CONSENT SOLICITATION STATEMENT
ROYCE VALUE TRUST, INC.
1414 Avenue of the Americas
New York, New York 10019
To the Holders of Royce Value Trust, Inc.'s 5 3/4% Investment Company
Convertible Notes due June 30, 2004 (the "Notes"):
Royce Value Trust, Inc. (the "Fund") is seeking Noteholder approval of two
separate amendments to the Indenture dated as of June 15, 1994 (the
"Indenture") between the Fund and United States Trust Company of New York, as
trustee (the "Trustee"), which governs the Notes held by you.
The first amendment would give the Fund's Board of Directors the right to
reduce or eliminate the 6.75% escalation of the conversion price in
additional years. This could avoid or minimize any increase in the
conversion price then in effect.
The second amendment would allow the Fund to issue and sell additional Notes
within the limitations already present in the Indenture.
Neither of these amendments would adversely affect any of your rights as a
Noteholder. Indeed, the first proposed amendment gives the Fund the option
of reducing or eliminating otherwise mandatory increases in the Notes'
conversion price. However, the Indenture needs to be amended to allow the
Fund to take these actions, and these amendments must be approved by a
majority in principal amount of the holders of the $40,000,000 aggregate
principal amount of the Notes presently issued and outstanding under the
Indenture. Accordingly, the Fund is soliciting your written consent to these
amendments.
The amendments and more detailed information concerning them are set forth
below.
The Fund's Board of Directors has fixed the close of business on October 11,
1995 as the record date for the determination of those Noteholders entitled
to vote on the proposed amendments, and only Noteholders of record at the
close of business on that day will be entitled to vote. On the record date,
there were $40,000,000 aggregate principal amount of Notes outstanding, of
which $39,803,000 were held of record by Cede & Co., Inc., nominee for
Depository Trust Company, which holds securities deposited with it by
financial institutions such as brokerage firms and banks. Four of those
financial institutions held of record 5% or more of the aggregate principal
amount of such Notes, as follows: Donaldson, Lufkin & Jenrette, c/o Pershing &
Co. -- $2.79 million, Manufacturers & Traders Trust Co. -- $3.55 million,
Merrill Lynch Pierce Fenner & Smith -- $14.79 million and Society National
Bank -- $3.00 million.
Please return your Consent Form promptly. You are urged to return the
enclosed Consent Form within one week after receipt, but in no event later
than November 9, 1995. Such date may be extended from time to time in the
sole discretion of the Fund until December 31, 1995.
Your consent is important. The Fund recommends that you vote FOR each of the
proposed amendments by signing, dating and promptly returning the enclosed
Consent Form in the postage prepaid, self-addressed envelope enclosed for
your convenience.
Very truly yours,
Charles M. Royce, President
October 12, 1995
<PAGE>
PROPOSED AMENDMENTS
1. Reduction or Elimination of Annual Escalator
A sentence in Section 4.06(a) of the Indenture, which covers the
adjustment of the conversion price of the Notes, provides that with respect
to the annual adjustment dates occurring in the years l997, 1998, 2002 and
2003, the Fund may, at its option, reduce or eliminate the escalator rate for
the year involved. The annual escalator is 6.75% (subject to possible reset
on July 1, 1999), and the Fund would like to increase the number of such
annual adjustment dates when it may be reduced or eliminated. In order to
give its Board of Directors such flexibility, the Fund is seeking to amend
the sentence in Section 4.06(a) to read as follows:
"Notwithstanding the first sentence of this subsection (a) to the
contrary, with respect to the Annual Adjustment Dates occurring after 1996,
the Company may, at its option, reduce or eliminate the Escalator Rate for
the year involved."
2. Issuance and Sale of Additional Notes
Under Section 5.12 of the Indenture, the Fund may incur indebtedness in
addition to the Notes, provided that (i) if the Fund proposed to use the net
proceeds of such additional indebtedness to purchase a portion of the Notes
or to refinance a portion of any indebtedness of the Fund then outstanding or
if such indebtedness constitutes a permitted temporary bank borrowing, the
Fund immediately thereafter has an asset coverage of at least 300% or (ii) if
the Fund proposed to use such net proceeds for any other purpose, the Fund
immediately thereafter has an asset coverage of at least 500%. (Such
additional indebtedness of the Fund may have different interest rates,
maturity dates and/or conversion and other rights than those applicable to
the Notes.) In addition, the Rating Agency Provisions of the Indenture, in
connection with which the Notes have been rated Aaa by Moody's Investors
Service, Inc. ("Moody's"), generally prevent the Fund from borrowing money,
unless the Fund shall have received written confirmation from Moody's that
such activity will not adversely affect its then current rating of the Notes.
As of September 30, 1995, the Fund had $40,000,000 of Notes payable and
could have issued and sold senior securities representing additional
indebtedness of up to $53,008,451 and having an asset coverage of 500%. As
set forth above, any such issuance and sale would also have required Moody's
to confirm that such activity would not adversely affect its then current
rating of the Notes.
The Fund issued and sold only $40,000,000 aggregate principal amount of
the Notes in June 1994, and the Indenture was not drafted so as to permit the
Fund to incur otherwise permitted additional indebtedness by issuing and
selling additional Notes. In order to correct this oversight, the Fund is
seeking to expand the Section of the Indenture which allows certain
amendments and supplements to the Indenture or the Notes to be made without
the consent of Noteholders by adding the following sub-section to Section
10.01 (Without Consent of Holders) at the end thereof:
<PAGE>
"The Fund and the Trustee may amend or supplement this Indenture or the
Securities without notice to or consent of any Securityholder ...
