SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
NOTICE OF REDEMPTION PURSUANT TO
RULE 23c-2 UNDER THE
INVESTMENT COMPANY ACT OF 1940
Select Asset Fund III (the "Company"), a closed-end investment
company registered under the Investment Company Act of 1940 (file no. 811-
10081), hereby notifies the Securities and Exchange Commission of its
intention to redeem immediately all the outstanding shares of each of its
Auction Market Preferred Stock, Series A (the "AMPS"), upon the occurrence
on any date more than 30 days hereafter of any event specified in Section
4.2 of the Statement of Preferences of the Company, dated September 5,
2000, relating to the Series A AMPS. A copy of Section 4.2, which obligates
the Company to make mandatory redemptions of the AMPS in the events set
forth therein, is attached.
SELECT ASSET FUND III
By: /s/ James A. McIntosh
--------------------------------------------
Name: James A. McIntosh
Title: President
SECTION 4.2 FROM STATEMENT OF PREFERENCES
OF SELECT ASSET FUND III
4.2 Mandatory Redemption. To the extent permitted under the
1940 Act and Delaware Law and notwithstanding that a No-Call Period may be
in effect pursuant to a Specific Redemption Provision, the Shares of AMPS
are subject to mandatory redemption in whole or in part in the event of a
Mandatory Redemption Event.
The occurrence of any of the following will be a "Mandatory
Redemption Event":
(a) (i) if both Moody's and S&P are rating the AMPS at the
request of the Company, either (A) the aggregate Adjusted Value of all
Moody's Eligible Assets held by the Company as of the close of business on
any Business Day is less than the Moody's Required Asset Coverage as of
such Business Day and such deficiency continues to exist as of 1:00 p.m.
(New York time) on the applicable Cure Date or (B) the aggregate Adjusted
Value of all S&P Eligible Assets held by the Company as of the close of
business on any Business Day is less than the S&P Required Asset Coverage
as of such Business Day and such deficiency continues to exist as of 1:00
p.m. (New York time) on the applicable Cure Date or (ii) if Moody's and not
S&P is rating the AMPS at the request of the Company, clause (A) above
shall be operative and the state of affairs described therein shall exist
and clause (B) above shall not be operative or (iii) if S&P and not Moody's
is rating the AMPS at the request of the Company, clause (B) above shall be
operative and the state of affairs described therein shall exist and clause
(A) above shall not be operative;
(b) (i) the aggregate Fair Market Value of the Securities and
other assets of the Company is less than 130% of the sum of the aggregate
AMPS redemption amount for all Shares of AMPS then Outstanding and the
aggregate redemption amount applicable to any other Preferred Stock of the
Company then outstanding, and such aggregate Fair Market Value remains less
than 130% of such amount through the close of business on the applicable
Cure Date;
(c) the Company ceases to qualify as a "regulated investment
company" within the meaning of the Code or is subject to federal income
taxation as a corporation with respect to its investment income; or
(d) Merrill Lynch, Pierce, Fenner & Smith Incorporated ceases
to be the Broker-Dealer.
