Securities Act File No.333-61831
Pilgrim Prime Rate Trust
Supplement dated August 6, 1999
to the Prospectus dated June 18, 1999
Acquisition of Pilgrim Capital Corporation by ReliaStar Financial Corp.
On July 22, 1999, Pilgrim Capital Corp. (NYSE: PFX), the parent company of
Pilgrim Investments, Inc., which is the adviser to Pilgrim Prime Rate Trust (the
"Trust"), entered into an agreement under which it will be acquired by ReliaStar
Financial Corp. (NYSE: RLR). ReliaStar Financial Corp. is a Minneapolis-based
holding company whose subsidiaries offer individuals and institutions life
insurance and annuities, employee benefits products and services, life and
health reinsurance, retirement plans, mutual funds, bank products and personal
finance education. Based on revenues, ReliaStar Financial Corp. is the 8th
largest publicly held life insurance holding company in the United States and at
March 31, 1999, had $23.2 billion in assets under management and life insurance
in force of $304.7 billion. Completion of the acquisition is contingent upon,
among other things, approval by the Trustees and the shareholders of the Trust
and certain regulatory approvals. The closing of the acquisition is expected to
occur during the fourth quarter of 1999.
Pilgrim Investments as an organization will survive the transaction.
Pilgrim Investments does not currently anticipate that there will be any changes
in the personnel primarily responsible for management of the Trust as a result
of the acquisition. As a result of the transaction, Pilgrim Investments may get
access to the resources and investment expertise of Northstar Investment
Management Corporation, an investment adviser that is a subsidiary of ReliaStar.
Under the provisions of the advisory contract between the Trust and Pilgrim
Investments, the agreement will terminate automatically at the time of the
acquisition. As a result, the Board of Trustees on August 2, 1999 approved a new
advisory contract between the Trust and Pilgrim Investments which, subject to
shareholder approval, will take effect immediately after the acquisition. The
contract is substantially the same as that currently in effect. A shareholder
meeting has been scheduled in November to approve the new agreement.
