LOGO: NUVEEN Exchange-Traded Funds
Nuveen Senior Income Fund
NSL
January 31, 2000
SEMIANNUAL REPORT
HIGH CURRENT INCOME FROM A PORTFOLIO OF SENIOR, SECURED CORPORATE LOANS
<PAGE>
Financial Information
As of January 31, 2000
TOP SENIOR LOAN HOLDINGS
(Based on Total Investments)
Huntsman ICI Chemicals LLC 3.7%
Fairchild Corp. 3.6%
Quest Diagnostics, Inc. 3.5%
Bridge Information Systems, Inc. 3.4%
Lyondell Chemical Co. 2.5%
TOP FIVE INDUSTRIES
(Based on Total Investments)
Telecommunications/Cellular/PCS 8.3%
Chemicals, Plastics and Rubber 6.2%
Finance 5.0%
Telecommunications/CLEC 4.9%
Beverage, Food and Tobacco 4.7%
CONTENTS
1 Dear Shareholder
3 Portfolio Manager's Comments
5 Portfolio of Investments
9 Statement of Net Assets
9 Statement of Operations
10 Statement of Changes in Net Assets
10 Statement of Cash Flows
11 Notes to Financial Statements
14 Financial Highlights
16 Build Your Wealth Automatically
17 Fund Information
<PAGE>
Photo of: Timothy R. Schwertfeger Chairman of the Board
Sidebar text: Wealth takes a lifetime to build. Once achieved, it should be
preserved.
Dear Shareholder
It is my pleasure to report to you on the performance of the Nuveen Senior
Income Fund (NSL). Since its inception, NSL has performed very well, surpassing
the dividend amount that was anticipated before the first dividend was declared.
In fact, NSL just increased its dividend, raising it to $0.0785 from $0.076 per
share. This increase was the result of NSL's design, which allows the Fund to
adjust its dividend to keep pace with current interest rates. (EDITOR'S NOTE:
NSL raised its dividend again on March 1, 2000, increasing it to $.082 per
share.)
The Fed increased interest rates again on February 2, 2000, after NSL's dividend
increase. The federal funds rate now stands at 5.75%, and with many economic
forecasts calling for additional interest rate increases throughout 2000, NSL
remains poised to try and take advantage of a rising interest rate environment
for the benefit of shareholders seeking attractive current income.
A CHALLENGING INVESTMENT ENVIRONMENT
1999 was an interesting year, as the U.S. economy enjoyed its ninth consecutive
year of continuous expansion, character ized by surprisingly robust growth,
benign inflation, and unemployment levels that remained among the lowest in
three decades. However, concerns about the persistent pace of economic expansion
continued to test the new paradigm, which holds that the improvements in
productivity achieved through technology enable us to have both economic growth
and low inflation at the same time.
As investors watched and reacted to each announcement concerning economic
statistics, volatility increased, especially in the equity markets, and the
specter of inflation seemed to lurk behind every report. Especially worrisome to
the Federal Reserve was the possibility that tight labor markets would
eventually have an inflationary effect on wages and, consequently, on consumer
prices.
To combat this threat of inflation, the Fed raised interest rates three times in
1999 and, as noted, once early in 2000. Many believe the Fed may raise rates at
least that many times during the course of 2000, given the appointment of
several new Fed members considered to be "hawkish" on fighting inflation.
NSL: A POTENTIAL ANSWER TO YOUR INVESTMENT NEEDS
By investing in senior loans, NSL offers shareholders high current income and
diversification within a highly specified asset class. Additionally, because the
<PAGE>
Fund's dividends can adjust with move ments in market interest rates, the Fund's
dividends should change in the same direc tion as interest rates change.
Therefore, much of the interest rate risk normally associated with fixed-income
investing should be reduced.
As shown below, senior loans similar to those held by NSL generally have paid
higher income than other short-term investments.
Line Chart:
SENIOR LOANS HAVE PRODUCED HIGHER YIELDS
THAN CERTAIN OTHER INVESTMENT ALTERNATIVES
3-Month Yield T-Bill 3-Month Yield LIBOR Senior Loans
3.94 4.19 5.69
4.02 4.25 5.75
4.14 4.31 5.81
3.77 4.06 5.56
3.77 4.06 5.56
3.65 3.94 5.44
3.24 3.44 4.94
3.22 3.5 5
2.74 3.13 4.63
3.01 3.56 5.06
3.34 4 5.5
3.14 3.44 4.94
2.97 3.31 4.81
3 3.19 4.69
2.96 3.25 4.75
2.96 3.19 4.69
3.11 3.38 4.88
3.08 3.31 4.81
3.1 3.31 4.81
3.07 3.25 4.75
2.98 3.38 4.88
3.1 3.44 4.94
3.32 3.5 5
3.06 3.38 4.88
3.03 3.25 4.75
3.43 3.75 5.25
3.55 3.94 5.44
3.95 4.31 5.81
4.24 4.63 6.13
4.22 4.88 6.38
4.36 4.88 6.38
4.66 5 6.5
4.77 5.5 7
5.15 5.63 7.13
5.71 6.19 7.69
5.69 6.5 8
6 6.31 7.81
5.94 6.25 7.75
5.87 6.25 7.75
5.86 6.19 7.69
5.8 6.06 7.56
5.57 6.06 7.56
5.58 5.88 7.38
5.45 5.88 7.38
5.41 5.95 7.45
5.51 5.94 7.44
5.49 5.88 7.38
5.08 5.63 7.13
5.05 5.38 6.88
5.03 5.3 6.8
5.14 5.47 6.97
5.15 5.48 6.98
5.18 5.5 7
5.16 5.58 7.08
5.31 5.68 7.18
5.28 5.56 7.06
5.03 5.63 7.13
5.15 5.5 7
5.13 5.5 7
5.17 5.56 7.06
5.15 5.56 7.06
5.22 5.54 7.04
5.32 5.77 7.27
5.23 5.82 7.32
4.94 5.81 7.31
5.17 5.78 7.28
5.23 5.71 7.21
5.22 5.72 7.22
5.1 5.77 7.27
5.2 5.75 7.25
5.2 5.9 7.4
5.35 5.81 7.31
5.18 5.63 7.13
5.31 5.68 7.18
5.12 5.71 7.21
4.97 5.72 7.22
5.01 5.69 7.19
5.08 5.69 7.19
5.07 5.69 7.19
4.83 5.63 7.13
4.36 5.31 6.81
4.32 5.22 6.72
4.48 5.28 6.78
4.45 5.07 6.57
4.45 4.97 6.47
4.67 5.03 6.53
4.48 5 6.5
4.54 4.99 6.49
4.63 5.07 6.57
4.78 5.37 6.87
4.75 5.34 6.84
4.97 5.52 7.02
4.85 6.08 7.58
5.09 6.19 7.69
5.3 6.12 7.62
5.33 6 7.5
5.69 6.08 7.58
The Senior Loans Yield represents the 3-month LIBOR yield plus 150 basis points.
