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April 14, 2000
RE: STIT Treasury Portfolio, STIT Government & Agency Portfolio.
STIC Prime Portfolio, STIC Liquid Assets Portfolio.
Dear xxxxxxx:
Pursuant to your request for additional information about certain issues in the
current proxy vote for the AIM institutional money market funds, AIM is pleased
to provide the following:
* Changing investment restrictions so they are non-fundamental is meant to
give the fund's board of directors the most investment flexibility under
the 1940 Act. As disclosed in the proxy statement, several of the funds'
current fundamental restrictions reflect regulatory, business or industry
conditions, practices or requirements that are no longer applicable.
Furthermore, some current fundamental restrictions reflect regulatory
requirements that remain in effect, but are not required to be stated as
fundamental or, in some cases, even as non-fundamental restrictions.
While this administrative change is being proposed across all funds, a
fund's board of directors will not approve changes to the fund's
investment restrictions that would compromise compliance with SEC Rule
2a-7.
* Changing the investment objective so it is non-fundamental is a move that
may save shareholders undue expenses in the future. The fund's board of
directors would have the latitude to make changes it deems necessary and
prudent to the fund's investment objective without having to incur the
time and expense of additional proxy votes. Because trends can change so
quickly in the money markets, the ability to move faster in making such
changes also could benefit the fund's performance.
* Any material change to a fund's investment objective would still require
approval by the fund's board of directors AND require filing with the
Securities Exchange Commission ("SEC"). This filing period generally
takes up to 60 days during which AIM would typically give shareholders
sufficient notice to redeem their shares of the fund, if so desired.
Other than the change proposed in these proxies, AIM has no intention of
changing the investment objectives in any of its institutional money
market funds.
* AIM has every intention of managing all of its money market funds to
maintain their triple-A ratings from Standard & Poor's, Moody's and
Fitch IBCA. A fund rating is based on several factors, including an
analysis of a portfolio's credit quality, market price exposure and
management practices. Each of the three aforementioned rating agencies
monitors the AIM money market portfolios weekly to ensure they meet its
respective requirements for a triple-A rating.
Over the past 20 years, AIM has been committed to providing institutional
investors the highest quality investment products and services. While many
issues are addressed in this proxy vote, the underlying fundamental of managing
each institutional money market portfolio for safety, liquidity and yield (in
that order) will not change.
I hope this information satisfies your need for clarification on the issues
mentioned above. If I can be of further assistance, please contact me at
800-659-1005, ext. 1181.
Sincerely,
