PROSPECTUS MAY 31, 2000
PRUDENTIAL
INSTITUTIONAL LIQUIDITY PORTFOLIO, INC.
INSTITUTIONAL MONEY MARKET SERIES
(CLASS A SHARES)
FUND TYPE Money market
OBJECTIVE High current income consistent with the preservation to principal and
liquidity
BUILD
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ON THE ROCK
As with all mutual funds, the Securities and
Exchange Commission has not approved or
disapproved the Fund's shares nor has the
SEC determined that this prospectus is
complete or accurate. It is a criminal offense
to state otherwise.
[LOGO] PRUDENTIAL
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Table of Contents
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1 RISK/RETURN SUMMARY
1 Investment Objective and Principal Strategies
1 Principal Risks
2 Evaluating Performance
3 Fees and Expenses
5 HOW THE FUND INVESTS
5 Investment Objective and Policies
7 Other Investments and Strategies
8 Rating of Fund Shares
9 Investment Risks
10 HOW THE FUND IS MANAGED
10 Board of Directors
10 Manager
10 Investment Adviser
10 Distributor
12 Fund Distributions and Tax Issues
12 Distributions
12 Tax Issues
14 HOW TO BUY AND SELL SHARES OF THE FUND
14 How to Buy Shares
17 How to Sell Your Shares
20 Financial Highlights
22 The Prudential Mutual Fund Family
For More Information (Back Cover)
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Prudential Institutional Liquidity Portfolio, Inc. (telephone)(800) 521-7466
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Risk/Return Summary
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MONEY MARKET FUNDS
Money market funds--which hold high-quality short-term debt obligations--provide
investors with a lower risk, highly liquid investment option. These funds
attempt to maintain a net asset value of $1 per share, although there can be no
guarantee that they will always be able to do so.
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This section highlights key information about PRUDENTIAL INSTITUTIONAL LIQUIDITY
PORTFOLIO, INC.-INSTITUTIONAL MONEY MARKET SERIES, which we refer to as "the
Fund." The Fund offers Class A shares and Class I shares. This prospectus
relates only to Class A shares. Additional information follows this summary.
INVESTMENT OBJECTIVE AND PRINCIPAL STRATEGIES
Our investment objective is HIGH CURRENT INCOME CONSISTENT WITH THE PRESERVATION
OF PRINCIPAL AND LIQUIDITY. To achieve this objective we invest at least 80% of
the Fund's assets in short-term money market instruments such as obligations
issued by the U.S. Government, commercial paper, asset-backed securities,
funding agreements, variable rate demand notes, bills, notes and other
obligations issued by banks, corporations and other companies, and obligations
issued by foreign banks, foreign companies or foreign governments. The Fund will
invest only in instruments with remaining maturities of thirteen months or less
and which are denominated in U.S. dollars. The Fund may invest in longer-term
securities that are accompanied by demand features which will shorten the
effective maturity of the securities to thirteen months or less. While we make
every effort to achieve our objective and maintain a net asset value of $1 per
share, we can't guarantee success. To date, the Fund's net asset value has never
deviated from $1 per share.
PRINCIPAL RISKS
Although we try to invest wisely, all investments involve risk. Since the Fund
invests in debt obligations, there is the risk that the value of a particular
obligation could go down. Debt obligations are generally subject to CREDIT
RISK--the risk that the issuer of a particular security may be unable to make
principal and interest payments when they are due, and MARKET RISK--the risk
that the securities could lose value because interest rates change or investors
lose confidence in the ability of issuers in general to pay back their debt.
With respect to the Fund's investments in asset-backed securities, there is a
risk of prepayment, which means that if the underlying obligations are paid
before they are due, the security may discontinue paying an attractive rate of
income.
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RISK/RETURN SUMMARY
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The Fund's investment in foreign securities involves additional risks. For
example, foreign banks and companies generally are not subject to regulatory
requirements comparable to those applicable to U.S. banks and companies. In
addition, political developments and changes in currency rates may adversely
affect the value of foreign securities. In all cases, however, we invest only in
U.S. dollar-denominated securities.
There is also a risk that we will sell a security for a price that is
higher or lower than the value attributed to the security through the amortized
cost valuation procedures we follow. Such an event could affect our ability to
maintain a net asset value of $1 per share.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although the Fund seeks to preserve the value of an investment at $1 per
share, it is possible to lose money by investing in the Fund.
EVALUATING PERFORMANCE
A number of factors--including risk--can affect how the Fund performs. The
following bar chart shows the Fund's performance for each full calendar year of
operation for the last 10 years. The tables below compare the Fund's average
annual returns and yield for the periods indicated with those of a group of
similar funds. The bar chart and tables demonstrate the risk of investing in the
Fund by showing how returns can change. Past performance is not an indication
that the Fund will achieve similar results in the future. For current yield
information, you can call us at (800) 521-7466.
Annual Returns(1) (Class A shares)
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[REPRESENTATION OF CHART GOES HERE]
1990 8.19%
1991 6.23%
1992 3.77%
1993 2.94%
1994 4.01%
1995 5.82%
1996 5.18%
1997 5.50%
1998 5.56%
1999 5.26%
Best Quarter: 2.00% (2nd quarter of 1990)
Worst Quarter: 0.71% (3rd quarter of 1993)
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(1) The Fund's returns are after deduction of expenses. The total return of the
Class A shares from 1-1-00 to 3-31-00 was 1.33%.
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2 Prudential Institutional Liquidity Portfolio, Inc. (telephone)(800) 521-7466
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Average Annual Returns(1) (as of 12/31/99)
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1 YEAR 5 YEARS 10 YEARS
Class A shares 5.26% 5.47% 5.24%
Lipper Average (2) 4.92% 5.32% 5.15%
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7-Day Yield (1) (as of 3/31/00)
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Class A shares 5.96%
iMoneyNet, Inc. Average(3) 5.65%
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(1) The Fund's returns and yield are after deduction of expenses.
(2) The Lipper Average is based upon the average return of all mutual funds in
the Institutional Money Market Funds category.
(3) The iMoneyNet, Inc. Average is based upon the average yield of all mutual
funds in the all taxable money market fund category.
FEES AND EXPENSES
These tables show the fees and expenses that you may pay if you buy and hold
shares of the Fund.
Shareholder Fees (paid directly from your investment)
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CLASS A
Maximum sales charge (load) None
imposed on purchases (as a
percentage of offering price)
Maximum deferred sales charge None
(load) (as a percentage of
the lower of original
purchase price or sale
proceeds)
Maximum sales charge (load) None
imposed on reinvested
dividends
and other distributions
Redemption fees None
Exchange fee None
COMMAND Program annual fee(1) $125(2)
BusinessEdge Program annual fee(1) $175(2)
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RISK/RETURN SUMMARY
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Annual Fund Operating Expenses (deducted from Fund assets)
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CLASS A
Management fees .20%
+ Distribution and service (12b-1) fees .12%
+ Other expenses .06%
= TOTAL ANNUAL FUND OPERATING EXPENSES .38%
- Fee waiver and expense reimbursement(3) .18%
= NET ANNUAL FUND OPERATING EXPENSES .20%
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(1) COMMAND and BusinessEdge are financial services programs available through
Prudential Securities Incorporated and/or Pruco Securities Corporation. For
more information, you should consult a Prudential Securities Financial
Advisor or a Pruco Securities Preferred Agent.
(2) The annual program fee as a percentage of average net assets is .02% and
.03% for the COMMAND and BusinessEdge Programs, respectively, and is
calculated by dividing $125 (the total fee for the COMMAND Program) or $185
(the total for the BusinessEdge Program), respectively, by the average
account size in the Fund. The annual program fee is not prorated for
purposes of this calculation to give effect to COMMAND Program or
BusinessEdge Program participants who also own shares in or subscribe to
various services offered by the respective Programs. A major portion of the
annual program fee is not attributable to the Fund, but rather to nonfund
services provided by the Program.
(3) For the fiscal year ending March 31, 2001, the Distributor of the Fund has
contractually agreed to waive a portion of its fees in the amount of .07%
of the average daily net assets of Class A shares, and the Manager has
contractually agreed to reimburse the Fund for operating expenses,
exclusive of distribution and service (12b-1) fees, in excess of .15% of
the average daily net assets of Class A shares.
EXAMPLE
This example will help you compare the cost of investing in the Fund with the
cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the Fund for the time
periods indicated and then sell all of your shares at the end of those periods.
The example also assumes that your investment has a 5% return each year and that
the Fund's operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions, your costs would be:
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1 YR 3 YRS 5 YRS 10 Yrs
Class A shares(1) $20 $104 $195 $463
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(1) The example reflects the agreement of the Distributor to waive a portion of
its fee and the agreement of the Manager to reimburse certain operating
expenses of Class A shares for the fiscal year ending March 31, 2001. The
Manager and the Distributor have not advised the Fund of their respective
intention to discontinue the waivers and/or reimbursements for subsequent
fiscal years. The 3-year, 5-year and 10-year costs only reflect the 1-year
waiver and reimbursement.
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4 Prudential Institutional Liquidity Portfolio, Inc. (telephone)(800) 521-7466
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How the Fund Invests
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INVESTMENT OBJECTIVE AND POLICIES
The Fund's investment objective is HIGH CURRENT INCOME CONSISTENT WITH THE
PRESERVATION OF PRINCIPAL AND LIQUIDITY. While we make every effort to achieve
our objective, we can't guarantee success.
The Fund invests in a diversified portfolio of short-term debt obligations
which include, but are not limited to, obligations issued by the U.S.
Government, its agencies and instrumentalities, as well as commercial paper,
asset-backed securities, funding agreements, variable rate demand notes, bills,
notes and other obligations issued by banks, corporations and other companies
(including trust structures), obligations issued by foreign banks, foreign
companies or foreign governments, and municipal notes.
The Fund invests in high-quality money market instruments to try to provide
investors with current income while maintaining a stable net asset value of $1
per share. We manage the Fund to comply with specific rules designed for money
market mutual funds. This means that we manage the Fund's portfolio to comply
with the requirements of Rule 2a-7 under the Investment Company Act of 1940 (the
Investment Company Act). As such, we will not acquire any security with a
remaining maturity exceeding thirteen months, and we will maintain a
dollar-weighted average portfolio of 90 days or less. In addition, we will
comply with the diversification, quality and other requirements of Rule 2a-7.
This means, generally, that the instruments we purchase present "minimal credit
risk" and are of "eligible quality." "Eligible quality" for this purpose means a
security: (i) rated in one of the two highest short-term rating categories by at
least two nationally recognized statistical rating organizations (NRSROs) or, if
only one NRSRO has rated the security, so rated by that NRSRO; (ii) rated in one
of the three highest long-term rating categories by at least two NRSROs or, if
only one NRSRO has rated the security, so rated by that NRSRO; or (iii) if
unrated, of comparable quality as determined by the Fund's investment adviser.
All securities that we purchase will be denominated in U.S. dollars but may be
issued by a foreign issuer.
COMMERCIAL PAPER is short-term debt obligations of banks, corporations and
other borrowers. The obligations are usually issued by financially strong
businesses and often include a line of credit to protect purchasers of the
obligations. An ASSET-BACKED SECURITY is a loan or note that pays interest based
upon the cash flow of a pool of assets, such as mortgages, loans and credit card
receivables. CERTIFICATES OF DEPOSIT, TIME DEPOSITS, BANKERS' ACCEPTANCES and
BANK NOTES are obligations issued by or through a bank. These instruments depend
upon the strength of the bank involved in the borrowing to give inves-
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How the Fund Invests
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tors comfort that the borrowing will be repaid when promised. FUNDING AGREEMENTS
are contracts issued by insurance companies that guarantee a return of
principal, plus some amount of interest. When purchased by money market funds,
funding agreements will typically be short-term and will provide an adjustable
rate of interest.
DEBT OBLIGATIONS in general, including those listed above and any others that
we may purchase, are basically written promises to repay a debt. Among the
various types of debt securities we may purchase, the terms of repayment may
vary, as may the commitment of other parties to honor the obligations of the
issuer of the security. We may purchase securities that include DEMAND FEATURES,
which allow us to demand repayment of a debt obligation before the obligation is
due or "matures." This means that we can purchase longer-term securities because
we can demand repayment of the obligation at an agreed-upon price within a
relatively short period of time. This procedure follows the rules applicable to
money market funds.
FOREIGN SECURITIES and foreign markets involve additional risk. Laws and
accounting standards typically are not as strict in foreign countries as they
are in the U.S. Foreign fixed income and currency markets may be less stable
than those in U.S. markets. Changes in the exchange rates of foreign currencies
can affect the value of foreign assets.
Any of the money market instruments that the Fund may purchase may be
accompanied with the right to resell the instrument prior to the instrument's
maturity. In addition, we may separately purchase rights to resell these
instruments. These rights are referred to as "PUTS" and are acquired by the Fund
to protect against a possible decline in the market value of the securities to
which the puts relate in the event of interest rate fluctuations, to shorten the
effective maturity of the security and to provide the Fund with liquidity to
meet share-holder redemption requests.