"(e) to provide for the issuance and sale by the Fund, at any time or
from time to time, of Securities in addition to the $40,000,000 aggregate
principal amount of Securities issued and sold by the Fund on or about June
22, 1994, subject to and in compliance with the 500% asset coverage test of
Section 5.12 and, if then applicable, Section 11.05, provided that (i) all
such additional Securities shall be issued and sold to the initial Holders
thereof for a price equal to the principal amount thereof, (ii) all such
Securities shall be dated as of the date on which they are issued and sold by
the Fund to the initial Holders thereof and (iii) all of such Holders shall,
concurrently with their purchase of such Securities, pay to the Fund an
amount equal to interest accrued thereon from the then most recent date on
which interest on the Securities was paid by the Fund through the day
immediately preceding the day on which such Securities are issued and sold to
them."
If Noteholders approve this amendment, any additional Notes would be
issued in a public offering for cash.
Vote Required
Under Section 10.02 of the Indenture, the written consent of the holders
of a majority in principal amount of the Notes outstanding as of October 11,
1995, the record date, is required to approve each of the amendments. As
indicated above, the Fund may, under and subject to the limitations of
Section 5.12 of the Indenture, incur indebtedness in addition to the Notes
even if Noteholders fail to approve the second amendment.
Noteholders at the close of business on the record date will be entitled
to one vote for each $1,000 principal amount of the Notes then held. The
proposed amendments will be deemed to have been approved when the Fund has
received the written consent to the proposed amendments from Noteholders
representing a majority in principal amount of the outstanding Notes. The
Fund and the Trustees will execute and deliver a Supplemental Indenture
setting forth the amendments as soon as practicable after their approval.
ADDITIONAL INFORMATION
Quest Advisory Corp., located at 1414 Avenue of the Americas, New York,
New York 10019, serves as the Fund's investment adviser.
The Fund's Annual Report to Stockholders for the year ended December 31,
1994 was previously mailed to Noteholders, and copies of it are available
upon request, without charge, by writing to the Fund at 1414 Avenue of the
Americas, New York, New York 10019 or calling toll-free at 1-800-221-4268.
<PAGE>
The cost of soliciting consents will be borne by the Fund, which will
reimburse brokerage firms, custodians, nominees and fiduciaries for their
expenses in forwarding the consent solici- tations to the beneficial owners
of the Notes. Some officers and employees of the Fund, Quest Advisory Corp.
and/or Shareholder Communications Corporation may solicit consents personally
and by telephone, if deemed desirable.
PLEASE FILL IN, DATE AND SIGN THE WRITTEN CONSENT AND RETURN IT IN THE
ACCOMPANYING POSTAGE-PAID ENVELOPE.
<PAGE>
ROYCE VALUE TRUST, INC.
1414 Avenue of the Americas
New York, NY 10019
WRITTEN CONSENT
This Written Consent is solicited on behalf of the Board of Directors. You
are asked below to vote either "YES", to approve, or "NO", to not approve,
the amendments (the "Amendments") set forth in the Consent Solicitation
Statement of the Fund dated October 12, 1995. Approval of each of the
Amendments requires the consent of the holders of a majority in aggregate
principal amount of the outstanding Notes.
1. AMENDMENT TO SECTION 10.01 OF THE INDENTURE
(Issuance and Sale of Additional Notes)
FOR AGAINST ABSTAIN
2. AMENDMENT TO SECTION 1.01 OF THE INDENTURE
(Increasing December Conversion Period)
FOR AGAINST ABSTAIN
(Continued on other side)
<PAGE>
(Continued from other side)
This Written Consent when properly executed will be voted in the manner
directed by the undersigned Noteholder. If no direction is made, this
Written Consent will be voted for Proposals 1 and 2. Please sign exactly as
name appears below. When Notes are held by joint tenants, both should sign.
When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such. If a corporation, please sign in full
corporate name by president or other authorized officer. If a partnership,
please sign in partnership name by authorized person.
DATED:____________________, 1995
_________________________________________
Signature
____________________________________________
PLEASE MARK, SIGN AND RETURN THE WRITTEN CONSENT
PROMPTLY, USING THE ENCLOSED ENVELOPE
______________________________________________________
Signature if held jointly
<PAGE>
Royce Value Trust, Inc.
1414 Avenue of the Americas
New York, NY 10019
(212) 355-7311
October 20, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Royce Value Trust, Inc.
File No. 811-4875
Gentlemen:
Enclosed for filing pursuant to Rule 14a-6 under the Securities Exchange
Act of 1934, as amended, are the definitive copies of the Consent
Solicitation Statement and the form of Written Consent being sent to holders
of the 5 3/4% Investment Company Convertible Notes due June 30, 2004 (the
"Notes") of Royce Value Trust, Inc. (the "Fund") to be held on June 28,
1995.
The enclosed materials were sent to Noteholders of record on October 16
through October 20, 1995.
Sincerely,
Susan I. Grant
Susan I. Grant
Secretary
SIG:am
C:\WPWIN\QUEST\RVT\DFPX-SEC.LTR
Enclosures