Given that NSL has been trading since October, please keep in mind the fact that
the performance for very short time periods should not be the sole factor in
making your investment decision. There are additional risks associated with
senior loans, including credit risks as well as the possibility that short-term
rates will fall and the Fund's dividend may be less than anticipated.
LEAVING YOUR MARK
As we embark on the new millennium, it is important to take note of where we
have been, where we would like to go, and how we can leave our mark for the
future. Since our inception in 1898, Nuveen has been synonymous with municipal
bond invest ments, which have been the cornerstone of our business. As part of
our evolution, we have spread our corporate wings to complement our municipal
bond business with other investment vehicles designed to provide diversification
for our share holders. One of the ways we have started on this path is through
the issuance of the Nuveen Senior Income Fund, which is an exciting and distinct
type of investment.
Nuveen's ultimate goal is to change the way people think about wealth and to
have an impact on the way you and your adviser currently view money and
investing. We appreciate the choice you made in pur chasing this fund and remain
committed to finding the best ways to serve your evolving investment needs.
Sincerely,
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
February 16, 2000
<PAGE>
Nuveen Senior Income Fund
PORTFOLIO MANAGER'S COMMENTS
Executive Managing Director Jeffrey Maillet leads the Nuveen Senior Income
Fund's management team. A pioneer in the field, Jeff, who joined Nuveen in 1999,
has managed senior floating rate loan products since the market's beginnings
almost 20 years ago. He most recently managed more than $13 billion in this
asset class before creating Nuveen's senior loan investment team. In total, he
has purchased more than 2,000 senior bank issues totaling $28 billion.
Jeff recently discussed the performance of the Nuveen Senior Income Fund (NSL)
and the senior loan market.
WHAT WAS THE BIGGEST FACTOR THAT AFFECTED BOTH THE SENIOR LOAN MARKET AND NSL
SINCE OCTOBER, WHEN THE FUND WAS LAUNCHED?
An increase in interest rates was the biggest factor that affected the senior
loan market and NSL. The Federal Reserve raised rates for a third time in 1999,
shortly after NSL's inception in October. (EDITOR'S NOTE: the Fed raised rates
again on February 2, 2000.) Given that the Fund's dividend is intended to rise
and fall in correlation with changes in short-term interest rates, steady
increases in those rates can potentially lead to higher dividends for
shareholders. Highlighting this is the fact that our first dividend declaration
was higher than anticipated. If the Fed continues to increase interest rates,
owning a senior loan fund could be beneficial due to its defensive nature. We
were able to find good prices in the senior loan market near the end of 1999 due
to the uncertainty surrounding Y2K issues, which also contributed to a higher
than expected dividend. This uncertainty created a widening of spreads for
senior loans, which allowed us to purchase high yielding loans at attractive
prices.
WHERE WERE YOU ABLE TO FIND THE BEST VALUES?
The telecommunications sector provided considerable opportunities. Companies
like OmniPoint Communications, Inc., which is a pioneer in the area of
developing and integrating advanced wireless communication systems, and Nextel
Partners Operating Co., which is the world's leading provider of fully
integrated guaranteed all-digital wireless services, are two of the Fund's more
notable holdings.
Another area of concentration was the beverage, food and tobacco sector, and
Triarc Consumer Products Group, maker of Snapple Beverages, is represented in
the portfolio because of its strong manage ment team and well-respected brands.
Looking for top-flight companies in their respective fields is one of the key
strategies we use when looking to purchase loans for the Fund. In this regard,
Huntsman ICI Chemicals LLC and Lyondell Chemical Co. were added to the portfolio
because we believe they are at the top of their respective product lines in the
chemicals and plastics field. Huntsman Chemical is a leading global manufacturer
and marketer of a wide variety of commodity and specialty chemicals. Lyondell
Chemical focuses on the production of basic chemicals and polymers that enhance
the quality of other products like automobile parts, home building materials,
and food packaging products.
In addition to searching for companies that have strong management and industry
recognition, another consideration is market share. One company that stands out
is the Scotts Company, which is the world's leading supplier and marketer of
consumer products for individual lawn and garden care. Scott's dominant market
share and strong brand name were important factors that led to its inclusion in
NSL.
WERE THERE ANY AREAS YOU TRIED TO AVOID?
We don't exclude any particular sectors, but one area where we've tried to
limit our
<PAGE>
exposure is healthcare. Recent governmental regulations have led to stress in
that area, which has caused a disturbing number of defaults in the sector,
primarily related to acute care hospitals and skilled nursing homes. As a
result, we have avoided those two areas of the healthcare sector.
WHERE DO SENIOR LOANS FALL IN A TYPICAL CORPORATE CAPITAL STRUCTURE?
At least 80% of the Fund's senior loan invest ments are secured by specific
collateral (i.e. having a first claim on specific assets or cash flow of the
borrower), placing the senior loan in a favored position within the borrower's
capital structure.