The securities that we may purchase may change over time as new types of
money market instruments are developed. We will purchase these new instruments,
however, only if their characteristics and features follow the rules governing
the operation of money market funds.
Our investment objective is a fundamental policy that cannot be changed
without shareholder approval. The Board of Directors of the Fund can change
investment policies that are not fundamental.
For more information, see "Investment Risks" below and the Statement of
Additional Information, "Description of the Fund, its Investments and Risks."
The Statement of Additional Information--which we refer to as the SAI--con-
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6 Prudential Institutional Liquidity Portfolio, Inc. (telephone)(800) 521-7466
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How the Fund Invests
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tains additional information about the Fund. To obtain a copy, see the back
cover of this prospectus.
OTHER INVESTMENTS AND STRATEGIES
While the Fund invests principally in the securities described above, it
may invest in other securities or use certain investment strategies to increase
returns or protect its assets, if market conditions warrant.
The Fund intends to participate in one or more JOINT TRADING ACCOUNTS
whereby the Fund, along with other investment companies managed by Prudential
Investments Fund Management LLC, will jointly engage in repurchase agreements
and, subject to the issuance of an order by the Securities and Exchange
Commission, jointly purchase money market instruments. The ability of the Fund
to participate in these joint trading accounts will be conditioned upon
requirements imposed by such order, which may be amended from time to time.
The Fund may also invest in other DEBT OBLIGATIONS ISSUED OR GUARANTEED BY
THE U.S. GOVERNMENT and government-related entities. Some of these debt
securities are backed by the full faith and credit of the U.S. Government, like
obligations of the Government National Mortgage Association (GNMA or "Ginnie
Mae"). Debt securities issued by other government entities, like obligations of
the Federal National Mortgage Association (FNMA or "Fannie Mae") and the Student
Loan Marketing Association (SLMA or "Sallie Mae"), are not backed by the full
faith and credit of the U.S. Government. However, these issuers have the right
to borrow from the U.S. Treasury to meet their obligations. The debt securities
of other issuers, like the Farm Credit System, depend entirely upon their own
resources to repay their debt.
The Fund may also use REPURCHASE AGREEMENTS, where a party agrees to sell a
security to the Fund and then repurchase it at an agreed-upon price at a stated
time. These transactions constitute short-term cash loans by the Fund to
financial institutions. This creates a fixed return for the Fund.
The Fund may use REVERSE REPURCHASE AGREEMENTS, where we borrow money on a
temporary basis by selling a security with an obligation to repurchase it at an
agreed-upon price and time. The Fund's use of reverse repurchase agreements is
limited to 15% of the value of its total assets.
The Fund may also purchase money market obligations on a "WHEN-ISSUED" or
"DELAYED-DELIVERY" basis. When the Fund makes this type of purchase, the price
and interest rate are fixed at the time of purchase, but delivery
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How the Fund Invests
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of and payment for the obligations take place at a later time. The Fund does not
earn interest income until the date the obligations are delivered.
The Fund may purchase FLOATING RATE and VARIABLE RATE securities. These
securities pay interest at rates that change periodically to reflect changes in
market interest rates. Because these securities adjust the interest they pay,
they may be beneficial when interest rates are rising because of the additional
return the Fund will receive, and they may be detrimental when interest rates
are falling because of the reduction in interest payments to the Fund.
The Fund also follows certain policies when it BORROWS MONEY (the Fund may
borrow up to 15% of the value of its net assets); lends its securities to others
(the Fund may lend up to 15% of its total assets, including collateral received
in the transaction); and HOLDS ILLIQUID SECURITIES (the Fund may hold up to 10%
of its net assets in illiquid securities, including securities with legal or
contractual restrictions, those without a readily available market, privately
placed commercial paper and repurchase agreements with maturities longer than
seven days). The Fund is subject to certain investment restrictions that are
fundamental policies, which means they cannot be changed without shareholder
approval. For more information about these restrictions, see the SAI.
RATING OF FUND SHARES
Duff & Phelps Credit Rating Co. or its successors (DCR) has given the Fund
an AAA rating. According to DCR, the AAA rating means the Fund's ability to meet
redemption requests in a timely manner for $1.00 per share is strong. This
rating is based on the Fund's risk management procedures, internal control
systems, limitations on market risk and experienced management team.
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8 Prudential Institutional Liquidity Portfolio, Inc. (telephone)(800) 521-7466
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How the Fund Invests
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INVESTMENT RISKS
As noted, all investments involve risk, and investing in the Fund is no
exception. This chart outlines the key risks and potential rewards of the
principal strategies and certain other investments of the Fund. See, too,
"Description of the Fund, its Investments and Risks" in the SAI.
Investment Type
% of Fund's Total Assets Risks Potential Rewards
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HIGH-QUALITY MONEY o Credit risk--the o A source of
MARKET OBLIGATIONS risk that default of regular interest
an issuer would income
leave the Fund with
unpaid interest or o May be more secure
principal than stock and other
Up to 100% equity securities
o Market risk--the since companies must
risk that bonds and pay their debts
other debt before they pay
instruments may lose dividends
value because
interest rates
change or there is a
lack of confidence
in a group of
borrowers or in an
industry
MONEY MARKET o Foreign markets, o Investors may
OBLIGATIONS OF economies and realize higher
FOREIGN ISSUERS (U.S. political systems returns based upon
DOLLAR-DENOMINATED) may not be as stable higher interest
as those in the U.S. rates paid on
foreign investments
Up to 100%
o Differences in o Increased
foreign laws, diversification by
accounting expanding the
standards, public allowable choices of
information and high- quality debt
custody and securities
settlement practices
ILLIQUID SECURITIES o May be difficult o May offer a more
to value precisely attractive yield
Up to 10% of net assets than more widely
o May be difficult to traded securities
sell at the time or
price desired
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How the Fund is Managed
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BOARD OF DIRECTORS
The Fund's Board of Directors oversees the actions of the Manager, Investment
Adviser and Distributor and decides on general policies. The Board also oversees
the Fund's officers, who conduct and supervise the daily business operations of
the Fund.
MANAGER
PRUDENTIAL INVESTMENTS FUND MANAGEMENT LLC (PIFM)
GATEWAY CENTER THREE, 100 MULBERRY STREET
NEWARK, NEW JERSEY 07102-4077
Under a management agreement with the Fund, PIFM manages the Fund's
investment operations and administers its business affairs. For the fiscal year
ended March 31, 2000, the Fund paid PIFM management fees, net of waiver, of .15%
of the Fund's average net assets.
As of March 31, 2000, PIFM served as the Manager to all 45 of the
Prudential Mutual Funds, and as Manager or administrator to 22 closed-end
investment companies, with aggregate assets of approximately $78 billion.
INVESTMENT ADVISER
The Prudential Investment Corporation, called Prudential Investments, is the
Fund's investment adviser and has served as an investment adviser to investment
companies since 1984. Its address is Prudential Plaza, 751 Broad Street, Newark,
NJ 07102. PIFM has responsibility for all investment advisory services,
supervises Prudential Investments and pays Prudential Investments for its
services.
Prudential Investments Fixed Income Group is organized into teams that
specialize by sector. The Fixed Income Investment Policy Committee, which is
comprised of senior investment staff from each sector team, provides guidance to
the teams regarding duration risk, asset allocations and general risk
parameters. Portfolio managers contribute bottom up security selection within
those guidelines.
DISTRIBUTOR
Prudential Investment Management Services LLC (PIMS) distributes the Fund's
shares under a Distribution Agreement with the Fund. The Fund has a Distribution
and Service Plan (the Plan) under Rule 12b-1 of the Investment
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How the Fund is Managed
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Company Act with respect to Class A shares. Under the Plan and the Distribution
Agreement, PIMS pays the expenses of distributing the Fund's Class A shares and
provides certain shareholder support services. The Fund pays distribution and
other fees from the assets of Class A shares to PIMS as reimbursement to PIMS
for its services. These fees--known as 12b-1 fees--are shown in the "Fees and
Expenses" table. Because these fees are paid from the Fund's assets on a
continuous basis, over time these fees will increase the cost of your investment
and may cost you more than paying other types of sales charges. PIMS does not
receive compensation from the Fund for distributing the Fund's Class I shares.
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Fund Distributions and Tax Issues
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Investors who buy shares of the Fund should be aware of some important tax
issues. For example, the Fund distributes DIVIDENDS of ordinary income and any
realized net CAPITAL GAINS to shareholders. These distributions are subject to
taxes, unless you hold your shares in a 401(k) plan, an Individual Retirement
Account (IRA), or some other qualified or tax-deferred plan or account.
The following briefly discusses some of the important tax issues you should
be aware of, but is not meant to be tax advice. For tax advice, please speak
with your tax adviser.
DISTRIBUTIONS
The Fund distributes DIVIDENDS of any net investment income to shareholders
every month. The dividends you receive from the Fund will be taxed as ORDINARY
INCOME, whether or not they are reinvested in the Fund.
Although the Fund is not likely to realize capital gains because of the
types of securities we purchase, any realized net CAPITAL GAINS will be paid to
shareholders (typically once a year). Capital gains are generated when the Fund
sells assets for a profit.
For your convenience, Fund distributions of dividends and capital gains are
automatically reinvested in the Fund. If you ask us to pay the distributions in
cash, we will wire the distribution to your bank account instead of purchasing
more shares of the Fund. Either way, the distributions are subject to taxes,
unless your shares are held in a qualified or tax-deferred plan or account. For
more information about automatic reinvestment and other shareholder services,
see "How to Buy, Sell and Exchange Shares of the Fund--How To Buy Shares" at
Step 4: Additional Shareholder Services.
TAX ISSUES
FORM 1099
Every year, you will receive a Form 1099, which reports the amount of dividends
and capital gains we distributed to you during the prior year. If you own shares
of the Fund as part of a qualified or tax-deferred plan or account, your taxes
are deferred, so you will not receive a Form 1099. However, you will receive a
Form 1099 when you take any distributions from your qualified or tax-deferred
plan or account.
Fund distributions are generally taxable in the year they are received,
except where we declare certain dividends in December of a calendar year but
actually pay them in January of the following year. In such cases, the dividends
are treated as if they were paid on December 31 of the prior year.
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12 Prudential Institutional Liquidity Portfolio, Inc. telephone)(800) 521-7466
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[LOGO] PRUDENTIAL PRUDENTIAL INSTITUTIONAL LIQUIDITY
PORTFOLIO, INC.
NEW ACCOUNT APPLICATION
PRUDENTIAL MUTUAL FUND SERVICES LLC
Attn: Institutional Service Division
PO Box 15030
New Brunswick, NJ 08906
Contact us at (800) 521-7466
(8:00 a.m.-5:00 p.m. New York
PLEASE PRINT USING BLUE OR BLACK INK. time) or by fax (732) 482-2666.
<TABLE>
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<S> <C>
INSTRUCTIONS Use this Application to establish an account in Prudential Institutional Liquidity Portfolio, Inc. Please
complete all relevant information. Missing information could result in delays in processing your
Application. Refer to the prospectus for investment minimums and other important information about your
account.
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1 FUND PRUDENTIAL INSTITUTIONAL LIQUIDITY PORTFOLIO, INC. (PILP) - Institutional Money Market Series
SELECTION (Fund #52, PIMMS)(Fund#597, PIMMI)
Account Number (to be assigned by the Fund)
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|__| Class A Shares ($100,000 minimum initial |__| Class I Shares ($5 million minimum initial
investment) investment)
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2 ACCOUNT Print account ownership information exactly as it should appear on your account statement.
REGISTRATION
Name of Account Line 1
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Name of Account Line 2
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Street
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City State ZIP Code
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Telephone Number Tax ID Number (Soc, Sec. or EIN)
(|__|__|__|) |__|__|__| - |__|__|__|__| |__|__|__|__|__|__|__|__|__|__|__|
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3 DUPLICATE Please send a duplicate confirmation to the following:
CONFIRMATION
Name of Firm
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Attention
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Address
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City State ZIP Code
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4 YOUR This section to be completed by your Prudential professional, if applicable.
PRUDENTIAL
PROFESSIONAL Name
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Telephone Number Prudential Securities FA
Branch Ledger Number
(|__|__|__|) |__|__|__| - |__|__|__|__| |__|__|__| |__|__|
====================================================================================================================================
DEFKA70 [BAR CODE]
MF137F Ed. 6/2000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
<S> <C>
5 AUTHORI- Check box if applicable: |__| We authorize the following Prudential professional to act as our agent with
ZATION respect to this account:
Representative Name
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
X
----------------------------------------------------------------------------------------------------
Shareholder's Signature
====================================================================================================================================
6 DIVIDEND If no box is checked, dividends will be automatically reinvested. |__| Pay dividends in cash
DISTRIBUTION
OPTION |__| Reinvest dividends |__| Pay via Wire (wire takes 2 to 3 business days after dividend is paid).
in additional shares You must complete the Wire Instructions in Section 7. If dividend
distribution instructions are different from Expedited Redemption
instructions, please provide separately.
