOTES TO FINANCIAL STATEMENTS(UNAUDITED)

DIVIDENDS AND DISTRIBUTIONS--Dividends and distributions to stockholders are
recorded on the ex-dividend date. Dividends from net investment income and
distributions from net realized capital gains are determined in accordance with
federal income tax regulations which may differ from generally accepted
accounting principles. These "book/tax" differences are either considered
temporary or permanent in nature. To the extent these differences are permanent
in nature, such amounts are reclassified within the capital accounts based on
their federal tax-basis treatment; temporary differences do not require
reclassification.

BORROWINGS

The Fund has a $200 million dollar committed credit facility ("facility").
Under the terms of the facility, the Fund borrows at the London Interbank
Overnight Rate ("LIBOR") plus facility and administrative fees. In addition, the
Fund pays a liquidity fee on the unused portion of the facility. The Fund may
borrow up to 33 1/3% of its total assets up to the committed amount. In
accordance with the terms of the debt agreement, the Fund has pledged assets in
the amount of $387,407,690 at November 30, 1999 as collateral for the bank loan.

For the six months ended November 30, 1999, the Fund borrowed a daily weighted
average balance of $142,945,355 at an interest rate of 5.63%.

INTEREST RATE SWAP AGREEMENT

The Fund entered into an interest rate swap to protect itself from interest
rate fluctuations on a portion of its borrowings. A swap is an agreement that
obligates two parties to exchange a series of cash flows at specified intervals
based upon or calculated by reference to interest rates for a specified amount.
The payment flows are usually netted against each other, with the difference
being paid by one party to the other.

Risks may arise as a result of the failure of the counterparty to the swap
contract to comply with the terms of the contract. The loss incurred by the
failure of a counterparty is generally limited to the net interest payment to be
received by the Fund. Therefore, the Fund considers the creditworthiness of the
counterparty to a swap contract in evaluating potential credit risk.

The Fund records a net receivable or payable on a daily basis for the net
interest income or expense expected to be received or paid in the interest
period. Net interest received or paid on these contracts is recorded as interest
income (or as an offset to interest income). Fluctuations in the value of swap
contracts are recorded for financial statement purposes as unrealized
appreciation or depreciation of investments.

At November 30, 1999, the Fund had an outstanding interest rate swap contract
with the following terms:

<TABLE>
<CAPTION>
RATE TYPE
---------
NOTIONAL TERMINATION PAYMENTS MADE PAYMENTS RECEIVED UNREALIZED
AMOUNT DATE BY THE FUND BY THE FUND APPRECIATION
-------- ----------- ------------- ----------------- ------------
<S> <C> <C> <C> <C>
$20,000,000 3/16/01 5.5125% 5.5100%+ $218,383
</TABLE>

- -------------

+ Rate based on LIBOR (London Interbank Offered Rate).

CONCENTRATION OF RISK
The ability of the issuers of the debt securities held by the Fund to meet
their obligations may be affected by economic developments, including those
particular to a specific industry, country or region. In addition, the Fund's
use of leverage creates greater volatility in the Fund's net asset value and
market price of its Shares.

17
<PAGE>
NOTES TO FINANCIAL STATEMENTS(UNAUDITED)

INVESTMENT ADVISER AND ADMINISTRATOR
The Fund has entered into an Investment Advisory and Administration Contract
("Advisory Contract") with Mitchell Hutchins, under which Mitchell Hutchins
serves as investment adviser and administrator of the Fund. The Advisory
Contract provides Mitchell Hutchins with a fee, computed weekly and payable
monthly, in an amount equal to the annual rate of 0.70% of the Fund's average
weekly total assets minus liabilities other than the aggregate indebtedness
constituting leverage.

INVESTMENTS IN SECURITIES
For federal income tax purposes, the cost of securities owned at November 30,
1999 was substantially the same as the cost of securities for financial
statement purposes.
At November 30, 1999, the components of the net unrealized depreciation of
investments were as follows:

<TABLE>
<S> <C>
Gross depreciation (investments having an excess of cost
over value)............................................... $(69,185,077)
Gross appreciation (investments having an excess of value
over cost)................................................ 12,440,956
------------
Net unrealized depreciation of investments.................. $(56,744,121)
============
</TABLE>

For the six months ended November 30, 1999, aggregate purchases and sales of
portfolio securities, excluding short-term securities, were $159,481,585 and
$153,580,539, respectively.