GRAPHIC:
Priority Ranking of Typical Corporate Capital Structure
Senior Loans
Senior Subordinated Debt
Junior Subordinated Debt
Preferred Equity
Common Equity
HOW HAS NSL PERFORMED SINCE ITS INCEPTION, OCTOBER 29, 1999, THROUGH JANUARY 31,
2000?
One of the highlights of the Fund's performance since its inception is the fact
that its initial dividend of $0.076 per share was higher than we anticipated
before the declaration date. As of January 31, 2000, NSL's market yield was
9.54%, based on a share price of $9 5/8.
In terms of net asset value (NAV), NSL saw its NAV go up from $9.55 on the first
day of trad ing to $9.59, as of January 31, 2000, despite weakness in the fixed
income market. The main factor contributing to NSL's relative NAV stability is
the frequency of interest rate resets.
NSL invests in loans with variable interest rates, and NAV fluctuations from
market interest rate changes should be minimal. Changes in interest rates
typically affect the price of fixed-income investments but not the income they
produce. Conversely, changes in interest rates affect a senior loan fund's
income potential but only have a minimal NAV impact.
NSL invests in loans whose interest rates reset every 90 days or less. The
frequent rate resets help NSL's dividend adjust with current market conditions,
which means that its dividend should rise when interest rates increase and fall
when interest rates decline.
NSL's since-inception total return on NAV for the period ended January 31, 2000
was 2.02%.
WHAT IS YOUR OUTLOOK FOR NSL?
Our goal for NSL will be to try and take advantage of attractive opportunities
in the senior loan market as a potential way to increase the Fund's income
stream. Our team believes that telecommunications and basic industries (i.e.
manufacturing, chemical) are two sectors of the senior loan market that will be
strong performers over the upcoming year. In addition, we plan to limit our
exposure to the retail sector given the uncertainty surrounding consumer
spending patterns in relation to future potential Federal Reserve interest rate
increases.
With the uncertainty surrounding the Fed's interest rate decisions in 2000, we
view their bias towards more interest rate increases in a favorable way given
that NSL's dividend could potentially benefit from those upward rate
adjustments.
<PAGE>
<TABLE>
Portfolio of Investments
NUVEEN SENIOR INCOME FUND (NSL)
January 31, 2000
(Unaudited)
<CAPTION>
Ratings*
-----------------
Principal Stated Market
Amount (000) Description Moody's S&P Maturity** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
VARIABLE RATE SENIOR LOAN INTERESTS*** - 124.8%
Aerospace/Defense - 5.2%
$ 14,961 Fairchild Corp., Term Loan B Ba3 BB- 04/03/06 $ 14,680,522
- -----------------------------------------------------------------------------------------------------------------------------------
Automotive - 3.5%
9,967 MetalForming Technologies, Inc., Term Loan B NR NR 06/30/06 9,891,917
- -----------------------------------------------------------------------------------------------------------------------------------
Beverage, Food & Tobacco - 6.8%
9,476 American Bottling Company, Inc., Term Loan B NR NR 10/07/07 9,505,863
6,179 Eagle Family Foods Inc., Term Loan B1 B 12/31/05 5,972,619
1,145 Triarc Consumer Products Group, LLP, Term Loan B B1 B+ 03/01/06 1,152,034
2,795 Triarc Consumer Products Group, LLP, Term Loan C B1 B+ 03/01/07 2,810,963
- -----------------------------------------------------------------------------------------------------------------------------------
19,441,479
- -----------------------------------------------------------------------------------------------------------------------------------
Chemicals, Plastics & Rubber - 8.8%
7,500 Huntsman ICI Chemicals LLC, Term Loan B Ba3 BB 06/30/07 7,550,000
7,500 Huntsman ICI Chemicals LLC, Term Loan C Ba3 BB 06/30/08 7,550,000
9,975 Lyondell Chemical Co., Term Loan E Ba3 NR 03/31/06 10,220,090
- -----------------------------------------------------------------------------------------------------------------------------------
25,320,090
- -----------------------------------------------------------------------------------------------------------------------------------
Containers, Packaging & Glass - 1.7%
2,639 Graham Packaging Co., Term Loan B B1 B+ 01/31/06 2,641,629
2,187 Graham Packaging Co., Term Loan C B1 B+ 01/31/07 2,188,778
- -----------------------------------------------------------------------------------------------------------------------------------
4,830,407
- -----------------------------------------------------------------------------------------------------------------------------------
Diversified Manufacturing - 2.4%
6,965 Western Industries Holding Inc., Term Loan B NR NR 06/23/06 6,951,941
- -----------------------------------------------------------------------------------------------------------------------------------
Ecological - 3.8%
4,545 Allied Waste North America, Inc., Term Loan B Ba3 BB 07/21/06 4,406,250
5,455 Allied Waste North America, Inc., Term Loan C Ba3 BB 07/21/07 5,287,500
1,000 Stericycle Inc., Term Loan B B1 BB- 11/10/06 1,003,438
- -----------------------------------------------------------------------------------------------------------------------------------
10,697,188
- -----------------------------------------------------------------------------------------------------------------------------------
Electronic Services - 6.6%
4,815 Semiconductor Components Industries, LLC, Term Loan B NR BB- 08/04/06 4,865,972
5,185 Semiconductor Components Industries, LLC, Term Loan C NR BB- 08/04/07 5,240,278
8,771 Via Systems, Inc., Term Loan B1 B+ 03/31/04 8,536,954
- -----------------------------------------------------------------------------------------------------------------------------------
18,643,204
- -----------------------------------------------------------------------------------------------------------------------------------