====================================================================================================================================
7 EXPEDITED All redemption proceeds will be sent to either the bank or the Prudential Securities account listed below
REDEMPTIONS (not both). PILP's records of these instructions are binding on all parties and neither PILP nor Prudential
Mutual Fund Services LLC will be liable for any loss, expense or cost arising out of such transactions. All
revisions to these instructions must be signature guaranteed.
|__| COMMERCIAL BANK
Account Name
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
Bank Name
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
Address
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
City State ZIP Code
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__| |__|__| |__|__|__|__|__| - |__|__|__|__|
Account Number Bank Routing Number
-------------------------------------------------------------------------------------------------
|__| PRUDENTIAL SECURITIES ACCOUNT
Account Name: Prudential Securities Bank Name: Chase Manhattan Bank
Account No.: 066296390 Bank Routing No.: 021-0000-21
FOR FURTHER CREDIT TO:
Account Name
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
Account Number
|__|__|__| - |__|__|__|__|__|__| - |__| - |__|__|
====================================================================================================================================
8 REQUIRED The undersigned represent and warrant that they have full right, power and authority to make the investment
SIGNATURE(S) applied for pursuant to this Application. If the persons signing are doing so on behalf of a beneficial
owner, they represent and warrant that they are duly authorized to sign this Application and to purchase or
redeem shares of the Fund on behalf of the beneficial owner. Additional authorized signatories can be
provided on an attachment with signature, name and title. The undersigned hereby affirm receipt of a
current Fund prospectus and certify under penalty of perjury that: (1) the number shown above is the
correct taxpayer identification number, and (2) there has been no notification that this account is subject
to backup withholding.
|__| Please check here if there has been notification of backup withholding.
X | | | |
------------------------------------------------------------------------ |__|__|__|__|__|__|__|__|
Signature Corporate Officer/Title (if applicable) Date (month, day, year)
X | | | |
------------------------------------------------------------------------ |__|__|__|__|__|__|__|__|
Signature Corporate Officer/Title (if applicable) Date (month, day, year)
====================================================================================================================================
PLEASE NOTE: MAIL TO: Prudential Mutual Fund Services LLC BY WIRE: State Street Bank, ABA Routing
FINANCIAL Attn: Institutional Service Division Number: 0110-0002-8
TRANSACTIONS ARE PO Box 15030 Attention: PRU 8600 GRP
ACCEPTED UNTIL New Brunswick, NJ 08906 Re: PILP
4:00 P.M. (NEW Name of Fund: Institutional Money Market
YORK TIME) OVERNIGHT: Prudential Mutual Fund Services LLC Series
Attn: PILP Unit, 3rd floor DDA Number: 99034100
194 Wood Avenue South
Iselin, NJ 08830 Account Registration
----------------------
MF137F Ed. 6/2000 Account Number
----------------------------
====================================================================================================================================
</TABLE>
<PAGE>
WITHHOLDING TAXES
If federal law requires you to provide the Fund with your tax identification
number and certifications as to your tax status, and if you fail to do so, or if
you are otherwise subject to back-up withholding, we will withhold and pay to
the U.S. Treasury 31% of your distributions. Dividends of net investment income
and short-term capital gains paid to a nonresident foreign shareholder generally
will be subject to a U.S. withholding tax of 30%. This rate may be lower,
depending on any tax treaty the U.S. may have with the shareholder's country.
--------------------------------------------------------------------------------
13
<PAGE>
How to Buy and Sell
--------------------------------------------------------------------------------
Shares of the Fund
--------------------------------------------------------------------------------
HOW TO BUY SHARES
STEP 1: OPEN AN ACCOUNT
If you don't have an account with us or a securities firm that is permitted to
buy or sell shares of the Fund for you, call Prudential Mutual Fund Services LLC
(PMFS), the Fund's Transfer Agent, at (800) 521-7466 or contact:
PRUDENTIAL MUTUAL FUND SERVICES LLC
ATTN: INSTITUTIONAL SERVICE DIVISION
P.O. BOX 15030
NEW BRUNSWICK, NJ 08906
After you have established an account, all purchases of Class A shares must
be made via wire transfer of funds to State Street Bank and Trust Company,
Boston, Massachusetts, the Fund's custodian (the Custodian). We have the right
to reject any purchase order (including an exchange into the Fund) or suspend or
modify the Fund's sale of its shares.
STEP 2: CHOOSE A SHARE CLASS
The Fund offers Class A and Class I shares. Except as noted below, the minimum
initial investment for Class A shares is $100,000 and the minimum subsequent
investment is $10,000. The minimum initial investment for Class I shares is $5
million and the minimum subsequent investment is $10,000. This prospectus only
describes how you can buy and sell Class A shares of the Fund. If you qualify to
purchase Class I shares, you should contact PMFS at the telephone number or
address above to request a Class I shares Fund prospectus. Class A shareholders
of the Fund who qualify to purchase Class I shares will have their Class A
shares exchanged for Class I shares on a quarterly basis. We have obtained a
legal opinion that this exchange is not a "taxable event for federal income tax
propses. This opinion is not binding on the IRS. For purposes of the minimum
initial and subsequent investment requirements, a master account and its
subaccounts, as well as related institutional accounts (that is, accounts of
shareholders with a common institutional or corporate parent), may be combined.
PURCHASES THROUGH THE COMMAND PROGRAM OR THE BUSINESSEDGE PROGRAM Class A shares
of the Fund are available to shareholders who meet the minimum investment
requirements and participate in either the corporate COMMAND(sm) Account Program
(the COMMAND Program), which is available through Prudential Securities
Incorporated (Prudential Securities), or the Prudential BusinessEdge(sm) Account
Program (the BusinessEdge Program),
--------------------------------------------------------------------------------
14 Prudential Institutional Liquidity Portfolio, Inc. (telephone)(800) 521-7466
<PAGE>
How to Buy and Sell
--------------------------------------------------------------------------------
Shares of the Fund
--------------------------------------------------------------------------------
which is available either through Prudential Securities or Pruco Securities
Corporation (Prusec). These programs offer integrated financial services that
link together various product components with the ability to invest in shares of
the Fund. If you participate in the COMMAND Program or the BusinessEdge Program,
your purchase of Class A shares must be made through your Prudential Securities
Financial Advisor or your Prusec broker, as applicable.
STEP 3: UNDERSTANDING THE PRICE YOU'LL PAY
When you invest in a mutual fund, you buy shares of the Fund. Shares of a money
market mutual fund, like the Fund, are priced differently than shares of common
stock and other securities.
The price you pay for each share of the Fund is based on the share value.
The share value of a mutual fund--known as the net asset value or NAV--is
determined by a simple calculation: it's the total value of the Fund (assets
minus liabilities) divided by the total number of shares outstanding. In
determining NAV, the Fund values its securities using the amortized cost method.
The Fund seeks to maintain an NAV of $1 per share at all times.
We determine the NAV of our shares once each business day at 4:00 p.m., New
York time, on days that the New York Stock Exchange is open for trading. We do
not determine NAV on days when we have not received any orders to purchase,
sell, or exchange or when changes in the value of the Fund's portfolio do not
affect the NAV.
If your purchase order for Class A shares is received by PMFS by calling
(800) 521-7466 before 4:00 p.m., New York time, and federal funds are received
by the Custodian by wire transfer on the same business day, your purchase order
becomes effective as of 4:00 p.m., New York time, and the shares you purchase
are entitled to dividend income earned on that day. Telephone calls to PMFS will
be recorded. In order to make investments that will generate income immediately,
the Fund must have federal funds available to it. Therefore, you are urged to
wire funds to the Custodian via the Federal Reserve Wire System as early in the
day as possible.
If you participate in the COMMAND Program or the BusinessEdge Program, you
must submit your purchase order to your Prudential Securities Financial Advisor
or Prusec broker, as applicable, by 2:00 p.m., New York time. The Prudential
Securities Financial Advisor or Prusec broker will submit your order to the Fund
for Class A shares and will arrange for the transfer of federal funds from your
Program account to the Custodian. If your purchase
--------------------------------------------------------------------------------
15
<PAGE>
How to Buy and Sell
--------------------------------------------------------------------------------
Shares of the Fund
--------------------------------------------------------------------------------
order is received by 2:00 p.m., New York time, the shares you purchase are
entitled to dividend income earned on that day.
STEP 4: ADDITIONAL SHAREHOLDER SERVICES
As a Fund shareholder, you can take advantage of the following services and
privileges:
Automatic Reinvestment. As we explained in the "Fund Distributions and Tax
Issues" section, the Fund pays out--or distributes--its net investment income
and capital gains to all shareholders. For your convenience, we will
automatically reinvest your distributions in the Fund at NAV. If you want your
distributions paid in cash (via wire transfer to your bank account), you can
indicate this preference on your application or notify the Transfer Agent in
writing (at the address below) at least five business days before the date we
determine who receives dividends.
PRUDENTIAL MUTUAL FUND SERVICES LLC
ATTN: INSTITUTIONAL SERVICE DIVISION
P.O. BOX 15030
NEW BRUNSWICK, NJ 08906
Reports to Shareholders. Every year, we will send you an annual report (along
with an updated prospectus) and a semi-annual report, which contain important
financial information about the Fund. To reduce Fund expenses, we will send one
annual shareholder report, one semi-annual shareholder report and one annual
prospectus per household, unless you instruct us or your broker otherwise.
Subaccounting and Special Services. Special processing can be arranged with PMFS
for corporations, banks and other institutions that wish to open multiple
accounts (a master account and subaccounts). An institution that wishes to use
PMFS's subaccounting facilities or other special services for individual or
multiple accounts will be required to enter into a separate agreement with PMFS.
Charges for these services, if any, will be determined on the basis of the level
of services provided. Subaccounts can be opened at the time of an initial
investment or at a later date.
--------------------------------------------------------------------------------
16 Prudential Institutional Liquidity Portfolio, Inc. (telephone)(800) 521-7466
<PAGE>
How to Buy and Sell
--------------------------------------------------------------------------------
Shares of the Fund
--------------------------------------------------------------------------------
HOW TO SELL YOUR SHARES
You can sell your shares of the Fund at any time, subject to certain
restrictions.
When you sell shares of the Fund--also known as redeeming shares-- the
price you will receive will be the NAV next determined after the Transfer Agent
receives your order to sell. Redemption requests may be made by telephone by
calling PMFS at (800) 521-7466. When you call, you will be asked to provide your
name (as an authorized person on the account), account number and personal
identification number. Neither PMFS nor the Fund will be responsible for further
verification of the authenticity of instructions received by telephone.
During periods of severe market or economic conditions, telephone
redemption may be difficult. In such case, you should consider sending your
redemption request to PMFS by telecopy at telecopier number (732) 482-2666.
All redemptions are paid by wire transfer of the proceeds to the U.S.
commercial bank account or the Prudential Securities account designated on your
account application.
For Class A shares to be redeemed and the proceeds sent by wire transfer on
the same day, telephone instructions or your written redemption request must be
received by PMFS before 4:00 p.m., New York time. Although we will wire
redemption proceeds on the same day as a request received before 4:00 p.m., New
York time, you should be aware that federal wire restrictions and individual
bank hours of operation may restrict your access to the redemption proceeds
until the following business day. Class A shares redeemed before 4:00 p.m., New
York time, are not entitled to income dividends declared on the day of the
redemption.
If you participate in the COMMAND Program or the BusinessEdge Program, you
must submit your redemption request to your Prudential Securities Financial
Advisor or Prusec broker, as applicable, by 2:00 p.m., New York time, in order
to have the request processed on the same day.
RESTRICTIONS ON SALES
There are certain times when you may not be able to sell shares of the Fund or
when we may delay paying you the proceeds from a sale. This may happen during
unusual market conditions or emergencies when the Fund can't determine the value
of its assets or sell its holdings. For more information, see the SAI, "Purchase
and Redemption of Fund Shares."
--------------------------------------------------------------------------------
17
<PAGE>
How to Buy and Sell
--------------------------------------------------------------------------------
Shares of the Fund
--------------------------------------------------------------------------------
If you are selling more than $100,000 of shares and you want the redemption
proceeds wired to an institution that is not in our records, or you are a
business or trust, and if you hold your shares directly with the Transfer Agent,
you will need to have the signature on your sell order signature guaranteed by
an "eligible guarantor institution. "An "eligible guarantor institution"
includes any bank, broker-dealer or credit union. For more information, see the
SAI, "Purchase and Redemption of Fund Shares."
In addition, we may withhold wiring redemption proceeds if the Fund's
investment adviser determines that the Fund could be adversely affected by
making immediate payment, and we may take up to seven days to wire redemption
proceeds.
REDEMPTION IN KIND
If the sales of Fund shares you make during any 90-day period reach the lesser
of $250,000 or 1% of the value of the Fund's net assets, we can then give you
securities from the Fund's portfolio instead of cash. If you want to sell the
securities for cash, you would have to pay the costs charged by a broker.
