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AMERICAN GENERAL SERIES PORTFOLIO COMPANY 3
SUPPLEMENT ISSUED JANUARY 20, 1999
TO PROSPECTUS DATED SEPTEMBER 21, 1998
On January 19, 1999, the Board of Trustees of the Series Company approved
certain changes to the Funds' investment restrictions with respect to illiquid
and restricted securities. Specifically, the section entitled "Illiquid and
Restricted Securities" under "Types of Investments" is re-titled and replaced in
its entirety with the following:
ILLIQUID SECURITIES
An illiquid security is one that may not be frequently traded or cannot be
disposed of promptly within seven days and in the usual course of business
without taking a materially reduced price. Illiquid securities include, but
are not limited to, time deposits and repurchase agreements not maturing
within seven days and restricted securities.
A restricted security is one that has not been registered with the SEC and,
therefore, cannot be sold in the public market. Securities eligible for
sale under Rule 144A and commercial paper offered pursuant to Section 4(2)
of the Securities Act of 1933, as amended, are not deemed by VALIC or the
Sub-adviser to be illiquid solely by reason of being restricted. Instead,
VALIC or the Sub-adviser will determine whether such securities are liquid
based on trading markets and pursuant to guidelines adopted by the Series
Company's Board of Trustees. If VALIC or the Sub-adviser concludes that a
security is not liquid, that investment will be included within the Fund's
limitation on illiquid securities.
All the Funds, except the Lifestyle Funds, may buy illiquid securities, but
are restricted as to how much money they may invest in them.
The related sidebar should only reference illiquid securities.
In the "Fact Sheets" for the LARGE CAP VALUE FUND, MID CAP VALUE FUND, SOCIALLY
RESPONSIBLE FUND, AND MONEY MARKET FUND, please disregard all references to
restricted securities under "Investment Strategy." The stated limit should refer
to illiquid securities only.
VA10832-C
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AMERICAN GENERAL SERIES PORTFOLIO COMPANY 3
SUPPLEMENT ISSUED JANUARY 20, 1999
TO STATEMENT OF ADDITIONAL INFORMATION DATED SEPTEMBER 21, 1998
For the INTERNATIONAL GROWTH FUND, THE LARGE CAP GROWTH FUND, THE SMALL CAP
GROWTH FUND, THE INTERNATIONAL VALUE FUND, THE LARGE CAP VALUE FUND, THE MID CAP
VALUE FUND, THE SMALL CAP VALUE FUND, THE BALANCED FUND, THE HIGH YIELD BOND
FUND, THE STRATEGIC BOND FUND, THE CORE BOND FUND, AND THE DOMESTIC BOND FUND
the non-fundamental investment restriction regarding illiquid securities is
replaced in its entirety with the following:
The Fund may not invest more than 15% of the Fund's net assets (taken
at the greater of cost or market value) in securities that are illiquid
or not readily marketable including time deposits and repurchase
agreements not maturing within seven days or restricted securities, but
excluding (a) Rule 144A securities that have been determined to be
liquid by VALIC or the Sub-adviser, in accordance with guidelines
adopted by the Series Company's Board of Trustees, and (b) commercial
paper that is sold under Section 4(2) of the 1933 Act which: (i) is not
traded flat or in default as to interest or principal; (ii) is rated in
one of the two highest categories by at least two nationally recognized
statistical rating organizations and VALIC or the Sub-adviser, in
accordance with guidelines adopted by the Series Company's Board of
Trustees, has determined the commercial paper to be liquid; or (iii) is
rated in one of the two highest categories by one nationally recognized
statistical rating agency and VALIC or the Sub-adviser, in accordance
with guidelines adopted by the Series Company's Board of Trustees, has
determined that the commercial paper is of equivalent quality and is
liquid.
For the MID CAP GROWTH FUND, SOCIALLY RESPONSIBLE FUND, AND MONEY MARKET FUND
the non-fundamental investment restriction regarding illiquid securities is
replaced in its entirety with the following:
The Fund may not invest more than 10% of the Fund's net assets (taken
at the greater of cost or market value) in securities that are illiquid
or not readily marketable including time deposits and repurchase
agreements not maturing within seven days or restricted securities, but
excluding (a) Rule 144A securities that have been determined to be
liquid by VALIC or the Sub-adviser, in accordance with guidelines
adopted by the Series Company's Board of Trustees, and (b) commercial
paper that is sold under Section 4(2) of the 1933 Act which: (i) is not
traded flat or in default as to interest or principal; (ii) is rated in
one of the two highest categories by at least two nationally recognized
statistical rating organizations and VALIC or the Sub-adviser, in
accordance with guidelines adopted by the Series Company's Board of
Trustees, has determined the commercial paper to be liquid; or (iii) is
rated in one of the two highest categories by one nationally recognized
statistical rating agency and VALIC or the Sub-adviser, in accordance
with guidelines adopted by the Series Company's Board of Trustees, has
determined that the commercial paper is of equivalent quality and is
liquid.
VA 10832-1A
