<PAGE>
SUPPLEMENT TO THE PROSPECTUSES AND
STATEMENTS OF ADDITIONAL INFORMATION OF
<TABLE>
<CAPTION>
<S> <C>
KEYSTONE AMERICA CAPITAL PRESERVATION KEYSTONE AMERICA STATE TAX FREE FUND
AND INCOME FUND KEYSTONE AMERICA STATE TAX FREE FUND -- SERIES II
KEYSTONE AMERICA GOVERNMENT SECURITIES FUND KEYSTONE LIQUID TRUST
KEYSTONE AMERICA INTERMEDIATE TERM BOND FUND (THE "FUND(S)")
The prospectus and statement of additional information of each Fund is
hereby supplemented as follows:
Effective April 10, 1995 (except as otherwise noted, the following changes
do not apply to Keystone Liquid Trust ("KLT")):
* Purchases of the Fund's Class A shares in the amount of $1 million or more
and/or purchases of Class A shares made by a corporate qualified
retirement plan or a non-qualified deferred compensation plan sponsored by
a corporation having 100 eligible employees or more (a "Qualifying Plan")
will be at net asset value without the imposition of a front-end sales
charge (each such purchase, a "NAV Purchase").
* With respect to the NAV Purchases described above, Keystone Investment
Distributors Company will pay broker/dealers or others concessions based
on (i) the investor's cumulative purchases during the one-year period
beginning with the date of the initial NAV Purchase and (ii) the
investor's cumulative purchases during each subsequent one-year period
beginning with the first NAV Purchase following the end of the prior
period. For such purchases, concessions will be paid at the following
rate: 0.50% of the investment amount up to $4,999,999 plus 0.25% of the
investment amount over $4,999,999.
* Class A shares acquired in a NAV Purchase will be subject to a contingent
deferred sales charge ("CDSC") of 0.50% upon redemption during the 24
month period commencing on the date the shares were originally purchased.
* CDSC will be waived under the following additional circumstances:
For each Fund's Class A, B, and C shares (including KLT), no CDSC will
be imposed on any redemption consisting of (1) loan proceeds to a
retirement plan participant; (2) financial hardship withdrawals made by a
retirement plan participant; or (3) returns of excess contributions or
excess deferral amounts made to a retirement plan participant.
With respect to Class A shares purchased by a Qualifying Plan at net
asset value or Class C shares purchased by a Qualifying Plan, no CDSC will
be imposed on any redemptions made specifically by an individual
participant in the Qualifying Plan. This waiver is not available in the
event a Qualifying Plan as a whole redeems substantially all of its
assets.
(over)
Effective May 1, 1995:
* Excepting KLT, the name of each Fund will be changed to delete the word
"America" from the Fund's name.
* The name of the Funds' investment adviser and certain of the adviser's
affiliates will also be changed: Keystone Custodian Funds, Inc., the
Funds' investment adviser, will become "Keystone Investment Management
Company"; Keystone Distributors, Inc., the Funds' principal underwriter,
will become "Keystone Investment Distributors Company"; and Keystone
Group, Inc., the parent company of both the adviser and the underwriter,
will become "Keystone Investments, Inc."
May 1, 1995
AMER5-SK
</TABLE>