INVOLUNTARY REDEMPTION
If you make a sale that reduces your account value to less than $100,000, we may
sell the rest of your shares and close your account. We would do this to
minimize the Fund's expenses paid by other shareholders. We will give you 60
days' notice, during which time you can purchase additional shares to avoid this
action.
AUTOMATIC REDEMPTION FOR THE COMMAND PROGRAM OR
THE BUSINESSEDGE PROGRAM
If you participate in the COMMAND Program or the BusinessEdge Program, your Fund
shares will be automatically redeemed to cover any deficit in your account. The
amount of the redemption will be the nearest dollar amount necessary to cover
the deficit.
The amount of the redemption will be the lesser of the total value of Fund
shares held in your account or the deficit in your account. A deficit in your
COMMAND Program account or BusinessEdge Program account may result from activity
arising under the Program, such as debit balances incurred by the use of the
Visa(R) Gold Debit Card Account (for the COMMAND Program) or the BusinessEdge
Visa(R) Debit Card Account (for the BusinessEdge Program),
--------------------------------------------------------------------------------
18 Prudential Institutional Liquidity Portfolio, Inc. (telephone)(800) 521-7466
<PAGE>
How to Buy and Sell
--------------------------------------------------------------------------------
Shares of the Fund
--------------------------------------------------------------------------------
as well as ATM transactions, cash advances and Program account checks. Your
account will be automatically scanned for deficits each day and, if there is
insufficient cash in your account, we will redeem an appropriate number of
shares of the Fund to satisfy any remaining deficit. You are entitled to any
dividends declared on the redeemed shares through the day before the redemption
is made. Dividends declared on the redemption date will be retained by
Prudential Securities or Prusec, as applicable, which has advanced monies to
satisfy deficits in your account.
Redemptions are automatically made, to the nearest dollar, on each day to
satisfy account deficits or to honor your redemption requests.
MANUAL REDEMPTION FOR THE COMMAND PROGRAM OR THE BUSINESSEDGE PROGRAM.
If you participate in the COMMAND Program or the BusinessEdge Program, you may
redeem your Fund shares by submitting a written request to your Prudential
Securities Financial Advisor or Prusec broker, as applicable. You should not
send a manual redemption request to the Fund. If you do, we will forward the
request to Prudential Securities or Prusec, as appropriate, which could delay
your requested redemption.
The proceeds from a manual redemption will immediately become a free cash
balance in your Program account and will be automatically invested in the money
market mutual fund that you selected as the "Primary Fund" for cash sweeps in
your account. Both the COMMAND Program and the BusinessEdge Program require that
your written redemption request be signed by all persons in whose name Fund
shares are registered, exactly as they appear on your Program account client
statement. In certain situations, additional documents such as trust
instruments, death certificates, appointments as executor or administrator, or
certificates of corporate authority may be required.
Under the COMMAND Program, Prudential Securities has the right to terminate
your Program account at any time for any reason. Likewise, under the
BusinessEdge Program, Prudential Securities or Prusec, as applicable, has the
right to terminate your Program account at any time for any reason. If a Program
account is terminated, all shares of the Fund held in the account will be
redeemed.
--------------------------------------------------------------------------------
19
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights
--------------------------------------------------------------------------------
The financial highlights below are intended to help you evaluate the financial
performance of Class A shares of the Fund. The total return in the chart
represents the rate that a shareholder earned on an investment in the Fund,
assuming reinvestment of all dividends and other distributions. The information
is for Class A shares of the Fund for the periods indicated.
Review this chart with the financial statements which appear in the SAI.
Additional performance information is contained in the annual report, which you
can receive at no charge, as described on the back cover of this prospectus.
The financial highlights for the four fiscal years ended March 31, 2000
were audited by PricewaterhouseCoopers LLP, independent accountants, and the
financial highlights for the year ended March 31, 1996 were audited by other
independent auditors. Their report was unqualified.
Class A Shares (fiscal years ended 3-31)
Per Share Operating Performance 2000 1999 1998 1997 1996
--------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF YEAR $1.00 $1.00 $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income
and net realized gains .053(2) .053(2) .055(2) .050 .056
Dividends and distributions
to shareholders (.053) (.053) (.055) (.050) (.056)
Net asset value, end of year $1.00 $1.00 $1.00 $1.00 $1.00
TOTAL RETURN(1) 5.40% 5.39% 5.63% 5.16% 5.72%
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Ratios/Supplemental Data 2000 1999 1998 1997 1996
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSETS, END OF YEAR (000) $371,866 $361,167 $140,813 $478,045 $440,842
AVERAGE NET ASSETS:(000) $366,127 $247,471 $217,881 $449,393 $519,946
RATIOS TO AVERAGE NET ASSETS:
Net investment income 5.27%(2) 5.20%(2) 5.42%(2) 5.03% 5.56%
Expenses, including
distribution fee .20%(2) .20%(2) .29%(2) .46% .43%
Expenses, excluding
distribution fee .15%(3) .15%(3) .21%(3) .34% .31%
-------------------------------------------------------------------------------------------
</TABLE>
(1) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each year reported and includes reinvestment
of dividends and distributions.
(2) Net of management and distribution fee waiver/expense subsidy.
(3) Net of management fee waiver/expense subsidy.
--------------------------------------------------------------------------------
20 Prudential Institutional Liquidity Portfolio, Inc. (telephone)(800) 521-7466
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NOTES
--------------------------------------------------------------------------------
21
<PAGE>
--------------------------------------------------------------------------------
The Prudential Mutual Fund Family
--------------------------------------------------------------------------------
Prudential offers a broad range of mutual funds designed to meet your individual
needs. For information about these funds, contact your financial adviser or call
us at (800) 225-1852. Read the applicable prospectus carefully before you invest
or send money.
Stock Funds
PRUDENTIAL EMERGING GROWTH FUND, INC.
PRUDENTIAL EQUITY FUND, INC.
PRUDENTIAL EQUITY INCOME FUND
PRUDENTIAL INDEX SERIES FUND
Prudential Small-Cap Index Fund
Prudential Stock Index Fund
THE PRUDENTIAL INVESTMENT PORTFOLIOS, INC.
Prudential Jennison Growth Fund
Prudential Jennison Equity
Opportunity Fund
PRUDENTIAL MID-CAP VALUE FUND
PRUDENTIAL REAL ESTATE SECURITIES FUND
PRUDENTIAL SECTOR FUNDS, INC.
Prudential Financial Services Fund
Prudential HealthServices Fund
Prudential Technology Fund
Prudential Utility Fund
PRUDENTIAL TAX-MANAGED SMALL CAP FUND, INC.
PRUDENTIAL SMALL COMPANY VALUE
FUND, INC.
PRUDENTIAL TAX-MANAGED FUNDS
Prudential Tax-Managed Equity Fund
PRUDENTIAL 20/20 FOCUS FUND
NICHOLAS-APPLEGATE FUND, INC.
Nicholas-Applegate Growth Equity Fund
TARGET FUNDS
Large Capitalization Growth Fund
Large Capitalization Value Fund
Small Capitalization Growth Fund
Small Capitalization Value Fund
ASSET ALLOCATION/BALANCED FUNDS
PRUDENTIAL BALANCED FUND
PRUDENTIAL DIVERSIFIED FUNDS
Conservative Growth Fund
Moderate Growth Fund
High Growth Fund
THE PRUDENTIAL INVESTMENT PORTFOLIOS, INC.
Prudential Active Balanced Fund
GLOBAL FUNDS
GLOBAL STOCK FUNDS
PRUDENTIAL DEVELOPING MARKETS FUND
Prudential Developing Markets
Equity Fund
Prudential Latin America Equity Fund
PRUDENTIAL EUROPE GROWTH FUND, INC.
PRUDENTIAL GLOBAL GENESIS FUND, INC.
PRUDENTIAL INDEX SERIES FUND
Prudential Europe Index Fund
Prudential Pacific Index Fund
PRUDENTIAL NATURAL RESOURCES
FUND, INC.
PRUDENTIAL PACIFIC GROWTH FUND, INC.
PRUDENTIAL WORLD FUND, INC.
Prudential Global Growth Fund
Prudential International Value Fund
Prudential Jennison International Growth Fund
GLOBAL UTILITY FUND, INC.
TARGET FUNDS
International Equity Fund
GLOBAL BOND FUNDS
PRUDENTIAL GLOBAL TOTAL RETURN
FUND, INC.
PRUDENTIAL INTERNATIONAL BOND
FUND, INC.
--------------------------------------------------------------------------------
22 Prudential Institutional Liquidity Portfolio, Inc. (telephone)(800) 521-7466
<PAGE>
--------------------------------------------------------------------------------
The Prudential Mutual Fund Family
--------------------------------------------------------------------------------
BOND FUNDS
TAXABLE BOND FUNDS
PRUDENTIAL TOTAL RETURN BOND FUND, INC.
PRUDENTIAL GOVERNMENT INCOME FUND, INC.
PRUDENTIAL GOVERNMENT SECURITIES TRUST
Short-Intermediate Term Series
PRUDENTIAL HIGH YIELD FUND, INC.
PRUDENTIAL HIGH YIELD TOTAL RETURN
FUND, INC.
PRUDENTIAL INDEX SERIES FUND
Prudential Bond Market Index Fund
PRUDENTIAL SHORT-TERM CORPORATE BOND FUND, INC.
Income Portfolio
TARGET FUNDS
Total Return Bond Fund
PRUDENTIAL CALIFORNIA MUNICIPAL FUND
California Series
California Income Series
PRUDENTIAL MUNICIPAL BOND FUND
High Income Series
Insured Series
PRUDENTIAL MUNICIPAL SERIES FUND
Florida Series
Massachusetts Series
New Jersey Series
New York Series
North Carolina Series
Ohio Series
Pennsylvania Series
PRUDENTIAL NATIONAL MUNICIPALS
FUND, INC.
MONEY MARKET FUNDS
TAXABLE MONEY MARKET FUNDS
CASH ACCUMULATION TRUST
Liquid Assets Fund
National Money Market Fund
PRUDENTIAL GOVERNMENT SECURITIES TRUST
Money Market Series
U.S. Treasury Money Market Series
PRUDENTIAL SPECIAL MONEY MARKET
FUND, INC.
Money Market Series
PRUDENTIAL MONEYMART ASSETS, INC.
TAX-FREE MONEY MARKET FUNDS
PRUDENTIAL TAX-FREE MONEY FUND, INC.
PRUDENTIAL CALIFORNIA MUNICIPAL FUND
California Money Market Series
PRUDENTIAL MUNICIPAL SERIES FUND
Connecticut Money Market Series
Massachusetts Money Market Series
New Jersey Money Market Series
New York Money Market Series
COMMAND FUNDS
COMMAND MONEY FUND
COMMAND GOVERNMENT FUND
COMMAND TAX-FREE FUND
INSTITUTIONAL MONEY MARKET FUNDS
PRUDENTIAL INSTITUTIONAL LIQUIDITY PORTFOLIO, INC.
Institutional Money Market Series
--------------------------------------------------------------------------------
23
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NOTES
--------------------------------------------------------------------------------
24 Prudential Institutional Liquidity Portfolio, Inc. (telephone)(800) 521-7466
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NOTES
--------------------------------------------------------------------------------
25
<PAGE>
FOR MORE INFORMATION
Please read this prospectus before you
invest in the Fund and keep it for future
reference. For information or shareholder
questions contact
PRUDENTIAL MUTUAL FUND SERVICES LLC
ATTN: INSTITUTIONAL SERVICE DIVISION
P.O. BOX 15030
NEW BRUNSWICK, NJ 08906
(800) 521-7466
(732) 482-7555 (Calling from outside the U.S.)
Outside Brokers should contact
PRUDENTIAL INVESTMENT MANAGEMENT
SERVICES LLC
P.O. BOX 15035
NEW BRUNSWICK, NJ 08906
(800) 778-8769
Visit Prudential's website at
http://www.prudential.com
Additional information about the Fund can
be obtained without charge and can be
found in the following documents
STATEMENT OF ADDITIONAL INFORMATION (SAI)
(incorporated by reference into this
prospectus)
ANNUAL REPORT
SEMI-ANNUAL REPORT
MF137A
You can also obtain copies of Fund
documents from the Securities and
Exchange Commission as follows
BY MAIL
Securities and Exchange Commission
Public Reference Section
Washington, DC 20549-0102
BY ELECTRONIC REQUEST
[email protected]
(The SEC charges a fee to copy
documents.)
IN PERSON
PUblic Reference Room in Washington, DC
(For hours of operation, call
1-(202) 942-8090
VIA THE INTERNET
on the EDGAR database at
http://www.sec.gov
CUSIP Numbers NASDAQ Symbol
Class A Shares--744350-10-9 PIMXX
Investment Company Act File No. 811-5336
<PAGE>
PROSPECTUS MAY 31, 2000
PRUDENTIAL
INSTITUTIONAL LIQUIDITY PORTFOLIO, INC.