Farming & Agricultural - 1.8%
2,496 Scotts Company, Term Loan B Ba3 BB 06/30/06 2,512,676
2,495 Scotts Company, Term Loan C Ba3 BB 06/30/07 2,511,921
- -----------------------------------------------------------------------------------------------------------------------------------
5,024,597
- -----------------------------------------------------------------------------------------------------------------------------------
<PAGE>
Portfolio of Investments (continued)
NUVEEN SENIOR INCOME FUND (NSL)
January 31, 2000
(Unaudited)
<CAPTION>
Ratings*
-----------------
Principal Stated Market
Amount (000) Description Moody's S&P Maturity** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Finance - 7.2%
$ 4,975 Bridge Information Systems, Inc., Term Loan B NR NR 07/07/05 $ 4,688,938
4,987 Bridge Information Systems, Inc., Term Loan B NR NR 07/07/05 4,700,689
4,987 Bridge Information Systems, Inc., Term Loan B NR NR 03/05/06 4,700,689
6,500 Sovereign Bancorp, Inc., Term Loan B Ba2 NR 11/14/03 6,524,375
- -----------------------------------------------------------------------------------------------------------------------------------
20,614,691
- -----------------------------------------------------------------------------------------------------------------------------------
Healthcare - 6.8%
5,000 Lifepoint Hospitals Holdings, Inc., Term Loan B B1 B+ 11/11/05 4,978,125
7,437 Quest Diagnostics, Inc., Term Loan B Ba3 BB 08/16/06 7,476,719
6,865 Quest Diagnostics, Inc., Term Loan C Ba3 BB 08/16/07 6,901,587
- -----------------------------------------------------------------------------------------------------------------------------------
19,356,431
- -----------------------------------------------------------------------------------------------------------------------------------
Home & Office Furnishings/Housewares - 3.3%
10,000 World Kitchen Inc., Term Loan C B1 BB- 04/09/07 9,500,000
- -----------------------------------------------------------------------------------------------------------------------------------
Hotels, Motels, Inns & Gaming - 3.4%
10,000 Wyndham International, Inc., Term Loan B NR NR 06/30/06 9,741,667
- -----------------------------------------------------------------------------------------------------------------------------------
Insurance - 3.5%
5,000 GAB Robins North America, Inc., Term Loan B NR NR 12/01/05 4,981,250
4,950 USI Holdings Corp., Term Loan NR B+ 09/17/04 4,931,438
- -----------------------------------------------------------------------------------------------------------------------------------
9,912,688
- -----------------------------------------------------------------------------------------------------------------------------------
Leisure & Entertainment - 6.7%
4,000 Bally Total Fitness Holding Corp., Term Loan B1 B+ 11/10/04 3,994,167
3,447 Fitness Holdings Worldwide, Inc., Term Loan B NR B+ 11/02/06 3,448,756
6,553 Fitness Holdings Worldwide, Inc., Term Loan C NR B+ 11/02/07 6,557,494
5,000 Six Flags Theme Parks Inc., Term Loan B Ba3 B+ 09/30/05 5,017,188
- -----------------------------------------------------------------------------------------------------------------------------------
19,017,605
- -----------------------------------------------------------------------------------------------------------------------------------
Mining, Steel, Iron & Non-Precious Metals - 1.3%
3,580 ASARCO Inc., Term Loan B1 BB 06/21/01 3,573,459
- -----------------------------------------------------------------------------------------------------------------------------------
Non-Durable Consumer Products - 3.5%
5,283 Norwood Promotional Products, Inc., Term Loan B NR NR 05/31/06 5,302,899
4,706 Norwood Promotional Products, Inc., Term Loan C NR NR 11/30/06 4,723,530
- -----------------------------------------------------------------------------------------------------------------------------------
10,026,429
- -----------------------------------------------------------------------------------------------------------------------------------
Personal & Miscellaneous Services - 1.5%
4,300 Weight Watchers International, Inc.,
Transferable Loan Certificate Ba2 B+ 09/30/06 4,308,063
- -----------------------------------------------------------------------------------------------------------------------------------
Printing & Publishing - 3.0%
7,000 American Media Operations, Inc., Term Loan B-1 Ba3 B+ 04/01/07 7,018,958
1,496 Merrill Corp., Term Loan B B1 BB- 11/23/07 1,504,199
- -----------------------------------------------------------------------------------------------------------------------------------
8,523,157
- -----------------------------------------------------------------------------------------------------------------------------------
Restaurants & Food Service - 3.5%
4,975 Domino's Inc., Term Loan B B1 B+ 12/21/06 4,999,689
4,980 Domino's Inc., Term Loan C B1 B+ 12/21/07 5,004,900
- -----------------------------------------------------------------------------------------------------------------------------------
10,004,589
- -----------------------------------------------------------------------------------------------------------------------------------
<PAGE>
<CAPTION>
Ratings*
-----------------
Principal Stated Market
Amount (000) Description Moody's S&P Maturity** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Retail/Catalog - 1.8%
$ 5,000 Micro Warehouse, Inc., Term Loan B B1 BB- 01/31/07 $ 4,981,250
- -----------------------------------------------------------------------------------------------------------------------------------
Retail/Stores - 3.5%
5,920 HMV Media Group PLC, Term Loan C B1 BB- 03/28/06 5,838,600
4,080 HMV Media Group PLC, Term Loan D B1 BB- 08/28/06 4,023,900
- -----------------------------------------------------------------------------------------------------------------------------------
9,862,500
- -----------------------------------------------------------------------------------------------------------------------------------
