SUPPLEMENT TO THE STATEMENT OF ADDITIONAL INFORMATION DATED MAY 1, 1998 FOR
THE LORD ABBETT BOND-DEBENTURE FUND, INC.
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SUPPLEMENT EFFECTIVE DATE: JULY 2, 1998
Choosing the right mix of financial
vehicles can make all the difference
in your long-term security
Both of these vehicles are engineered to perform
[PHOTO OMITTED]
Both cost approximately the same
Which One
Should You Buy?
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It Depends On What
You Wish To Accomplish
[LOGO](R) A Tradition of Performance Through Disciplined Investing
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Investment Vehicles
Should Match Your Financial Goals
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Why would an allocation favor bonds over stocks?
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The probable answer here is an individual's need for current income, which
becomes more pressing during the retirement years.
Yields on 10-year Treasury bonds, which generally track prevailing interest
rates, declined from 8.32% in 1978 to 5.74% in 1997. Investors who require a
consistent level of income have therefore had to commit proportionately more of
their assets to bond investments during that period -- just to meet the same
need!
Why would an allocation favor stocks over bonds?
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Like bonds, some equity investments can provide you with significant levels of
current income through the payment of dividends. Their stronger role in most
allocations, however, is to serve as an engine for portfolio growth through
potential appreciation of share price.
Reinvesting any dividends you receive from your equity holdings is a proven
strategy for enhancing the long-term growth potential of these total return
vehicles.
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Would you use a luxury sedan to plow a piece of bottom land? Would you drive to
the opera in a farm tractor? No, of course you wouldn't. Why? Because they're
not the jobs those vehicles were designed for.
The investment vehicles known as bonds and stocks are also designed to get
specific jobs done effectively and can help you achieve financial security. As a
first step in what should be a life-long process, talk about your financial
future with an investment professional. Once you have determined your short- and
long-term goals, your investment professional can map out a reasonable
investment plan to help you arrive at your financial destination.
Where Should You Invest Your Money?
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Your investment professional will make a recommendation regarding how your money
should be committed to bond and stock investments. Your portfolio's allocation
is a vital element in your personal investment plan that, ideally, will help to
meet both your current and future needs.
Our Recommended Strategy:
Long-Term Growth Transitioned to Current Income
We believe that equity investments should have a prominent place in a
diversified portfolio aimed at providing attractive levels of income both now
and in the future. As you will see in the accompanying example, which spotlights
a typical middle-class couple whom we call "the Andrews," we are specifically
recommending a two-step program.
o First, harness the proven growth potential of equities as a way to
significantly expand your asset base.
o Second, transfer appreciated assets, as needed, to income-focused bond
investments.
We believe this two-part strategy has the potential to help you maintain your
quality of life as you grow older.
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A Strategy Geared To A Lifetime's Income Needs
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The Andrews' Initial Allocation of Their $100,000 Investment:*
$70,000 to Lord Abbett Bond-Debenture Fund to Generate Current Income
$30,000 to Lord Abbett Affiliated Fund to Provide the Opportunity for Growth
Bond-Debenture Total Value Affiliated Total Value
1977 $67,399 $28,870
1978 $63,908 $29,902
1979 $62,543 $38,691
1980 $61,839 $48,218
1981 $64,055 $42,377
1982 $72,428 $52,535
1983 $76,436 $65,948
1984 $78,504 $62,954
1985 $84,419 $79,869
1986 $93,023 $88,196
1987 $84,887 $91,011
1988 $103,545 $85,172
1989 $97,498 $105,213
1990 $98,709 $79,711
1991 $120,972 $97,247
1992 $126,471 $109,299
1993 $159,908 $96,241
1994 $139,979 $100,148
1995 $149,301 $131,894
1996 $180,095 $128,339
1997 $186,793 $160,630
If held through 3/31/98, with no additional changes in allocation or investments
made, the total value of Lord Abbett Bond-Debenture Fund would have been
$195,016; the total value of Lord Abbett Affiliated Fund through that date would
have been $177,901.