INSTITUTIONAL MONEY MARKET SERIES
(CLASS I SHARES)
FUND TYPE Money market
OBJECTIVE High current income consistent with the preservation to principal and
liquidity
BUILD
-------------------------------------------------------------------------------
ON THE ROCK
As with all mutual funds, the Securities and
Exchange Commission has not approved or
disapproved the Fund's shares nor has the
SEC determined that this prospectus is
complete or accurate. It is a criminal offense
to state otherwise.
[LOGO] PRUDENTIAL
<PAGE>
--------------------------------------------------------------------------------
TABLE OF CONTENTS
--------------------------------------------------------------------------------
1 Risk/Return Summary
1 Investment Objective and Principal Strategies
1 Principal Risks
2 Evaluating Performance
3 Fees and Expenses
5 How the Fund Invests
5 Investment Objective and Policies
7 Other Investments and Strategies
8 Rating of Fund Shares
9 Investment Risks
10 How the Fund is Managed
10 Board of Directors
10 Manager
10 Investment Adviser
10 Distributor
11 Fund Distributions and Tax Issues
11 Distributions
11 Tax Issues
13 How to Buy and Sell Shares of the Fund
13 How to Buy Shares
15 How to Sell Your Shares
19 Financial Highlights
20 The Prudential Mutual Fund Family
For More Information (Back Cover)
--------------------------------------------------------------------------------
Prudential Institutional Liquidity (Telephone)(800) 521-7466
Portfolio, Inc.
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
RISK/RETURN SUMMARY
--------------------------------------------------------------------------------
|---------------------------------------|
|MONEY MARKET FUNDS--which hold |
|high-quality short-term debt |
|obligations--provide investors with a |
|lower risk, highly liquid investment |
|option. These funds attempt to maintain|
|a net asset value of $1 per share, |
|although there can be no guarantee that|
|they will always be able to do so. |
|---------------------------------------|
This section highlights key information about PRUDENTIAL INSTITUTIONAL LIQUIDITY
PORTFOLIO, INC.-INSTITUTIONAL MONEY MARKET SERIES, which we refer to as "the
Fund." The Fund offers Class A shares and Class I shares. This prospectus
relates only to Class I shares. Additional information follows this summary.
INVESTMENT OBJECTIVE AND PRINCIPAL STRATEGIES
Our investment objective is HIGH CURRENT INCOME CONSISTENT WITH THE PRESERVATION
OF PRINCIPAL AND LIQUIDITY. To achieve this objective we invest at least 80% of
the Fund's assets in short-term money market instruments such as obligations
issued by the U.S. Government, commercial paper, asset-backed securities,
funding agreements, variable rate demand notes, bills, notes and other
obligations issued by banks, corporations and other companies, and obligations
issued by foreign banks, foreign companies or foreign governments. The Fund will
invest only in instruments with remaining maturities of thirteen months or less
and which are denominated in U.S. dollars. The Fund may invest in longer-term
securities that are accompanied by demand features which will shorten the
effective maturity of the securities to thirteen months or less. While we make
every effort to achieve our objective and maintain a net asset value of $1 per
share, we can't guarantee success. To date, the Fund's net asset value has never
deviated from $1 per share.
PRINCIPAL RISKS
Although we try to invest wisely, all investments involve risk. Since the Fund
invests in debt obligations, there is the risk that the value of a particular
obligation could go down. Debt obligations are generally subject to CREDIT
RISK--the risk that the issuer of a particular security may be unable to make
principal and interest payments when they are due, and MARKET RISK--the risk
that the securities could lose value because interest rates change or investors
lose confidence in the ability of issuers in general to pay back their debt.
With respect to the Fund's investments in asset-backed securities, there is a
risk of prepayment, which means that if the underlying obligations are paid
before they are due, the security may discontinue paying an attractive rate of
income.
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1
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RISK/RETURN SUMMARY
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The Fund's investment in foreign securities involves additional risks. For
example, foreign banks and companies generally are not subject to regulatory
requirements comparable to those applicable to U.S. banks and companies. In
addition, political developments and changes in currency rates may adversely
affect the value of foreign securities. In all cases, however, we invest only in
U.S. dollar-denominated securities.
There is also a risk that we will sell a security for a price that is
higher or lower than the value attributed to the security through the amortized
cost valuation procedures we follow. Such an event could affect our ability to
maintain a net asset value of $1 per share.
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although the Fund seeks to preserve the value of an investment at $1 per
share, it is possible to lose money by investing in the Fund.
EVALUATING PERFORMANCE
A number of factors--including risk--can affect how the Fund performs. The
following bar chart shows the Fund's performance for each full calendar year of
operation. The tables below compare the Fund's average annual returns and yield
for the periods indicated with those of a group of similar funds. The bar chart
and tables demonstrate the risk of investing in the Fund by showing how returns
can change. Past performance is not an indication that the Fund will achieve
similar results in the future. For current yield information, you can call us at
(800) 521-7466.
--------------------------------
ANNUAL RETURNS(1) (CLASS I SHARES)
--------------------------------------------------------------------------------
[GRAPHICS]
Best Quarter: 1.47% Worst Quarter: 1.23%
(4th quarter of 1999) (2nd quarter of 1999)
--------------------------------------------------------------------------------
(1) The Fund's returns are after deduction of expenses. The total return of the
Class I shares from 1-1-00 to 3-31-00 was 1.34%.
--------------------------------------------------------------------------------
2 Prudential Institutional (telephone)(800) 521-7466
Liquidity Portfolio, Inc.
<PAGE>
--------------------------------------------------------------------------------
RISK/RETURN SUMMARY
--------------------------------------------------------------------------------
------------------------------------------
AVERAGE ANNUAL RETURNS(1) (AS OF 12/31/99)
--------------------------------------------------------------------------------
1 YEAR SINCE INCEPTION
Class I shares 5.32% 5.53% (since 7-9-97)
Lipper Average(2) 4.92% 5.19% (since 6-30-97)
--------------------------------------------------------------------------------
-----------------------------------------
7-DAY YIELD(1) (AS OF 3/31/00)
--------------------------------------------------------------------------------
Class I shares 6.01%
iMoneyNet, Inc. Average(3) 5.65%
--------------------------------------------------------------------------------
1 The Fund's returns and yield are after deduction of expenses.
2 The Lipper Average is based upon the average return of all mutual funds in
the Institutional Money Market Funds category.
3 The iMoneyNet, Inc. Average is based upon the average yield of all mutual
funds in the all taxable money market fund category.
FEES AND EXPENSES
These tables show the fees and expenses that you may pay if you buy and hold
shares of the Fund.
-----------------------------------------------------
SHAREHOLDER FEES (PAID DIRECTLY FROM YOUR INVESTMENT)
--------------------------------------------------------------------------------
CLASS I
Maximum sales charge (load) None
imposed on purchases (as a percentage of offering
price)
Maximum deferred sales charge (load) (as a percentage None
of the lower of original purchase price or sale
proceeds)
Maximum sales charge (load) None
imposed on reinvested dividends
and other distributions
Redemption fees None
Exchange fee None
COMMAND Program annual fee(1) $125(2)
BusinessEdge Program annual fee(1) $175(2)
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3
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RISK/RETURN SUMMARY
--------------------------------------------------------------------------------
---------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (DEDUCTED FROM FUND ASSETS)
--------------------------------------------------------------------------------
CLASS I
Management fees .20%
+ Distribution and service (12b-1) fees None
+ Other expenses .06%
= TOTAL ANNUAL FUND OPERATING EXPENSES .26%
- Fee waiver and expense reimbursement(3) .11%
= NET ANNUAL FUND OPERATING EXPENSES .15%
--------------------------------------------------------------------------------
1 COMMAND and BusinessEdge are financial services programs available through
Prudential Securities Incorporated and/or Pruco Securities Corporation. For
more information, you should contract a Prudential Securities Financial
Advisor or a Pruco Securities Preferred Agent.
2 The annual program fee as a percentage of average net assets is less than
.01% for both the COMMAND and BusinessEdge Programs and is calculated by
dividing $125 (the total fee for the COMMAND Program) or $185 (the total
for the BusinessEdge Program), respectively, by the average account size in
the Fund. The annual program fee is not prorated for purposes of this
calculation to give effect to COMMAND Program or BusinessEdge Program
participants who also own shares in or subscribe to various services
offered by the respective Programs. A major portion of the annual program
fee is not attributable to the Fund, but rather to nonfund services
provided by the Program.
3 For the fiscal year ending March 31, 2001, the Manager of the Fund has
contractually agreed to reimburse the Fund for operating expenses in excess
of .15% of the average daily net assets of Class I shares.
EXAMPLE
This example will help you compare the cost of investing in the Fund with the
cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the Fund for the time
periods indicated and then sell all of your shares at the end of those periods.
The example also assumes that your investment has a 5% return each year and that
the Fund's operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions, your costs would be:
--------------------------------------------------------------------------------
1 YR 3 YRS 5 YRS 10 Yrs
Class I shares(1) $15 $73 $135 $320
--------------------------------------------------------------------------------
1 The example reflects the agreement of the Manager to reimburse certain
operating expenses of Class I shares for the fiscal year ending March 31,
2001. The Manager has not advised the Fund of its intention to discontinue
the waiver and/or reimbursement for subsequent fiscal years. The 3-year,
5-year and 10-year costs only reflect the 1-year waiver and reimbursement.
--------------------------------------------------------------------------------
4 Prudential Institutional (telephone)(800) 521-7466
Liquidity Portfolio, Inc.
<PAGE>
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HOW THE FUND INVESTS
--------------------------------------------------------------------------------
INVESTMENT OBJECTIVE AND POLICIES
The Fund's investment objective is HIGH CURRENT INCOME CONSISTENT WITH THE
PRESERVATION OF PRINCIPAL AND LIQUIDITY. While we make every effort to achieve
our objective, we can't guarantee success.
The Fund invests in a diversified portfolio of short-term debt obligations
which include, but are not limited to, obligations issued by the U.S.
Government, its agencies and instrumentalities, as well as commercial paper,
asset-backed securities, funding agreements, variable rate demand notes, bills,
notes and other obligations issued by banks, corporations and other companies
(including trust structures), obligations issued by foreign banks, foreign
companies or foreign governments, and municipal notes.
The Fund invests in high-quality money market instruments to try to provide
investors with current income while maintaining a stable net asset value of $1
per share. We manage the Fund to comply with specific rules designed for money
market mutual funds. This means that we manage the Fund's portfolio to comply
with the requirements of Rule 2a-7 under the Investment Company Act of 1940 (the
Investment Company Act). As such, we will not acquire any security with a
remaining maturity exceeding thirteen months, and we will maintain a
dollar-weighted average portfolio of 90 days or less. In addition, we will
comply with the diversification, quality and other requirements of Rule 2a-7.
This means, generally, that the instruments we purchase present "minimal credit
risk" and are of "eligible quality." "Eligible quality" for this purpose means a
security: (i) rated in one of the two highest short-term rating categories by at
least two nationally recognized statistical rating organizations (NRSROs) or, if
only one NRSRO has rated the security, so rated by that NRSRO; (ii) rated in one
of the three highest long-term rating categories by at least two NRSROs or, if
only one NRSRO has rated the security, so rated by that NRSRO; or (iii) if
unrated, of comparable quality as determined by the Fund's investment adviser.
All securities that we purchase will be denominated in U.S. dollars but may be
issued by a foreign issuer.
COMMERCIAL PAPER is short-term debt obligations of banks, corporations and
other borrowers. The obligations are usually issued by financially strong
businesses and often include a line of credit to protect purchasers of the
obligations. An ASSET-BACKED SECURITY is a loan or note that pays interest based
upon the cash flow of a pool of assets, such as mortgages, loans and credit card
receivables. CERTIFICATES OF DEPOSIT, TIME DEPOSITS, BANKERS' ACCEPTANCES and
BANK NOTES are obligations issued by or through a bank. These instruments depend
upon the strength of the bank involved in the borrowing to give
--------------------------------------------------------------------------------
5
<PAGE>
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HOW THE FUND INVESTS
--------------------------------------------------------------------------------
investors comfort that the borrowing will be repaid when promised. FUNDING
AGREEMENTS are contracts issued by insurance companies that guarantee a return
of principal, plus some amount of interest. When purchased by money market
funds, funding agreements will typically be short-term and will provide an
adjustable rate of interest.
DEBT OBLIGATIONS in general, including those listed above and any others that
we may purchase, are basically written promises to repay a debt. Among the
various types of debt securities that we may purchase, the terms of repayment
may vary, as may the commitment of other parties to honor the obligations of the
issuer of the security. We may purchase securities that include DEMAND FEATURES,
which allow us to DEMAND REPAYMENT of a debt obligation before the obligation is
due or "matures." This means that we can purchase longer-term securities because
we can demand repayment of the obligation at an agreed-upon price within a
relatively short period of time. This procedure follows the rules applicable to
money market funds.