Telecommunications/Cellular/PCS - 12.0%
2,108 American Cellular Corp., Term Loan B B2 NR 06/25/07 2,108,129
2,108 American Cellular Corp., Term Loan C B2 NR 12/25/07 2,108,129
10,000 BCP Telecomunicacoes, Term Loan A NR NR 03/31/00 10,025,000
10,000 Centennial Cellular Operating Co. LLC, Term Loan A B1 B+ 11/30/06 10,020,833
5,000 Omnipoint Communications Inc., Term Loan A B2 NR 03/31/08 4,996,875
4,992 Omnipoint Communications Inc., Term Loan C B2 NR 02/17/06 5,013,046
- -----------------------------------------------------------------------------------------------------------------------------------
34,272,012
- -----------------------------------------------------------------------------------------------------------------------------------
Telecommunications/CLEC - 7.1%
10,000 Level 3 Communications, LLC, Term Loan B B1 B+ 01/15/08 10,064,583
5,000 RCN Corp., Term Loan B B1 B+ 06/03/06 5,030,208
5,000 Teligent Inc., Term Loan B3 B- 06/30/06 4,965,625
- -----------------------------------------------------------------------------------------------------------------------------------
20,060,416
- -----------------------------------------------------------------------------------------------------------------------------------
Telecommunications/Hybrid - 1.8%
5,000 Nextel Partners Operating Co., Term Loan B B2 B- 01/29/08 5,065,625
- -----------------------------------------------------------------------------------------------------------------------------------
Telecommunications/Satellite - 1.7%
5,000 Satelites Mexicanos, S.A. de C.V., Bond B1 B+ 06/30/04 4,700,000
- -----------------------------------------------------------------------------------------------------------------------------------
Telecommunications/Wireless Messaging - 2.7%
8,106 Arch Paging, Inc., Term Loan C B2 B 06/30/06 7,558,495
- -----------------------------------------------------------------------------------------------------------------------------------
Textiles & Leather - 3.5%
9,875 Norcross Safety Products LLC, Term Loan NR NR 09/30/05 9,800,938
- -----------------------------------------------------------------------------------------------------------------------------------
Transportation/Cargo - 3.2%
9,000 North American Van Lines, Inc., Term Loan B B1 B+ 11/18/07 8,983,125
- -----------------------------------------------------------------------------------------------------------------------------------
Transportation/Personal - 1.8%
2,500 Avis Rent A Car, Inc., Term Loan B Ba3 BB+ 06/30/06 2,516,667
2,500 Avis Rent A Car, Inc., Term Loan C Ba3 BB+ 06/30/07 2,516,667
- -----------------------------------------------------------------------------------------------------------------------------------
5,033,334
- -----------------------------------------------------------------------------------------------------------------------------------
Transportation/Rail Manufacturing - 1.4%
4,000 Kansas City Southern Railway Co., Term Loan B Ba1 BBB 12/29/06 4,027,499
- -----------------------------------------------------------------------------------------------------------------------------------
Total Variable Rate Senior Loan Interests (cost $355,162,158) 354,405,318
-------------------------------------------------------------------------------------------------------------------
<PAGE>
Portfolio of Investments (continued)
NUVEEN SENIOR INCOME FUND (NSL)
January 31, 2000
(Unaudited)
<CAPTION>
Principal Stated Market
Amount (000) Description Maturity** Value
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHORT-TERM INVESTMENTS - 19.7%
Commercial Paper:
$ 9,995 Cargill Inc. 02/04/00 $ 9,995,458
6,070 Centex Corp. 02/01/00 6,070,000
9,997 Central & South West Corp. 02/03/00 9,996,806
10,000 Maytag Corp. 02/01/00 10,000,000
9,997 Nabisco, Inc. 02/03/00 9,996,844
10,000 Texas Utilities Co. 02/01/00 10,000,000
-------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (cost $56,059,108) 56,059,108
-------------------------------------------------------------------------------------------------------------------
Total Investments (cost $411,221,266) - 144.5% 410,464,426
-------------------------------------------------------------------------------------------------------------------
Bank Borrowings Payable - (44.7)%+ (127,000,000)
-------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 0.2% 602,261
-------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $ 284,066,687
===================================================================================================================
NR Not rated.
* Bank loans rated below Baa by Moody's Investor Service, Inc. or BBB by
Standard & Poor's Group are considered to be below investment grade.
** Senior Loans in the Fund's portfolio generally are subject to mandatory
and/or optional prepayment. Because of these mandatory prepayment
conditions and because there may be significant economic incentives for a
Borrower to prepay, prepayments of Senior Loans in the Fund's portfolio may
occur. As a result, the actual remaining maturity of Senior Loans held in
the Fund's portfolio may be substantially less than the stated maturities
shown. The Fund estimates that the actual average maturity of the Senior
Loans held in its portfolio will be approximately 18-24 months.
*** Senior Loans in which the Fund invests generally pay interest at rates
which are periodically redetermined by reference to a base lending rate
plus a premium. These base lending rates are generally (i) the prime rate
offered by one or more major United States banks, (ii) the lending rate
offered by one or more major European banks, such as the London Inter-Bank
Offered Rate ("LIBOR") and (iii) the certificate of deposit rate. Senior
loans are generally considered to be restricted in that the Fund ordinarily
is contractually obligated to receive approval from the Agent Bank and/or
borrower prior to the disposition of a Senior Loan.