*A reduced Class A share sales charge of 3.75%, applicable to investments of
$100,000, has been deducted. **Illustration assumes the reinvestment of all
distributions. +Lord Abbett Bond-Debenture Fund pays dividends monthly.
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At 12/31/97, the Andrews' portfolio was worth $347,423 and their portfolio was
generating over $15,000 in annual income.
SEC-Required Uniformly Computed Average Annual Rates of Total Return and SEC
Yield at the Class A share maximum sales charge for the periods ended 3/31/98
were:++
Bond-Debenture Fund Affiliated Fund
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1 Yr. 5 Yrs. 10 Yrs. 30-Day Yield 1 Yr. 5 Yrs. 10 Yrs.
+11.10% +9.01% +10.49% 6.65% +26.80% +18.19% +15.62%
Past results are not an indication of future results. The investment return and
principal value of an investment in either fund will fluctuate so that shares,
on any given day or when redeemed, may be worth more or less than their original
cost.
++Class A share maximum sales charges for Bond-Debenture Fund and Affiliated
Fund are 4.75% and 5.75%, respectively.
<PAGE>
The Strategy in Action
In the example we've just seen, the Andrews had $100,000 to invest and initially
needed about $5,000 in annual income from their portfolio. Their investment
professional suggested that they split their money between two investments: Lord
Abbett Bond-Debenture Fund, a fixed-income mutual fund, to provide for their
current income needs, and Lord Abbett Affiliated Fund, an equity mutual fund, to
handle their long-term growth needs.
As the Andrews' income requirements increased over time, their investment
professional transferred money from Affiliated Fund to the Bond-Debenture Fund.
The secret behind the Andrews' success? An equity-based investment strategy that
helped to feed the couple's growing appetite for current income.
An Example You'd Be Smart to Follow
A smart investment mix can help you turn financial goals into long-term
financial reality. Income needs in our example were satisfied by a diversified
bond vehicle. Growth needs were satisfied by a diversified equity vehicle. By
choosing this strategy, the Andrews' investment professional designed an
investment portfolio that satisfied the couple's initial needs, and also gave
them the flexibility to meet their future needs. We believe there are two major
considerations in choosing investments.
o What are your income needs now?
o How much income will you need in the future?
Your investment professional can help you develop a long-term investment
strategy that is perfectly tailored to both your short- and long-term goals. Sit
down with him or her soon to discuss how the Lord Abbett Family of Funds can
help you meet your financial objectives.
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Bond-Debenture Fund Affiliated Fund
Minimum Investment: Minimum Investment:
$1,000; $250 for IRAs $250; $250 for IRAs
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FUND SYMBOL CUSIP # FUND SYMBOL CUSIP #
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CLASS A LBNDX 544004104 LAFFX 544001100
CLASS B LBNBX 544004203 LAFBX 544001209
CLASS C BDLAX 544004302 LAFCX 544001308
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The Vision of Lord Abbett
In an age of consolidation within financial services, Lord, Abbett & Co.
continues its long tradition of excellence as an independent partnership.
Founded in 1929, money management, built on in-depth proprietary research, is
the Firm's only business. Assets under management currently total over $27
billion, consisting of a family of mutual funds and separately managed equity,
fixed-income and balanced accounts for corporations, institutions and
individuals.
For complete information about Lord Abbett Bond-Debenture Fund, Lord Abbett
Affiliated Fund, or any other Lord Abbett mutual fund, including charges and
expenses, call your investment professional or Lord Abbett Distributor LLC at
800-874-3733 for a prospectus. Investors should read the prospectus carefully
before investing.
[LOGO](R) LORD, ABBETT & CO.
Investment Management
A Tradition of Performance Through Disciplined Investing
LORD ABBETT DISTRIBUTOR LLC
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The GM Building o 767 Fifth Avenue o New York, NY 10153-0203 o 800-426-1130
Numbers to Keep Handy
For Shareholder Account or Statement Inquiries: 800-821-5129
For Literature: 800-874-3733
For More Information: 800-426-1130
Visit Our Web Site: http://www.lordabbett.com1
LATR-40-398 (6/98)
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