FEDERAL TAX STATUS
The Fund intends to distribute all of its taxable income and to comply with
the other requirements of the Internal Revenue Code applicable to regulated
investment companies. Accordingly, no provision for federal income taxes is
required. In addition, by distributing during each calendar year substantially
all of its net investment income, capital gains and certain other amounts, if
any, the Fund intends not to be subject to a federal excise tax.
At November 30, 1999, the Fund had a net capital loss carryover of $9,728,324
that will expire by May 31, 2007. This loss carryforward is available as a
reduction, to the extent provided in the regulations, of future net realized
capital gains. To the extent that such losses are used to offset future net
realized capital gains, it is probable these gains will not be distributed. In
accordance with U.S. Treasury regulations, the Fund has elected to defer
$23,622,273 of net realized capital losses arising after October 31, 1998. Such
losses are treated for tax purposes as arising on June 1, 1999.

CAPITAL STOCK

There are 200,000,000 shares of $0.001 par value common stock authorized. Of
the 31,858,628 shares of common stock outstanding, 7,754 shares are owned by
Mitchell Hutchins.
Transactions in shares of common stock were as follows:

<TABLE>
<CAPTION>
SHARES AMOUNT
----------- ------------
<S> <C> <C>
Six Months Ended November 30, 1999
Dividends reinvested................................. 369,345 $ 4,519,779
=========== ============
Period June 26, 1998 through May 31, 1999
Shares issued........................................ 30,705,000 $460,575,000
Dividends reinvested................................. 777,615 9,817,675
----------- ------------
Net increase......................................... 31,482,615 $470,392,675
=========== ============
</TABLE>

18
<PAGE>
MANAGED HIGH YIELD PLUS FUND INC.

FINANCIAL HIGHLIGHTS
Selected data for a share of common stock outstanding throughout each period is
presented below:

<TABLE>
<CAPTION>
FOR THE
SIX MONTHS FOR THE PERIOD
ENDED JUNE 26, 1998+
NOVEMBER 30, 1999 THROUGH
(UNAUDITED) MAY 31, 1999
------------------ --------------
<S> <C> <C>
Net asset value, beginning of period........................ $ 12.35 $ 15.00
---------- ----------
Net investment income....................................... 0.76 1.42
Net realized and unrealized loss on investments............. (0.69) (2.83)
---------- ----------
Net increase (decrease) from investment operations.......... 0.07 (1.41)
---------- ----------
Dividends from net investment income........................ (0.75) (1.24)
---------- ----------
Net asset value, end of period.............................. $ 11.67 $ 12.35
========== ==========
Market value, end of period................................. $ 10.69 $ 12.31
========== ==========
Total investment return (1)................................. (7.40)% (9.37)%
========== ==========
Ratios/Supplemental Data:
Net assets, end of period (000's)........................... $ 371,861 $ 388,929
Expenses to average net assets**............................ 3.44%* 3.02%*
Net investment income to average net assets................. 12.72%* 11.82%*
Portfolio turnover rate..................................... 30% 52%
Asset coverage++............................................ $ 3,479 $ 3,682
</TABLE>

- ---------------

+ Commencement of operations

++ Per $1,000 of bank loans outstanding

* Annualized

** This ratio includes 2.25% and 1.87% related to interest expense for the six
months ended November 30, 1999 and for the period June 26, 1998 through
May 31, 1999, respectively which represents the cost of leverage to the
Fund.

(1) Total investment return is calculated assuming a purchase of capital stock
at market value on the first day of the period reported and a sale at
market value on the last day of the period reported and assuming
reinvestment of dividends at prices obtained under the Fund's Dividend
Reinvestment Plan. Total investment return does not reflect brokerage
commissions and has not been annualized.

19
<PAGE>
MANAGED HIGH YIELD PLUS FUND INC.