+ Bank borrowings payable based on total assets equals (30.7)%.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF NET ASSETS
January 31, 2000
(Unaudited)
<CAPTION>
<S> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at market value (cost $411,221,266) $410,464,426
Cash 587,451
Interest receivable 3,123,236
Other assets 176,537
- -----------------------------------------------------------------------------------------------------------------------------------
Total assets 414,351,650
- -----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Bank borrowings payable 127,000,000
Accrued expenses:
Management fees 119,111
Other 915,445
Common share dividends payable 2,250,407
- -----------------------------------------------------------------------------------------------------------------------------------
Total liabilities 130,284,963
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets $284,066,687
===================================================================================================================================
Common shares outstanding 29,610,617
===================================================================================================================================
Net asset value per Common share outstanding (net assets divided by
Common shares outstanding) $ 9.59
===================================================================================================================================
<CAPTION>
STATEMENT OF OPERATIONS
For the Period October 29, 1999 (commencement of operations) through January 31,
2000 (Unaudited)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
Interest $7,732,135
Fees 48,109
- -----------------------------------------------------------------------------------------------------------------------------------
Total investment income 7,780,244
- -----------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 662,026
Interest expense 524,305
Custodian's fees and expenses 94,169
Shareholders' servicing agent fees and expenses 68,082
Professional fees 41,378
Shareholders' reports - printing and mailing expenses 6,296
Trustees' fees and expenses 5,218
Other expenses 41,970
- -----------------------------------------------------------------------------------------------------------------------------------
Total expenses before expense reimbursement 1,443,444
Expense reimbursement (350,484)
- -----------------------------------------------------------------------------------------------------------------------------------
Net expenses 1,092,960
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income 6,687,284
- -----------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS
Net realized gain from investment transactions 151,759
Change in net unrealized appreciation (depreciation) of investments (756,840)
- -----------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) from investments (605,081)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $6,082,203
===================================================================================================================================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
For the Period October 29, 1999 (commencement of operations) through January 31,
2000 (Unaudited)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
OPERATIONS
Net investment income $ 6,687,284
Net realized gain from investment transactions 151,759
Net change in unrealized appreciation (depreciation) of investments (756,840)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations 6,082,203
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From undistributed net investment income (4,500,803)
From accumulated net realized gains from investment transactions --
- -----------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from distributions to Common shareholders (4,500,803)
- -----------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from sale of Common shares 282,383,896
Net proceeds from Common shares issued to shareholders due to
reinvestment of distributions 1,307
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets 283,966,603
Net assets at the beginning of period 100,084
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of period $284,066,687
===================================================================================================================================
Balance of undistributed net investment income at the end of period $ 2,186,481
===================================================================================================================================
<CAPTION>
STATEMENT OF CASH FLOWS
For the Period October 29, 1999 (commencement of operations) through January 31,
2000 (Unaudited)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
CHANGE IN NET ASSETS FROM OPERATIONS $ 6,082,203
- -----------------------------------------------------------------------------------------------------------------------------------
Adjustments to Reconcile the Change in Net Assets from Operations to Net Cash
used for Operating Activities:
Increase in investments at value (410,464,426)
Increase in interest receivable (3,123,236)
Increase in other assets (176,537)
Increase in management fees 119,111
Increase in other liabilities 915,445
Increase in Common shares dividends payable 2,250,407
Total adjustments (410,479,236)
- -----------------------------------------------------------------------------------------------------------------------------------
NET CASH USED FOR OPERATING ACTIVITIES (404,397,033)
- -----------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from bank borrowings 127,000,000
Proceeds from shares sold 282,383,896
Proceeds from shares reinvested 1,307
Distributions to shareholders (4,500,803)
- -----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities 404,884,400
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN CASH 487,367
Cash at the beginning of period 100,084
- -----------------------------------------------------------------------------------------------------------------------------------
CASH AT THE END OF PERIOD $ 587,451
===================================================================================================================================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The Nuveen Senior Income Fund (the "Fund") is a non-diversified, closed-end
management investment company registered under the Investment Company Act of
1940, as amended. The Fund is listed on the New York Stock Exchange and trades
under the ticker symbol "NSL". The Fund was organized as a Massachusetts
business Trust on August 13, 1999. The Fund commenced operations on October 29,
1999.
The Fund seeks to provide a high level of current income, consistent with
preservation of capital by investing primarily in senior secured loans whose
interest rates float or adjust periodically based on a benchmark interest rate
index. The Fund seeks to increase the income available for distribution to
Common shareholders by utilizing financial leverage.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements in accordance with generally
accepted accounting principles.
Investment Valuation
The prices of senior loans in the Fund's investment portfolio are provided by
pricing services approved by the Fund's Board of Trustees. The pricing service
providers typically value senior loans at the mean of the highest bona fide bid
and lowest bona fide ask prices when current quotations are readily available.
Senior loans for which current quotations are not readily available are valued
at a fair value using a wide range of market data and other information and
analysis, including credit considerations considered relevant by such pricing
service providers to determine valuations. Short-term investments which mature
within 60 days are valued at amortized cost, which approximates market value.
Investment Transactions
Investment transactions are recorded on a trade date basis.
Investment Income
Interest income is determined on the basis of interest accrued, adjusted for
amortization of premiums and accretion of discounts when required for federal
income tax purposes. Facilities fees on senior loans purchased are treated as
market discounts. Market premiums and discounts are amortized over the expected
life of each respective borrowing.
Income Taxes
The Fund intends to comply with the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its net
investment income, in addition to any significant amounts of net realized
capital gains from investment transactions. The Fund currently considers
significant net realized capital gains as amounts in excess of $.01 per share.
Net realized capital gain distributions are subject to federal taxation.
Dividends and Distributions to Shareholders
The Fund intends to declare and pay monthly distributions to Common
shareholders. Generally payment is made or reinvestment is credited to
shareholder accounts on the first business day after month-end. Net realized
capital gains from investment transactions, if any, are distributed to
shareholders not less frequently than annually. Furthermore, capital gains are
distributed only to the extent they exceed available capital loss carryforwards.
Distributions to shareholders of net investment income, and net realized capital
gains are recorded on the ex-dividend date. The amount and timing of
distributions are determined in accordance with federal income tax regulations,
which may differ from generally accepted accounting principles. Accordingly,
temporary over-distributions as a result of these differences may occur and will
be classified as either distributions in excess of net investment income and/or
distributions in excess of net realized gains from investment transactions,
where applicable.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
(Unaudited)
Derivative Financial Instruments
The Fund may invest in certain derivative financial instruments including
futures, forward, swap and option contracts, and other financial instruments
with similar characteristics. Although the Fund is authorized to invest in such
financial instruments, and may do so in the future, it did not make any such
investments during the period October 29, 1999 (commencement of
operations)through January 31, 2000.
Custodian Fee Credit
The Fund has an arrangement with the custodian bank whereby the custodian fees
and expenses are reduced by credits earned on the Fund's cash on deposit with
the bank. Such deposit arrangements are an alternative to overnight investments.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of increases and decreases in net
assets from operations during the reporting period. Actual results may differ
from those estimates.
2. FUND SHARES
During the period October 29, 1999 (commencement of operations)through January
31, 2000, 29,600,000 shares were sold and 137 shares were issued to shareholders
due to reinvestment of distributions.
3. DISTRIBUTIONS TO SHAREHOLDERS
The Fund declared a dividend distribution of $.0785 per share from its net
investment income which was paid on March 1, 2000, to shareholders of record on
February 15, 2000.