FOREIGN SECURITIES and foreign markets involve additional risk. Laws and
accounting standards typically are not as strict in foreign countries as they
are in the U.S. Foreign fixed income and currency markets may be less stable
than those in U.S. markets. Changes in the exchange rates of foreign currencies
can affect the value of foreign assets.
Any of the money market instruments that the Fund may purchase may be
accompanied with the right to resell the instrument prior to the instrument's
maturity. In addition, we may separately purchase rights to resell these
instruments. These rights are referred to as "PUTS" and are acquired by the Fund
to protect against a possible decline in the market value of the securities to
which the puts relate in the event of interest rate fluctuations, to shorten the
effective maturity of the security and to provide the Fund with liquidity to
meet shareholder redemption requests.
The securities that we may purchase may change over time as new types of
money market instruments are developed. We will purchase these new instruments,
however, only if their characteristics and features follow the rules governing
the operation of money market funds.
Our investment objective is a fundamental policy that cannot be changed
without shareholder approval. The Board of Directors of the Fund can change
investment policies that are not fundamental. For more information, see
"Investment Risks" below and the Statement of Additional Information,
"Description of the Fund, its Investments and Risks." The Statement of
Additional Information--which we refer to as the SAI--contains additional
--------------------------------------------------------------------------------
6 Prudential Instituional Liquidity (Telephone) (800) 521-7466
Portfolio, Inc.
<PAGE>
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HOW THE FUND INVESTS
--------------------------------------------------------------------------------
information about the Fund. For information on how to obtain a copy, see the
back cover of this prospectus.
OTHER INVESTMENTS AND STRATEGIES
While the Fund invests principally in the securities described above, it may
invest in other securities or use certain investment strategies to increase
returns or protect its assets, if market conditions warrant.
The Fund intends to participate in one or more JOINT TRADING ACCOUNTS whereby
the Fund, along with other investment companies managed by Prudential
Investments Fund Management LLC, will jointly engage in repurchase agreements
and, subject to the issuance of an order by the Securities and Exchange
Commission, jointly purchase money market instruments. The ability of the Fund
to participate in these joint trading accounts will be conditioned upon
requirements imposed by such order, which may be amended from time to time.
The Fund may also invest in other DEBT OBLIGATIONS ISSUED OR GUARANTEED BY
THE U.S. GOVERNMENT and government-related entities. Some of these debt
securities are backed by the full faith and credit of the U.S. Government, like
obligations of the Government National Mortgage Association (GNMA or "Ginnie
Mae"). Debt securities issued by other government entities, like obligations of
the Federal National Mortgage Association (FNMA or "Fannie Mae") and the Student
Loan Marketing Association (SLMA or "Sallie Mae"), are not backed by the full
faith and credit of the U.S. Government. However, these issuers have the right
to borrow from the U.S. Treasury to meet their obligations. The debt securities
of other issuers, like the Farm Credit System, depend entirely upon their own
resources to repay their debt.
The Fund may also use REPURCHASE AGREEMENTS, where a party agrees to sell a
security to the Fund and then repurchase it at an agreed-upon price at a stated
time. These transactions constitute short-term cash loans by the Fund to
financial institutions. This creates a fixed return for the Fund.
The Fund may use REVERSE REPURCHASE AGREEMENTS, where we borrow money on a
temporary basis by selling a security with an obligation to repurchase it at an
agreed-upon price and time. The Fund's use of reverse repurchase agreements is
limited to 15% of the value of its total assets.
The Fund may also purchase money market obligations on a "WHEN-ISSUED" or
"DELAYED-DELIVERY" basis. When the Fund makes this type of purchase, the price
and interest rate are fixed at the time of purchase, but delivery
--------------------------------------------------------------------------------
7
<PAGE>
--------------------------------------------------------------------------------
HOW THE FUND INVESTS
--------------------------------------------------------------------------------
of and payment for the obligations take place at a later time. The Fund does not
earn interest income until the date the obligations are delivered.
The Fund may purchase FLOATING RATE and VARIABLE RATE securities. These
securities pay interest at rates that change periodically to reflect changes in
market interest rates. Because these securities adjust the interest they pay,
they may be beneficial when interest rates are rising because of the additional
return the Fund will receive, and they may be detrimental when interest rates
are falling because of the reduction in interest payments to the Fund.
The Fund also follows certain policies when it BORROWS MONEY (the Fund may
borrow up to 15% of the value of its net assets); LENDS ITS SECURITIES to others
(the Fund may lend up to 15% of its total assets, including collateral received
in the transaction); and HOLDS ILLIQUID SECURITIES (the Fund may hold up to 10%
of its net assets in illiquid securities, including securities with legal or
contractual restrictions, those without a readily available market, privately
placed commercial paper and repurchase agreements with maturities longer than
seven days). The Fund is subject to certain investment restrictions that are
fundamental policies, which means they cannot be changed without shareholder
approval. For more information about these restrictions, see the SAI.
RATING OF FUND SHARES
Duff & Phelps Credit Rating Co. or its successors (DCR) has given the Fund an
AAA Rating. According to DCR, the AAA rating means the Fund's ability to meet
redemption requests in a timely manner for $1.00 per share is strong. This
rating is based on the Fund's risk management procedures, internal control
systems, limitations on market risk and experienced management team.
--------------------------------------------------------------------------------
8 Prudential Instituional Liquidity (Telephone) (800) 521-7466
Portfolio, Inc.
<PAGE>
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HOW THE FUND INVESTS
--------------------------------------------------------------------------------
INVESTMENT RISKS
As noted, all investments involve risk, and investing in the Fund is no
exception. This chart outlines the key risks and potential rewards of the
principal strategies and certain other investments of the Fund. See, too,
"Description of the Fund, its Investments and Risks" in the SAI.
<TABLE>
<CAPTION>
INVESTMENT TYPE
% OF FUND'S TOTAL ASSETS RISKS POTENTIAL REWARDS
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
HIGH-QUALITY MONEY MARKET o Credit risk--the risk that o A source of regular interest
OBLIGATIONS default of an issuer would leave income
the Fund with unpaid interest or
Up to 100% principal o May be more secure than
stock and other equity
o Market risk--the risk that bonds and securities since companies must
other debt instruments may lose pay their debts before they pay
value because interest rates change dividends
or there is a lack of confidence in a
group of borrowers or in an industry o Investors may realize
higher returns based
MONEY MARKET OBLIGATIONS OF o Foreign markets, economies and upon higher interest
FOREIGN ISSUERS (U.S. political systems may not be as rates paid on foreign
DOLLAR-DENOMINATED) stable as those in the U.S. investments
Up to 100% o Differences in foreign o Increased diversification
laws, accounting standards, by expanding the allowable
public information and custody choices of high- quality debt
and settlement practices securities?
ILLIQUID SECURITIES o May be difficult to value o May offer a more
precisely attractive yield than more
Up to 10% of net assets widely traded securities
o May be difficult to sell at
the time or price desired
--------------------------------------------------------------------------------------------------------------------
9
</TABLE>
<PAGE>
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HOW THE FUND IS MANAGED
--------------------------------------------------------------------------------
BOARD OF DIRECTORS
The Fund's Board of Directors oversees the actions of the Manager, Investment
Adviser and Distributor and decides on general policies. The Board also oversees
the Fund's officers, who conduct and supervise the daily business operations of
the Fund.
MANAGER
Prudential Investments Fund Management LLC (PIFM)
Gateway Center Three, 100 Mulberry Street
Newark, New Jersey 07102-4077
Under a management agreement with the Fund, PIFM manages the Fund's
investment operations and administers its business affairs. For the fiscal year
ended March 31, 2000, the Fund paid PIFM management fees, net of waiver, of .15%
of the Fund's average net assets.
As of March 31, 2000, PIFM served as the Manager to all 45 of the
Prudential Mutual Funds, and as Manager or administrator to 22 closed-end
investment companies, with aggregate assets of approximately $78 billion.
INVESTMENT ADVISER
The Prudential Investment Corporation, called Prudential Investments, is the
Fund's investment adviser and has served as an investment adviser to investment
companies since 1984. Its address is Prudential Plaza, 751 Broad Street, Newark,
NJ 07102. PIFM has responsibility for all investment advisory services,
supervises Prudential Investments and pays Prudential Investments for its
services.
Prudential Investments Fixed Income Group is organized into teams that
specialize by sector. The Fixed Income Investment Policy Committee, which is
comprised of senior investment staff from each sector team, provides guidance to
the teams regarding duration risk, asset allocations and general risk
parameters. Portfolio managers contribute bottom up security selection within
those guidelines.
DISTRIBUTOR
Prudential Investment Management Services LLC (PIMS) distributes the Fund's
shares under a Distribution Agreement with the Fund.
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10 Prudential Institutional Liquidity (Telephone) (800) 521-7466
Portfolio, Inc.
<PAGE>
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FUND DISTRIBUTIONS AND TAX ISSUES
--------------------------------------------------------------------------------
Investors who buy shares of the Fund should be aware of some important tax
issues. For example, the Fund distributes DIVIDENDS of ordinary income and any
realized net CAPITAL GAINS to shareholders. These distributions are subject to
taxes, unless you hold your shares in a 401(k) plan, an Individual Retirement
Account (IRA), or some other qualified or tax-deferred plan or account.
The following briefly discusses some of the important tax issues you should
be aware of, but is not meant to be tax advice. For tax advice, please speak
with your tax adviser.
DISTRIBUTIONS
The Fund distributes DIVIDENDS of any net investment income to shareholders
every month. The dividends you receive from the Fund will be taxed as ORDINARY
INCOME, whether or not they are reinvested in the Fund.
Although the Fund is not likely to realize capital gains because of the types
of securities we purchase, any realized net CAPITAL GAINS will be paid to
shareholders (typically once a year). Capital gains are generated when the Fund
sells assets for a profit.
For your convenience, Fund distributions of dividends and capital gains are
automatically reinvested in the Fund. If you ask us to pay the distributions in
cash, we will wire the distribution to your bank account instead of purchasing
more shares of the Fund. Either way, the distributions are subject to taxes,
unless your shares are held in a qualified or tax-deferred plan or account. For
more information about automatic reinvestment and other shareholder services,
see "How to Buy, Sell and Exchange Shares of the Fund--How To Buy Shares" at
Step 4: Additional Shareholder Services.
TAX ISSUES
Form 1099
Every year, you will receive a Form 1099, which reports the amount of dividends
and capital gains we distributed to you during the prior year. If you own shares
of the Fund as part of a qualified or tax-deferred plan or account, your taxes
are deferred, so you will not receive a Form 1099. However, you will receive a
Form 1099 when you take any distributions from your qualified or tax-deferred
plan or account.
Fund distributions are generally taxable in the year they are received,
except where we declare certain dividends in December of a calendar year but
actually pay them in January of the following year. In such cases, the dividends
are treated as if they were paid on December 31 of the prior year.
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11
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FUND DISTRIBUTIONS AND TAX ISSUES
--------------------------------------------------------------------------------
WITHHOLDING TAXES
If federal law requires you to provide the Fund with your tax identification
number and certifications as to your tax status, and if you fail to do so, or if
you are otherwise subject to back-up withholding, we will withhold and pay to
the U.S. Treasury 31% of your distributions. Dividends of net investment income
and short-term capital gains paid to a nonresident foreign shareholder generally
will be subject to a U.S. withholding tax of 30%. This rate may be lower,
depending on any tax treaty the U.S. may have with the shareholder's country.
--------------------------------------------------------------------------------
12 Prudential Institutional Liquidity (telephone)(800) 521-7466
Portfolio, Inc.
<PAGE>
[LOGO] PRUDENTIAL PRUDENTIAL INSTITUTIONAL LIQUIDITY
PORTFOLIO, INC.
NEW ACCOUNT APPLICATION
PRUDENTIAL MUTUAL FUND SERVICES LLC
Attn: Institutional Service Division
PO Box 15030
New Brunswick, NJ 08906
Contact us at (800) 521-7466
(8:00 a.m.-5:00 p.m. New York
PLEASE PRINT USING BLUE OR BLACK INK. time) or by fax (732) 482-2666.
<TABLE>
<CAPTION>
====================================================================================================================================
<S> <C>
INSTRUCTIONS Use this Application to establish an account in Prudential Institutional Liquidity Portfolio, Inc. Please
complete all relevant information. Missing information could result in delays in processing your
Application. Refer to the prospectus for investment minimums and other important information about your
account.
