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Prudential Government Securities Trust
(Intermediate Term Series)
Supplement dated May 12, 1995 to
Prospectus dated April 3, 1995
HOW THE TRUST INVESTS
INVESTMENT OBJECTIVE AND POLICIES
The Trustees of the Trust have approved modifications to the investment
policies and restrictions of the Trust's Intermediate Term Series (the Series).
These changes, along with the modifications proposed to the Series' Distribution
and Service Plan described below under ``How the Trust is
Managed--Distributor'', will be submitted to shareholders for their approval at
a special meeting scheduled to be held in or about July 1995. The changes to the
Series' investment policies and restrictions are summarized below and will be
described in more detail in the proxy statement which will be mailed to
shareholders.
A number of the Series' investment policies and restrictions are proposed to
be eliminated or modified which would permit the Series, among other things, (1)
to reduce the percentage of its total assets which must be invested in
government securities to 65% (currently 80%); (2) to invest up to 35% of its
remaining total assets in corporate and other non-governmental/agency debt
obligations, including, but not limited to, collateralized mortgage obligations,
stripped mortgaged-backed securities and asset-backed securities rated at least
A by S&P or Moody's or, if unrated, determined to be of comparable quality by
the investment adviser; (3) to shorten its maximum weighted average maturity to
5 years (currently 10 years) and change its name to the ``Short-Intermediate
Term Series'', (4) to invest up to 15% of its net assets in securities with
legal or contractual restrictions on resale and other illiquid securities (5) to
enter into interest rate swap transactions; (6) to purchase and sell financial
futures contracts and options thereon; (7) to enter into short sales; and (8) to
increase its borrowing limit to 33 1/3% of its total assets and borrow to take
advantage of investment opportunities.
HOW THE TRUST IS MANAGED
MANAGER
Effective May 5, 1995, Barbara L. Kenworthy, a managing director and senior
portfolio manager of Prudential Investment Advisors, a unit of The Prudential
Investment Corporation (PIC), became the portfolio manager of the Series. Ms.
Kenworthy has responsibility for the day-to-day management of the Series'
portfolio and a number of other portfolios advised by PIC. Ms. Kenworthy was
previously employed by The Dreyfus Corporation (June 1985 - June 1994) and
served as president and portfolio manager for several Dreyfus fixed-income
funds.
DISTRIBUTOR
The Trustees of the Trust have also approved modifications to the Series'
Distribution and Service Plan (the Plan) to change it from a reimbursement to a
compensation plan. Under the current Plan the Distributor is reimbursed for
certain ongoing costs actually incurred by it in connection with the services
and activities undertaken to distribute shares of the Series and service
shareholder accounts (Distribution Activities). As proposed to be amended, the
Plan would authorize the Series to pay the Distributor the same maximum annual
fee as under the current Plan as compensation for its Distribution Activities.
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