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Prudential High Yield Fund, Inc.
Supplement dated May 28, 1996 to
Prospectus dated March 1, 1996
HOW THE FUND INVESTS
INVESTMENT OBJECTIVE AND POLICIES
The Board of Directors of the Fund has approved modifications to the Fund's
investment policies and restrictions. These changes will be submitted to
shareholders for their approval at a special meeting scheduled to be held on or
about October 8, 1996. The changes to the Fund's investment policies and
restrictions are summarized below.
A number of the Fund's investment policies and restrictions are proposed to
be eliminated or modified which would permit the Fund, among other things, (1)
to purchase non-fixed-income equity securities; (2) to purchase debt and equity
securities of financially troubled and operationally troubled issuers (commonly
referred to as ``distressed securities''); (3) to purchase and sell put and call
options on securities and financial indices for hedging and return enhancement
purposes; (4) to purchase and sell financial futures contracts and options
thereon traded on a commodities exchange or board of trade for certain hedging,
return enhancement and risk management purposes; (5) to invest in bank debt,
including loan interests representing obligations of U.S. companies or their
affiliates undertaken to finance a capital restructuring or in connection with
recapitalizations, acquisitions, leveraged buy-outs, refinancings or other
financially leveraged transactions (i.e., loan participations); and (6) to
invest in securities of other investment companies.
If approved by shareholders, these changes will not take effect until the
Fund issues a new prospectus for the Fund (or a supplement thereto).
Distressed securities are subject to greater credit and market risks and
price volatility than the securities in which the Fund generally invests.
Shareholders will be asked to approve a fundamental policy (i.e., a policy that
may only be changed by a vote of shareholders) which will limit the Fund's
ability to invest in distressed securities (in combination with other
non-fixed-income equity securities) to no more than 10% of its total assets. If
this fundamental policy is approved by shareholders, the Fund will limit its
investment in such securities to no more than 5% of its total assets in
accordance with a non-fundamental policy adopted by the Board of Directors.
MF110C-1