====================================================================================================================================
1 FUND PRUDENTIAL INSTITUTIONAL LIQUIDITY PORTFOLIO, INC. (PILP) - Institutional Money Market Series
SELECTION (Fund #52, PIMMS)(Fund#597, PIMMI)
Account Number (to be assigned by the Fund)
------------------------------------------------
|__| Class A Shares ($100,000 minimum initial |__| Class I Shares ($5 million minimum initial
investment) investment)
====================================================================================================================================
2 ACCOUNT Print account ownership information exactly as it should appear on your account statement.
REGISTRATION
Name of Account Line 1
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
Name of Account Line 2
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
Street
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
City State ZIP Code
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__| |__|__| |__|__|__|__|__| - |__|__|__|__|
Telephone Number Tax ID Number (Soc, Sec. or EIN)
(|__|__|__|) |__|__|__| - |__|__|__|__| |__|__|__|__|__|__|__|__|__|__|__|
====================================================================================================================================
3 DUPLICATE Please send a duplicate confirmation to the following:
CONFIRMATION
Name of Firm
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
Attention
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
Address
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
City State ZIP Code
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__| |__|__| |__|__|__|__|__| - |__|__|__|__|
====================================================================================================================================
4 YOUR This section to be completed by your Prudential professional, if applicable.
PRUDENTIAL
PROFESSIONAL Name
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
Telephone Number Prudential Securities FA
Branch Ledger Number
(|__|__|__|) |__|__|__| - |__|__|__|__| |__|__|__| |__|__|
====================================================================================================================================
DEFKA70 [BAR CODE]
MF137F Ed. 6/2000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
<S> <C>
5 AUTHORI- Check box if applicable: |__| We authorize the following Prudential professional to act as our agent with
ZATION respect to this account:
Representative Name
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
X
----------------------------------------------------------------------------------------------------
Shareholder's Signature
====================================================================================================================================
6 DIVIDEND If no box is checked, dividends will be automatically reinvested. |__| Pay dividends in cash
DISTRIBUTION
OPTION |__| Reinvest dividends |__| Pay via Wire (wire takes 2 to 3 business days after dividend is paid).
in additional shares You must complete the Wire Instructions in Section 7. If dividend
distribution instructions are different from Expedited Redemption
instructions, please provide separately.
====================================================================================================================================
7 EXPEDITED All redemption proceeds will be sent to either the bank or the Prudential Securities account listed below
REDEMPTIONS (not both). PILP's records of these instructions are binding on all parties and neither PILP nor Prudential
Mutual Fund Services LLC will be liable for any loss, expense or cost arising out of such transactions. All
revisions to these instructions must be signature guaranteed.
|__| COMMERCIAL BANK
Account Name
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
Bank Name
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
Address
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
City State ZIP Code
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__| |__|__| |__|__|__|__|__| - |__|__|__|__|
Account Number Bank Routing Number
-------------------------------------------------------------------------------------------------
|__| PRUDENTIAL SECURITIES ACCOUNT
Account Name: Prudential Securities Bank Name: Chase Manhattan Bank
Account No.: 066296390 Bank Routing No.: 021-0000-21
FOR FURTHER CREDIT TO:
Account Name
|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|
Account Number
|__|__|__| - |__|__|__|__|__|__| - |__| - |__|__|
====================================================================================================================================
8 REQUIRED The undersigned represent and warrant that they have full right, power and authority to make the investment
SIGNATURE(S) applied for pursuant to this Application. If the persons signing are doing so on behalf of a beneficial
owner, they represent and warrant that they are duly authorized to sign this Application and to purchase or
redeem shares of the Fund on behalf of the beneficial owner. Additional authorized signatories can be
provided on an attachment with signature, name and title. The undersigned hereby affirm receipt of a
current Fund prospectus and certify under penalty of perjury that: (1) the number shown above is the
correct taxpayer identification number, and (2) there has been no notification that this account is subject
to backup withholding.
|__| Please check here if there has been notification of backup withholding.
X | | | |
------------------------------------------------------------------------ |__|__|__|__|__|__|__|__|
Signature Corporate Officer/Title (if applicable) Date (month, day, year)
X | | | |
------------------------------------------------------------------------ |__|__|__|__|__|__|__|__|
Signature Corporate Officer/Title (if applicable) Date (month, day, year)
====================================================================================================================================
PLEASE NOTE: MAIL TO: Prudential Mutual Fund Services LLC BY WIRE: State Street Bank, ABA Routing
FINANCIAL Attn: Institutional Service Division Number: 0110-0002-8
TRANSACTIONS ARE PO Box 15030 Attention: PRU 8600 GRP
ACCEPTED UNTIL New Brunswick, NJ 08906 Re: PILP
4:00 P.M. (NEW Name of Fund: Institutional Money Market
YORK TIME) OVERNIGHT: Prudential Mutual Fund Services LLC Series
Attn: PILP Unit, 3rd floor DDA Number: 99034100
194 Wood Avenue South
Iselin, NJ 08830 Account Registration
----------------------
MF137F Ed. 6/2000 Account Number
----------------------------
====================================================================================================================================
</TABLE>
<PAGE>
--------------------------------------------------------------------------------
HOW TO BUY AND SELL
--------------------------------------------------------------------------------
SHARES OF THE FUND
--------------------------------------------------------------------------------
HOW TO BUY SHARES
STEP 1: OPEN AN ACCOUNT
If you don't have an account with us or a securities firm that is permitted to
buy or sell shares of the Fund for you, call Prudential Mutual Fund Services LLC
(PMFS), the Fund's Transfer Agent, at (800) 521-7466 or contact:
Prudential Mutual Fund Services LLC
Attn: Institutional Service Division
P.O. Box 15030
New Brunswick, NJ 08906
After you have established an account, all purchases of Class I shares must
be made via wire transfer of funds to State Street Bank and Trust Company,
Boston, Massachusetts, the Fund's custodian (the Custodian). We have the right
to reject any purchase order (including an exchange into the Fund) or suspend or
modify the Fund's sale of its shares.
STEP 2: CHOOSE A SHARE CLASS
The Fund offers Class A and Class I shares. Except as noted below, the minimum
initial investment for Class I shares is $5 million and the minimum subsequent
investment is $10,000. This prospectus only describes how you can buy and sell
Class I shares of the Fund. For purposes of the minimum initial and subsequent
investment requirements, a master account and its subaccounts, as well as
related institutional accounts (that is, accounts of shareholders with a common
institutional or corporate parent), may be combined.
PURCHASES THROUGH THE COMMAND PROGRAM OR THE BUSINESSEDGE PROGRAM
Class I shares of the Fund are available to shareholders who meet the minimum
investment requirements and participate in either the corporate COMMAND (sm)
Account Program (the COMMAND Program), which is available through Prudential
Securities Incorporated (Prudential Securities), or the Prudential
BusinessEdge (sm) Account Program (the BusinessEdge Program), which is available
either through Prudential Securities or Pruco Securities Corporation (Prusec).
These programs offer intergrated financial services that link together various
product components with the ability to invest in shares of the Fund.
--------------------------------------------------------------------------------
13
<PAGE>
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HOW TO BUY AND SELL
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SHARES OF THE FUND
--------------------------------------------------------------------------------
If you participate in the COMMAND Program or the BusinessEdge Program, your
purchase of Class I shares must be made through your Prudential Securities
Financial Advisor or your Prusec broker, as applicable.
STEP 3: UNDERSTANDING THE PRICE YOU'LL PAY
When you invest in a mutual fund, you buy shares of the Fund. Shares of a money
market mutual fund, like the Fund, are priced differently than shares of common
stock and other securities.
The price you pay for each share of the Fund is based on the share value.
The share value of a mutual fund--known as the NET ASSET VALUE or NAV--is
determined by a simple calculation: it's the total value of the Fund (assets
minus liabilities) divided by the total number of shares outstanding. In
determining NAV, the Fund values its securities using the amortized cost method.
The Fund seeks to maintain an NAV of $1 per share at all times.
We determine the NAV of our shares once each business day at 4:00 p.m. New
York time, on days that the New York Stock Exchange is open for trading. We do
not determine NAV on days when we have not received any orders to purchase,
sell, or exchange or when changes in the value of the Fund's portfolio do not
affect the NAV.
If your purchase order for Class I shares is received by PMFS by calling
(800) 521-7466 before 4:00 p.m. New York time, and federal funds are received by
the Custodian by wire transfer on the same business day, your purchase order
becomes effective as of 4:00 p.m., New York time, and the shares you purchase
are entitled to dividend income earned on that day. Telephone calls to PMFS will
be recorded. In order to make investments that will generate income immediately,
the Fund must have federal funds available to it. Therefore, you are urged to
wire funds to the Custodian via the Federal Reserve Wire System as early in the
day as possible.
If you participate in the COMMAND Program or the BusinessEdge Program, you
must submit your purchase order to your Prudential Securities Financial Advisor
or Prusec broker, as applicable, by 2:00 p.m., New York time. The Prudential
Securities Financial Advisor or Prusec broker will submit your order to the Fund
for Class I shares and will arrange for the transfer of federal funds from your
Program account to the Custodian. If your purchase order is received by 2:00
p.m., New York time, the shares you purchase are entitled to dividend income
earned on that day.
--------------------------------------------------------------------------------
14 Prudential Institutional Liquidity (Telephone) (800) 521-7466
Portfolio, Inc.
<PAGE>
--------------------------------------------------------------------------------
HOW TO BUY AND SELL
--------------------------------------------------------------------------------
SHARES OF THE FUND
--------------------------------------------------------------------------------
STEP 4: ADDITIONAL SHAREHOLDER SERVICES
As a Fund shareholder, you can take advantage of the following services and
privileges:
Automatic Reinvestment. As we explained in the "Fund Distributions and Tax
Issues" section, the Fund pays out--or distributes--its net investment income
and capital gains to all shareholders. For your convenience, we will
automatically reinvest your distributions in the Fund at NAV. If you want your
distributions paid in cash (via wire transfer to your bank account), you can
indicate this preference on your application or notify the Transfer Agent in
writing (at the address below) at least five business days before the date we
determine who receives dividends.
Prudential Mutual Fund Services LLC
Attn: Institutional Service Division
P.O. Box 15030
New Brunswick, NJ 08906
Reports to Shareholders. Every year, we will send you an annual report (along
with an updated prospectus) and a semi-annual report, which contain important
financial information about the Fund. To reduce Fund expenses, we will send one
annual shareholder report, one semi-annual shareholder report and one annual
prospectus per household, unless you instruct us or your broker otherwise.
Subaccounting and Special Services. Special processing can be arranged with PMFS
for corporations, banks and other institutions that wish to open multiple
accounts (a master account and subaccounts). An institution that wishes to use
PMFS's subaccounting facilities or other special services for individual or
multiple accounts will be required to enter into a separate agreement with PMFS.
Charges for these services, if any, will be determined on the basis of the level
of services provided. Subaccounts can be opened at the time of an initial
investment or at a later date.
HOW TO SELL YOUR SHARES
You can sell your shares of the Fund at any time, subject to certain
restrictions.
When you sell shares of the Fund--also known as redeeming shares-- the
price you will receive will be the NAV next determined after the Transfer
--------------------------------------------------------------------------------
15
<PAGE>
--------------------------------------------------------------------------------
HOW TO BUY AND SELL
--------------------------------------------------------------------------------
SHARES OF THE FUND
--------------------------------------------------------------------------------
Agent receives your order to sell. Redemption requests may be made by telephone
by calling PMFS at (800) 521-7466. When you call, you will be asked to provide
your name (as an authorized person on the account), account number and personal
identification number. Neither PMFS nor the Fund will be responsible for further
verification of the authenticity of instructions received by telephone.
During periods of severe market or economic conditions, telephone
redemption may be difficult. In such case, you should consider sending your
redemption request to PMFS by telecopy at telecopier number (732) 482-2666.
All redemptions are paid by wire transfer of the proceeds to the U.S.
commercial bank account or the Prudential Securities account designated on your
account application.
For Class I shares to be redeemed and the proceeds sent by wire transfer on
the same day, telephone instructions or your written redemption request must be
received by PMFS before 4:00 p.m., New York time. Although we will wire
redemption proceeds on the same day as a request received before 4:00 p.m., New
York time, you should be aware that federal wire restrictions and individual
bank hours of operation may restrict your access to the redemption proceeds
until the following business day. Class I shares redeemed before 4:00 p.m., New
York time, are not entitled to income dividends declared on the day of the
redemption.
If you participate in the COMMAND Program or the BusinessEdge Program, you
must submit your redemption request to your Prudential Securities Financial
Advisor or Prusec broker, as applicable, by 2:00 p.m., New York time, in order
to have the request processed on the same day.
RESTRICTIONS ON SALES
There are certain times when you may not be able to sell shares of the Fund or
when we may delay paying you the proceeds from a sale. This may happen during
unusual market conditions or emergencies when the Fund can't determine the value
of its assets or sell its holdings. For more information, see the SAI, "Purchase
and Redemption of Fund Shares."
If you are selling more than $100,000 of shares and you want the redemption
proceeds wired to an institution that is not in our records, or you are a
business or trust, and if you hold your shares directly with the Transfer Agent,
you will need to have the signature on your sell order signature guaranteed by
an "eligible guarantor institution." An "eligible guarantor institution"
--------------------------------------------------------------------------------
16 Prudential Institutional Liquidity (Telephone) (800) 521-7466
Portfolio, Inc.
<PAGE>
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HOW TO BUY AND SELL
--------------------------------------------------------------------------------
SHARES OF THE FUND
--------------------------------------------------------------------------------
includes any bank, broker-dealer or credit union. For more information, see the
SAI, "Purchase and Redemption of Fund Shares."