4. INVESTMENT TRANSACTIONS
Purchases and sales of investments (excluding short-term investments) during
period October 29, 1999 (commencement of operations)through January 31, 2000,
aggregated $395,103,671 and $40,339,803, respectively.
At January 31, 2000, the identified cost of investments owned for federal income
tax purposes was $411,221,266.
5. UNREALIZED APPRECIATION (DEPRECIATION)
At January 31, 2000, net unrealized depreciation of investments for federal
income tax purposes aggregated $756,840 of which $1,568,082 related to
appreciated securities and $2,324,922 related to depreciated securities.
6. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Under the Fund's investment management agreement with Nuveen Senior Loan Asset
Management Inc. (the "Adviser"), a wholly owned subsidiary of The John Nuveen
Company, the Fund pays an annual management fee, payable monthly, of .8500 of
1%, reduced on managed assets of $1 billion or more, which is based upon the
average daily managed assets of the Fund. "Managed assets" shall mean the
average daily gross asset value of the Fund, minus the sum of the Fund's accrued
and unpaid dividends on any outstanding Preferred Shares and accrued liabilities
(other than the principal amount of any borrowings incurred, commercial paper or
notes issued by the Fund and the liquidation preference of any outstanding
Preferred Shares).
The Adviser has agreed to waive part of its management fees or reimburse certain
expenses of the Fund in an amount equal to .45% of the average daily managed
assets for the period October 29, 1999 (commencement of operations) through
October 31, 2004, .35% of the average daily managed assets for the year ended
October 31, 2005, .25% of the average daily managed assets for the year ended
October 31, 2006, .15% of the average daily managed assets for the year ended
October 31, 2007, .10% of the average daily managed assets for the year ended
October 31, 2008, and .05% of the average daily managed assets for the year
ended October 31, 2009. The Adviser has not agreed to reimburse the Fund for any
portion of its fees and expenses beyond October 31, 2009.
The fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Fund pays no
compensation directly to those of its Trustees who are affiliated with the
Adviser or to their officers, all of whom receive remuneration for their
services to the Fund from the Adviser.
<PAGE>
7. COMPOSITION OF NET ASSETS
At January 31, 2000, net assets consisted of:
- -------------------------------------------------------------------------------
Common shares, $.01 par value per share $ 296,106
Paid-in surplus 282,189,181
Balance of undistributed net investment income 2,186,481
Accumulated net realized gain from investment transactions 151,759
Net unrealized appreciation (depreciation) of investments (756,840)
- -------------------------------------------------------------------------------
Net assets $284,066,687
===============================================================================
Authorized shares:
Common Unlimited
Preferred Unlimited
===============================================================================
8. COMMITMENTS
Pursuant to the terms of certain of the Variable Rate Senior Loan agreements,
the Fund may have unfunded loan commitments. There were no such unfunded loan
commitments as of January 31, 2000. The Fund generally will maintain with its
custodian short-term investments and/or cash having an aggregate value at least
equal to the amount of unfunded loan commitments.
9. SENIOR LOAN PARTICIPATION COMMITMENTS
The Fund invests primarily in assignments, participations or acts as a party to
the primary lending syndicate of a Variable Rate Senior Loan interest to United
States and foreign corporations, partnerships, and other entities. If the Fund
purchases a participation of a Senior Loan Interest, the Fund would typically
enter into a contractual agreement with the lender or other third party selling
the participation, but not with the borrower directly. As such, the Fund assumes
the credit risk of the Borrower, Selling Participant or other persons
interpositioned between the Fund and the Borrower. There were no such
participation commitments as of January 31, 2000.
10. BORROWINGS
In accordance with its investment policies, the Fund may borrow money from banks
for investment purposes in an amount up to 331/3% of the Fund's total assets
immediately after such borrowing or issuance.
The Trust has entered into a $150,000,000 revolving credit agreement with
Deutsche Bank AG which expires December 19, 2000. The Trust paid $200,000 in
fees in connection with obtaining the agreement. These Prepaid fees are being
amortized into expense over the term of the agreement. Interest is charged at a
rate of either the Fed Funds rate plus .50%, LIBOR plus .50% or the Prime Rate.
An unused commitment fee of .125% is charged on the unused portion of the
facility.
The average daily balance of bank borrowings for the period October 29, 1999
(commencement of operations) through January 31, 2000, was approximately
$29,958,000 with an average interest rate of 6.72%.
<PAGE>
FINANCIAL HIGHLIGHTS
(Unaudited)
Selected data for a share outstanding throughout the period October 29, 1999
(commencement of operations) through January 31, 2000:
<TABLE>
<CAPTION>
Investment Operations Less Distributions
--------------------------------- ------------------------------
Net
Realized/
Beginning Net Unrealized Net
Net Asset Investment Investment Investment Capital
Value Income Gain (Loss) Total Income Gains Total
<S> <C> <C> <C> <C> <C> <C> <C>
Year Ended 7/31:
2000 (a) $9.55 $.23 $(.03) $.20 $(.15) $-- $(.15)
<CAPTION>
Total Returns
------------------------------
Organization
and Ending Ending Based on
Offering Net Asset Market Based on Net Asset
Costs Value Value Market Value+ Value+
<S> <C> <C> <C> <C> <C>
Year Ended 7/31:
2000 (a) $(.01) $9.59 $9.5625 (2.85)% 2.02%
<CAPTION>
Ratios/Supplemental Data
---------------------------------------------------------------------------------------------
Before Reimbursement After Reimbursement**
------------------------------- --------------------------------
Ratio of Ratio of Net Ratio of Ratio of Net
Operating Investment Operating Investment
Ending Expenses to Income to Expenses to Income to Portfolio
Net Assets Average Average Average Average Turnover
(000) Net Assets++ Net Assets++ Net Assets++ Net Assets++ Rate
<S> <C> <C> <C> <C> <C> <C>
Year Ended 7/31:
2000 (a) $284,067 2.03%* 8.92%* 1.54%* 9.41%* 14%
* Annualized.