GENERAL INFORMATION(UNAUDITED)

THE FUND

Managed High Yield Plus Fund Inc. (the "Fund") is a diversified, closed-end
management investment company whose shares trade on the New York Stock Exchange,
Inc. ("NYSE"). The Fund's primary investment objective is to seek high income.
Its secondary objective is to seek capital appreciation. The Fund's investment
adviser and administrator is Mitchell Hutchins Asset Management Inc. ("Mitchell
Hutchins"), a wholly-owned asset management subsidiary of PaineWebber
Incorporated ("PaineWebber"), which has over $66 billion in assets under
management as of December 31, 1999.

SHAREHOLDER INFORMATION

The NYSE ticker symbol for the Managed High Yield Plus Fund Inc. is "HYF."
Weekly comparative net asset value and market price information about the Fund
is published each Monday in THE WALL STREET JOURNAL, each Sunday in THE NEW YORK
TIMES and each week in BARRON'S, as well as in numerous other newspapers.

An annual meeting of shareholders of the Fund was held on September 16, 1999.
At the meeting, Margo N. Alexander, Richard Q. Armstrong, E. Garrett Bewkes,
Jr., Richard R. Burt, Mary C. Farrell, Meyer Feldberg, George W. Gowen, Frederic
V. Malek, Carl W. Schafer and Brian M. Storms were elected to serve as directors
until the next annual meeting of shareholders, or until their successors are
elected and qualified; and Ernst & Young LLP was ratified as independent
accountants for the Fund for the fiscal year ending May 31, 2000.

PROPOSAL 1

To vote for or against the election of:

<TABLE>
<CAPTION>
SHARES FOR VOTED SHARES WITHHELD AUTHORITY
---------------- -------------------------
<S> <C> <C>
Margo N. Alexander...................... 30,913,279.944 342,826.000
Richard Q. Armstrong.................... 30,928,374.944 327,731.000
E. Garrett Bewkes, Jr................... 30,912,289.944 343,816.000
Richard R. Burt......................... 30,926,376.944 329,729.000
Mary C. Farrell......................... 30,927,490.944 328,615.000
Meyer Feldberg.......................... 30,928,980.944 327,125.000
George W. Gowen......................... 30,925,787.185 330,318.759
Frederic V. Malek....................... 30,919,230.944 336,875.000
Carl W. Schafer......................... 30,926,505.944 329,600.000
Brian M. Storms......................... 30,922,977.944 333,128.000
</TABLE>

PROPOSAL 2

<TABLE>
<CAPTION>
SHARES FOR VOTED SHARES AGAINST SHARES ABSTAIN
---------------- -------------- --------------
<S> <C> <C> <C>
Ratification of the selection of Ernst & Young LLP as the
independent auditors of the Fund for the fiscal year ending
May 31, 2000............................................... 30,959,908.944 119,766.000 176,431.000
</TABLE>

20
<PAGE>
MANAGED HIGH YIELD PLUS FUND INC.

GENERAL INFORMATION(UNAUDITED)(CONTINUED)

YEAR 2000 RISKS

Like other funds and financial and business organizations around the world,
the Fund could be adversely affected if the computer systems used by its
investment adviser, other service providers and entities with computer systems
that are linked to Fund records do not properly process and calculate
date-related information and data from and after January 1, 2000. This is
commonly known as the "Year 2000 Issue."

Mitchell Hutchins is taking steps that it believes are reasonably designed to
address the Year 2000 Issue with respect to the computer systems that it uses,
and to obtain satisfactory assurances that each of the Fund's other major
service providers is taking comparable steps. However, there can be no assurance
that these steps will be sufficient to avoid any adverse impact on the Fund.

In addition, issuers of securities in which the Fund invests may be adversely
affected by Year 2000 related problems. This could have an impact on the value
of the Fund's investments and share price.