In addition, we may withhold wiring redemption proceeds if the Fund's
investment adviser determines that the Fund could be adversely affected by
making immediate payment, and we may take up to seven days to wire
redemption proceeds.
REDEMPTION IN KIND
If the sales of Fund shares you make during any 90-day period reach the lesser
of $250,000 or 1% of the value of the Fund's net assets, we can then give you
securities from the Fund's portfolio instead of cash. If you want to sell the
securities for cash, you would have to pay the costs charged by a broker.
INVOLUNTARY REDEMPTION
If you make a sale that reduces your account to less than $5 million, we may
sell the rest of your shares and close your account. We do this to minimize the
Fund's expenses paid by other shareholders. We will give you 60 days' notice,
during which time you can purchase additional shares to avoid this action.
AUTOMATIC REDEMPTION FOR THE COMMAND PROGRAM OR
THE BUSINESSEDGE PROGRAM
If you participate in the COMMAND Program or the BusinessEdge Program, your Fund
shares will be automatically redeemed to cover any deficit in your account. The
amount of the redemption will be the nearest dollar amount necessary to cover
the deficit.
The amount of the redemption will be the lesser of the total value of Fund
shares held in your account or the deficit in your account. A deficit in your
COMMAND Program account or BusinessEdge Program account may result from activity
arising under the Program, such as debit balances incurred by the use of the
Visa(R) Gold Debit Card Account (for the COMMAND Program) or the BusinessEdge
Visa(R) Debit Card Account (for the BusinessEdge Program), as well as ATM
transactions, cash advances and Program account checks. Your account will be
automatically scanned for deficits each day and, if there is insufficient cash
in your account, we will redeem an appropriate number of shares of the Fund to
satisfy any remaining deficit. You are entitled to any dividends declared on the
redeemed shares through the day before the redemption is made. Dividends
declared on the redemption date will be retained by Prudential Securities or
Prusec, as applicable, which has advanced monies to satisfy deficits in your
account.
--------------------------------------------------------------------------------
17
<PAGE>
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HOW TO BUY AND SELL
--------------------------------------------------------------------------------
SHARES OF THE FUND
--------------------------------------------------------------------------------
Redemptions are automatically made, to the nearest dollar, on each day to
satisfy account deficits or to honor your redemption requests.
MANUAL REDEMPTION FOR THE COMMAND PROGRAM OR
THE BUSINESSEDGE PROGRAM
If you participate in the COMMAND Program or the BusinessEdge Program, you may
redeem your Fund shares by submitting a written request to your Prudential
Securities Financial Advisor or Prusec broker, as applicable. You should not
send a manual redemption request to the Fund. If you do, we will forward the
request to Prudential Securities or Prusec, as appropriate, which could delay
your requested redemption.
The proceeds from a manual redemption will immediately become a free cash
balance in your Program account and will be automatically invested in the money
market mutual fund that you selected as the "Primary Fund" for cash sweeps in
your account. Both the COMMAND Program and the BusinessEdge Program require that
your written redemption request be signed by all persons in whose name Fund
shares are registered, exactly as they appear on your Program account client
statement. In certain situations, additional documents such as trust
instruments, death certificates, appointments as executor or administrator, or
certificates of corporate authority may be required.
Under the COMMAND Program, Prudential Securities has the right to terminate
your Program account at any time for any reason. Likewise, under the
BusinessEdge Program, Prudential Securities or Prusec, as applicable, has the
right to terminate your Program account at any time for any reason. If a Program
account is terminated, all shares of the Fund held in the account will be
redeemed.
--------------------------------------------------------------------------------
18 Prudential Institutional Liquidity (Telephone) (800) 521-7466
Portfolio, Inc.
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights
--------------------------------------------------------------------------------
The financial highlights below are intended to help you evaluate the financial
performance of Class I shares of the Fund. The TOTAL RETURN in the chart
represents the rate that a shareholder earned on an investment in the Fund,
assuming reinvestment of all dividends and other distributions. The information
is for Class I shares of the Fund for the periods indicated.
Review each chart with the financial statements which appear in the SAI.
Additional performance information is contained in the annual report, which you
can receive at no charge, as described on the back cover of this prospectus.
The financial highlights for the two fiscal years ended March 31, 2000 and
the period from July 9, 1997 through March 31, 1998 were audited by
PricewaterhouseCoopers LLP, independent accountants, whose reports were
unqualified.
Class I Shares (fiscal years ended 3-31)
---------------------------------------------------------------
PER SHARE OPERATING
PERFORMANCE 2000 1999 1998(1)
---------------------------------------------------------------
NET ASSET VALUE, $1.00 $1.00 $1.00
BEGINNING OF PERIOD
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
and net realized gains .053(4) .053(4) .041(4)
Dividends and
distributions to
shareholders (.053) (.053) (.041)
Net asset value, end
of period $1.00 $1.00 $1.00
TOTAL RETURN(2) 5.46% 5.45% 4.15%
---------------------------------------------------------------
RATIOS/SUPPLEMENTAL
DATA 2000 1999 1998
---------------------------------------------------------------
NET ASSETS, END OF
PERIOD (000) $1,601,631 $1,750,229 $910,394
AVERAGE NET ASSETS
(000) $1,643,961 $1,470,082 $814,138
RATIOS TO AVERAGE NET
ASSETS:
Net investment income 5.30%(4) 5.26%(4) 5.60%(3),(4)
Expenses .15%(4) .15%(4) .15%(3),(4)
---------------------------------------------------------------
(1) Information shown is for the period from 7-9-97, when Class I shares were
first offered, through 3-31-98.
(2) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each period reported and includes
reinvestment of dividends and distributions. Total returns for less than a
full year are not annualized.
(3) Annualized.
(4) Net of management fee waiver/expense subsidy.
--------------------------------------------------------------------------------
19
<PAGE>
--------------------------------------------------------------------------------
The Prudential Mutual Fund Family
--------------------------------------------------------------------------------
Prudential offers a broad range of mutual funds designed to meet your individual
needs. For information about these funds, contact your financial adviser or call
us at (800) 225-1852. Read the applicable prospectus carefully before you invest
or send money.
STOCK FUNDS ASSET ALLOCATION/BALANCED FUNDS
PRUDENTIAL EMERGING GROWTH FUND, INC. PRUDENTIAL BALANCED FUND
PRUDENTIAL EQUITY FUND, INC. PRUDENTIAL DIVERSIFIED FUNDS
Conservative Growth Fund
PRUDENTIAL EQUITY INCOME FUND Moderate Growth Fund
High Growth Fund
PRUDENTIAL INDEX SERIES FUND
Prudential Small-Cap Index Fund THE PRUDENTIAL INVESTMENT PORTFOLIOS,
Prudential Stock Index Fund INC.
Prudential Active Balanced Fund
THE PRUDENTIAL INVESTMENT PORTFOLIOS,
INC. GLOBAL FUNDS
Prudential Jennison Growth Fund
Prudential Jennison Equity GLOBAL STOCK FUNDS
Opportunity Fund
PRUDENTIAL DEVELOPING MARKETS FUND
PRUDENTIAL MID-CAP VALUE FUND Prudential Developing Markets
Equity Fund
PRUDENTIAL REAL ESTATE SECURITIES FUND Prudential Latin America Equity Fund
PRUDENTIAL SECTOR FUNDS, INC. PRUDENTIAL EUROPE GROWTH FUND, INC.
Prudential Financial Services Fund
Prudential Health Services Fund PRUDENTIAL GLOBAL GENESIS FUND, INC.
Prudential Technology Fund
Prudential Utility Fund PRUDENTIAL INDEX SERIES FUND
Prudential Europe Index Fund
PRUDENTIAL TAX-MANAGED SMALL CAP Prudential Pacific Index Fund
FUND, INC.
PRUDENTIAL SMALL COMPANY VALUE PRUDENTIAL NATURAL RESOURCES
FUND, INC. FUND, INC.
PRUDENTIAL TAX-MANAGED FUNDS PRUDENTIAL PACIFIC GROWTH FUND, INC.
Prudential Tax-Managed Equity Fund
PRUDENTIAL WORLD FUND, INC.
PRUDENTIAL 20/20 FOCUS FUND Prudential Global Growth Fund
NICHOLAS-APPLEGATE FUND, INC. Prudential International Value Fund
Nicholas-Applegate Growth Equity Fund Prudential Jennison International
Growth Fund
TARGET FUNDS
Large Capitalization Growth Fund GLOBAL UTILITY FUND, INC.
Large Capitalization Value Fund TARGET FUNDS
Small Capitalization Growth Fund International Equity Fund
Small Capitalization Value Fund
GLOBAL BOND FUNDS
PRUDENTIAL GLOBAL TOTAL RETURN
FUND, INC.
PRUDENTIAL INTERNATIONAL BOND
FUND, INC.
--------------------------------------------------------------------------------
20 Prudential Institutional Liquidity (Telephone)(800) 521-7466
Portfolio, Inc.
<PAGE>
--------------------------------------------------------------------------------
The Prudential Mutual Fund Family
--------------------------------------------------------------------------------
BOND FUNDS MONEY MARKET FUNDS
TAXABLE BOND FUNDS TAXABLE MONEY MARKET FUNDS
PRUDENTIAL TOTAL RETURN BOND FUND, INC. CASH ACCUMULATION TRUST
Liquid Assets Fund
PRUDENTIAL GOVERNMENT INCOME FUND, INC. National Money Market Fund
PRUDENTIAL GOVERNMENT SECURITIES TRUST PRUDENTIAL GOVERNMENT SECURITIES TRUST
Short-Intermediate Term Series Money Market Series
U.S. Treasury Money Market Series
PRUDENTIAL HIGH YIELD FUND, INC.
PRUDENTIAL SPECIAL MONEY MARKET
PRUDENTIAL HIGH YIELD TOTAL RETURN FUND, INC.
FUND, INC. Money Market Series
PRUDENTIAL INDEX SERIES FUND PRUDENTIAL MONEYMART ASSETS, INC.
Prudential Bond Market Index Fund
TAX-FREE MONEY MARKET FUNDS
PRUDENTIAL SHORT-TERM CORPORATE
BOND FUND, INC. PRUDENTIAL TAX-FREE MONEY FUND, INC.
Income Portfolio
PRUDENTIAL CALIFORNIA MUNICIPAL FUND
TARGET FUNDS California Money Market Series
Total Return Bond Fund
PRUDENTIAL MUNICIPAL SERIES FUND
TAX-EXEMPT BOND FUNDS Connecticut Money Market Series
Massachusetts Money Market Series
PRUDENTIAL CALIFORNIA MUNICIPAL FUND New Jersey Money Market Series
California Series New York Money Market Series
California Income Series
COMMAND FUNDS
PRUDENTIAL MUNICIPAL BOND FUND
High Income Series COMMAND MONEY FUND
Insured Series
COMMAND GOVERNMENT FUND
PRUDENTIAL MUNICIPAL SERIES FUND
Florida Series COMMAND TAX-FREE FUND
Massachusetts Series
New Jersey Series INSTITUTIONAL MONEY MARKET FUNDS
New York Series
North Carolina Series PRUDENTIAL INSTITUTIONAL LIQUIDITY
Ohio Series PORTFOLIO, INC.
Pennsylvania Series Institutional Money Market Series
PRUDENTIAL NATIONAL MUNICIPALS FUND, INC.
--------------------------------------------------------------------------------
21
<PAGE>
FOR MORE INFORMATION
Please read this prospectus before you
invest in the Fund and keep it for future
reference. For information or shareholder
questions contact
PRUDENTIAL MUTUAL FUND SERVICES LLC
ATTN: INSTITUTIONAL SERVICE DIVISION
P.O. BOX 15030
NEW BRUNSWICK, NJ 08906
(800) 521-7466
(732) 482-7555 (Calling from outside the U.S.)
Outside Brokers should contact
PRUDENTIAL INVESTMENT MANAGEMENT
SERVICES LLC
P.O. BOX 15035
NEW BRUNSWICK, NJ 08906
(800) 778-8769
Visit Prudential's website at:
http://www.prudential.com
Additional information about the Fund can
be obtained without charge and can be
found in the following documents
STATEMENT OF ADDITIONAL INFORMATION (SAI)
(incorporated by reference into this
prospectus)
ANNUAL REPORT
SEMI-ANNUAL REPORT
MF1371
You can also obtain copies of Fund
documents from the Securities and
Exchange Commission as follows:
BY MAIL
Securities and Exchange Commission
Public Reference Section
Washington, DC 20549-0102
BY ELECTRONIC REQUEST
[email protected]
(The SEC charges a fee to copy
documents.)
IN PERSON
PUblic Reference Room in Washington, DC
(For hours of operation, call
1-(202) 942-8090
VIA THE INTERNET
on the EDGAR Database at
http://www.sec.gov
CUSIP Numbers NASDAQ Symbol
Class I Shares--744350-60-4 PLPXX
Investment Company Act File No. 811-5336
[SYMBOL] Printed on Recycled Paper
