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PROSPECTUS SUPPLEMENT
dated August 29, 1996
State Bond Cash Management Fund
(Prospectus dated December 1, 1995)
State Bond Common Stock Fund
(Prospectus dated May 1, 1996)
State Bond Diversified Fund
(Prospectus dated May 1, 1996)
State Bond Minnesota Tax-Free Income Fund
(Prospectus dated November 1, 1995)
State Bond Tax Exempt Fund
(Prospectus dated November 1, 1995)
State Bond U.S. Government and Agency Securities Fund
(Prospectus dated February 1, 1996)
The Board of Directors of each of State Bond Cash Management Fund, State
Bond Common Stock Fund, State Bond Diversified Fund, State Bond Minnesota
Tax-Free Income Fund, State Bond Tax Exempt Fund and State Bond U.S. Government
and Agency Securities Fund (each, a "Fund") has approved a proposal to
reorganize each of the Funds. Each reorganization will involve the sale of the
respective Fund's assets, subject to certain liabilities, to a mutual fund
advised by affiliates of Federated Investors (each, a "Federated Fund") in
exchange for shares of the respective Federated Fund. Shares of each Fund would
be exchanged at net asset value for shares of equivalent value of the respective
Federated Fund. Each reorganization transaction is subject to approval by the
shareholders of the respective Fund and to certain conditions to closing,
including the receipt of an opinion as to the tax-free nature of the
reorganizations for the Funds, the Federated Funds and their respective
shareholders. It is anticipated that the proxy statement/prospectus relating to
each proposed reorganization will be mailed to shareholders in October 1996 and
that the meeting of shareholders will be held in early December 1996.
Under the terms of each proposed reorganization, Fund shareholders would
become shareholders of the respective Federated Fund, as follows:
State Bond Fund Federated Fund
State Bond Common Stock Fund Federated Growth Strategies Fund
State Bond Diversified Fund Federated American Leaders Fund, Inc.
State Bond Minnesota Tax-Free Federated Municipal Opportunities
Income Fund Fund, Inc.
State Bond Tax Exempt Fund Federated Municipal Opportunities
Fund, Inc.
State Bond U.S. Government Federated Fund for U.S. Government
and Agency Securities Fund Securities, Inc.
State Bond Cash Management Fund Automated Cash Management Trust
No sales charges would be imposed on the proposed reorganizations.
Federated Investors, a Pittsburgh-based money management firm, was founded
in 1955. Federated is a global investment manager with $90 billion in mutual
fund assets under management or administration across more than 250 funds. Since
its inception, Federated has grown to become one of America's largest and most
respected money managers--evidenced by the fact that Federated's mutual funds
and separate accounts service the investment needs of over 4,000 firms.