DISTRIBUTION POLICY

The fund's board of directors has established a Dividend Reinvestment Plan
(the "Plan") under which all stockholders whose shares are registered in their
own names, or in the name of PaineWebber or its nominee, will have all dividends
and other distributions on their shares of common stock automatically reinvested
in additional shares of common stock, unless such stockholders elect to receive
cash. Stockholders who elect to hold their shares in the name of another broker
or nominee should contact such broker or nominee to determine whether, or how,
they may participate in the Plan. The ability of such stockholders to
participate in the Plan may change if their shares are transferred into the name
of another broker or nominee.

A stockholder may elect not to participate in the Plan or may terminate
participation in the Plan at any time without penalty, and stockholders who have
previously terminated participation in the Plan may rejoin it at any time.
Changes in elections must be made in writing to the Fund's transfer agent and
should include the stockholder's name and address as they appear on that share
certificate or in the transfer agent's records. An election to terminate
participation in the Plan, until such election is changed, will be deemed an
election by a stockholder to take all subsequent distributions in cash. An
election will be effective only for distributions declared and having a record
date at least ten days after the date on which the election is received.

The Transfer Agent will serve as agent for the stockholders in administering
the Plan. After the Fund declares a dividend or determines to make any other
distribution, the Transfer Agent, as agent for the participants, receives the
cash payment. Whenever the Fund declares an income dividend or a capital gain
distribution (collectively referred to in this section as "dividends") payable
either in Shares or in cash, non-participants in the Plan will receive cash and
participants in the Plan will receive the equivalent in Shares. The Transfer
Agent will acquire Shares for the participants' accounts, depending upon the
circumstances described below, either (i) through receipt of unissued but
authorized Shares from the Fund ("newly issued Shares") or (ii) by purchase of
outstanding Shares on the open market, on the NYSE or elsewhere ("open-market
purchases"). If, on the dividend payment date, the net asset value per Share is
equal to or less than the market price per Share plus estimated brokerage
commissions (such condition being referred to herein as "market premium"), the
Transfer Agent will invest the dividend amount in newly issued Shares on behalf
of

21
<PAGE>
MANAGED HIGH YIELD PLUS FUND INC.

GENERAL INFORMATION(UNAUDITED)(CONTINUED)

the participants. The number of newly issued Shares to be credited to each
participant's account will be determined by dividing the dollar amount of the
dividend by the net asset value per Share (but in no event less than 95% of the
then current market price per Share) on the date the Shares are issued. If, on
the dividend payment date, the net asset value per Share is greater than the
market value per Share, plus estimated brokerage commissions (such condition
being referred to herein as "market discount"), the Transfer Agent will invest
the dividend amount in Shares acquired on behalf of the participants in
open-market purchases. The number of outstanding Shares purchased with each
distribution for a particular Shareholder equals the result obtained by dividing
the amount of the distribution payable to that Shareholder by the average price
per Share (including applicable brokerage commissions) that the Transfer Agent
was able to obtain in the open market.

In the event of a market discount on the dividend payment date, the Transfer
Agent will have until the last business day before the next date on which the
Shares trade on an "ex-dividend" basis, but in no event more than 30 days after
the dividend payment date (the "last purchase date"), to invest the dividend
amount in Shares acquired in open-market purchases. It is contemplated that the
Fund will pay monthly income dividends. Therefore, the period during which
open-market purchases can be made will exist only from the payment date of the
dividend through the date before the next "ex-dividend" date, which typically
will be approximately ten days. If, before the Transfer Agent has completed its
open-market purchases, the market price of a Share, plus estimated brokerage
commissions, exceeds the net asset value per Share, the average per Share
purchase price paid by the Transfer Agent may exceed the Fund's net asset value
per Share, resulting in the acquisition of fewer Shares than if the dividend had
been paid in newly issued Shares on the dividend payment date. Because of the
foregoing difficulty with respect to open-market purchases, the Plan provides
that, if the Transfer Agent is unable to invest the full dividend amount in
open-market purchases during the purchase period or if the market discount
shifts to a market premium during the purchase period, the Transfer Agent will
cease making open-market purchases and will invest the uninvested portion of the
dividend amount in newly issued Shares at the close of business on the earlier
of the last purchase date or the first day during the purchase period on which
the net asset value per Share equals or is less than the market price per Share,
plus estimated brokerage commissions. The Transfer Agent will maintain all
Shareholder accounts in the Plan and will furnish written confirmations of all
transactions in the accounts, including information needed by Shareholders for
personal and tax records. Shares in the account of each Plan participant will be
held by the Transfer Agent in non-certificated form in the name of the
participant, and each Shareholder's proxy will include those Shares purchased
pursuant to the Plan.
There will be no charge to participants for reinvesting dividends. However, each
participant will pay a pro rata share of brokerage commissions incurred with
respect to the Transfer Agent's open market purchases of Shares in connection
with the reinvestment of dividends.

