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Prudential Mortgage Income Fund
Supplement Dated August 27, 1998
to Prospectus Dated March 3, 1998
The Directors of Prudential Mortgage Income Fund, Inc. (the Fund) have
recently approved a proposal to exchange the assets and liabilities of the Fund
for shares of Prudential Government Income Fund, Inc. (Government Income Fund).
Class A, Class B, Class C and Class Z shares of the Fund would be exchanged at
relative net asset value for Class A, Class B, Class C and Class Z shares,
respectively, of Government Income Fund.
The transfer has been approved by the Board of Directors of the Fund and by
the Board of Directors of Government Income Fund and is subject to approval by
the shareholders of the Fund. It is anticipated that a proxy
statement/prospectus relating to the transaction will be mailed to shareholders
in late October 1998.
Under the terms of the proposal, shareholders of the Fund would become
shareholders of Government Income Fund. No sales charge would be imposed on the
proposed transfer. The Fund anticipates obtaining an opinion of its counsel that
the transaction would be a tax-free reorganization under the Internal Revenue
Code and therefore no gain or loss for Federal income tax purposes would be
recognized by shareholders of the Fund.
Effective immediately, the Fund will no longer accept orders to purchase or
exchange into shares of any class except for purchases by certain Retirement and
Employee Plans (excluding IRA accounts). Existing shareholders may continue to
acquire shares through dividend reinvestment. The current exchange privilege of
obtaining shares of other Prudential Mutual Funds and the current redemption
privilege will remain in effect until the transaction is consummated.
Government Income Fund's investment objective is to seek high current
return.
MF 102A-1