** After expense reimbursement, where applicable.
+ Total Return on Market Value is the combination of reinvested dividend
income, reinvested capital gain distributions, if any, and changes in stock
price per share. Total Return on Net Asset Value is the combination of
reinvested dividend income, reinvested capital gain distributions, if any,
and changes in net asset value per share. Total returns are not annualized.
++ Each Ratio of Operating Expenses to Average Net Assets and each Ratio of
Net Investment Income to Average Net Assets includes the effect of the
interest expense paid on bank borrowings of .74%.
(a) For the period October 29, 1999 (commencement of operations) through
January 31, 2000.
</TABLE>
<PAGE>
BUILD YOUR WEALTH AUTOMATICALLY
Sidebar text: Nuveen offers a number of convenient ways to add to your portfolio
and earn the income you need to achieve your financial goals.
Sidebar text: Nuveen makes reinvesting easy. A phone call is all it takes to set
up your reinvestment account.
NUVEEN EXCHANGE-TRADED FUNDS DIVIDEND REINVESTMENT PLAN
The Nuveen Senior Income Fund allows you to conveniently reinvest dividends
and/or capital gains distributions in additional fund shares. If you do not
elect to reinvest distributions, all distributions are paid by check or can be
deposited directly into your bank or brokerage account.
By choosing to reinvest, you'll be able to invest money regularly and
automatically, and watch your investment grow through the power of compounding.
You'll also potentially benefit from dollar-cost averaging, a technique of
investing at regular intervals, which allows you to build a high-quality
portfolio conveniently and cost effectively over time.
Dollar-cost averaging does not ensure a profit, nor does it protect you against
loss in a declining market. Because such a plan involves continuous investment
regardless of fluctuating prices, investors should consider their financial
ability to continue purchases through periods of low price levels.
EASY AND CONVENIENT
To make recordkeeping easy and convenient, each month you'll receive a statement
showing your total dividends and distributions, the date of investment, the
shares acquired and the price per share, and the total number of shares you own.
HOW SHARES ARE PURCHASED
The shares you acquire by reinvesting will either be purchased on the open
market or newly issued by the Fund. If the shares are trading at or above net
asset value at the time of valuation, the Fund will issue new shares at a price
equal to the greater of (i) net asset value per Common Share on that date or
(ii) 95% of the market price on that date. If the shares are trading at less
than net asset value, shares for your account will be purchased on the open
market. Dividends and distributions received to purchase shares in the open
market will normally be invested shortly after the dividend payment date. No
interest will be paid on dividends and distributions awaiting reinvestment.
Because the market price of shares may increase before purchases are completed,
the average purchase price per share may exceed the market price at the time of
valuation, resulting in the acquisition of fewer shares than if the dividend or
distribution had been paid in shares issued by the fund. A pro rata portion of
any applicable brokerage commissions on open market purchases will be paid by
Plan participants. These commissions usually will be lower than those charged on
individual transactions.
FLEXIBILITY
You may, of course, change your distribution option or withdraw from the Plan at
any time, should your needs or situation change. Should you withdraw, you can
receive a certificate for all whole shares credited to your reinvestment account
and cash payment for fractional shares, or cash payment for all reinvestment
account shares, less brokerage commissions and a $2.50 service fee.
You can also reinvest if your shares are registered in the name of a brokerage
firm, bank, or other nominee. Just ask your investment adviser if the firm will
participate on your behalf. If not, it's easy to have the shares registered in
your name and to apply for a reinvestment account directly. Participants whose
shares are registered in the name of one firm may not be able to transfer the
shares to another firm and continue to participate in the Plan.
The Fund reserves the right to amend or terminate the Plan at any time. Although
the Fund reserves the right to amend the Plan to include a service charge
payable by the participants, there is no direct service charge to participants
in the Plan at this time.
For more information on the Nuveen Automatic Reinvestment Plan or to enroll in
or withdraw from the Plan, speak with your financial adviser or call us at (800)
257-8787.
<PAGE>
FUND INFORMATION
BOARD OF TRUSTEES
James E. Bacon
Jack B. Evans
William T. Kissick
Thomas E. Leafstrand
Timothy R. Schwertfeger
Sheila W. Wellington
FUND MANAGER
Nuveen Senior Loan Asset Management Inc.
333 West Wacker Drive
Chicago, IL 60606
CUSTODIAN
Chase Bank of Texas
600 Travis Street
Houston, TX 77002
TRANSFER AGENT AND
SHAREHOLDER SERVICES
The Chase Manhattan Bank
4 New York Plaza
New York, NY 10004-2413
(800) 257-8787
LEGAL COUNSEL
Chapman and Cutler
Chicago, IL
INDEPENDENT AUDITORS
KPMG LLP
Chicago, IL
The fund intends to repurchase shares of its own common or preferred stock in
the future at such times and in such amounts as is deemed advisable. No shares
were repurchased during the period ended January 31, 2000. Any future
repurchases will be reported to shareholders in the next annual or semiannual
report.
<PAGE>
SERVING INVESTORS FOR GENERATIONS
Photo of: John Nuveen, Sr.
For over a century, generations of Americans have relied on Nuveen to help them
grow and keep the money they've earned. Financial advisers, investors and their
families have associated Nuveen investments with quality, expertise and
dependability since 1898. That is why financial advisers have entrusted the
assets of more than 1.3 million investors to Nuveen.
With the know-how that comes from a century of experience, Nuveen continues to
build upon its reputation for quality. Now, financial advisers and investors can
count on Nuveen Investments to help them design customized solutions that meet
the far-reaching financial goals unique to family wealth strategies - solutions
that can translate into legacies.
Invest well. Look ahead. Leave your mark.
To find out more about how Nuveen investment products and services can help you
preserve your financial security, talk with your financial adviser, or call us
at (800) 257-8787 for more information, including a prospectus where applicable.
Please read that information carefully before you invest.
LOGO:
NUVEEN Investments
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, IL 60606-1286
www.nuveen.com
FSA-2-1-00
<PAGE>