The automatic reinvestment of dividends in Shares will not relieve
participants of any income tax that may be payable on such dividends.

Shareholders who participate in the Plan may receive benefits not available to
Shareholders who do not participate in the Plan. If the market price (plus
commissions) of the Shares is above their net asset value, participants in the
Plan will receive Shares at less than they could otherwise purchase them and
will have Shares with a cash value greater than the value of any cash dividends
they would have received on their Shares. If the market price plus commissions
is below

22
<PAGE>
MANAGED HIGH YIELD PLUS FUND INC.

GENERAL INFORMATION(UNAUDITED)(CONCLUDED)

the net asset value, participants will receive dividends in Shares with a net
asset value greater than the value of any cash dividends they would have
received on their Shares. However, there may be insufficient Shares available in
the market to distribute dividends in Shares at prices below the net asset
value. Also, since the Fund does not redeem its Shares, the price on resale may
be more or less than the net asset value.

Experience under the Plan may indicate that changes are desirable.
Accordingly, the Fund reserves the right to amend or terminate the Plan with
respect to any dividend or other distribution if notice of the change is sent to
Plan participants at least 30 days before the record date for such distribution.
The Plan also may be amended or terminated by the transfer agent by at least 30
days' written notice to all Plan participants. Additional information regarding
the Plan may be obtained from, and all correspondence concerning the Plan should
be directed to, the transfer agent at PFPC Inc., P.O. Box 8950, Wilmington,
Delaware 19899.

23
<PAGE>

DIRECTORS
E. Garrett Bewkes, Jr.
CHAIRMAN
Margo N. Alexander
Richard Q. Armstrong
Richard R. Burt
Mary C. Farrell

Meyer Feldberg
George W. Gowen
Frederic V. Malek
Carl W. Schafer
Brian M. Storms

PRINCIPAL OFFICERS
Margo N. Alexander
PRESIDENT
Victoria E. Schonfeld
VICE PRESIDENT
Dianne E. O'Donnell
VICE PRESIDENT AND SECRETARY

Paul H. Schubert
VICE PRESIDENT AND TREASURER
Thomas J. Libassi
VICE PRESIDENT
Dennis McCauley
VICE PRESIDENT

INVESTMENT ADVISER AND ADMINISTRATOR
Mitchell Hutchins Asset Management Inc.
51 West 52nd Street
New York, New York 10019

NOTICE IS HEREBY GIVEN IN ACCORDANCE WITH SECTION 23(c) OF THE INVESTMENT
COMPANY ACT OF 1940 THAT FROM TIME TO TIME THE FUND MAY PURCHASE SHARES OF
ITS COMMON STOCK IN THE OPEN MARKET AT MARKET PRICES.

THE FINANCIAL INFORMATION HEREIN IS TAKEN FROM THE RECORDS OF THE FUND
WITHOUT EXAMINATION BY INDEPENDENT AUDITORS WHO DO NOT EXPRESS AN OPINION
THEREON.

THIS REPORT IS SENT TO THE SHAREHOLDERS OF THE FUND FOR THEIR INFORMATION. IT
IS NOT A PROSPECTUS, CIRCULAR OR REPRESENTATION INTENDED FOR THE USE IN THE
PURCHASE OR SALES OF SHARES OF THE FUND OR OF ANY SECURITIES MENTIONED IN
THIS REPORT.

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MANAGED HIGH

YIELD PLUS FUND INC.

SEMIANNUAL REPORT

NOVEMBER 30, 1999