PRUDENTIAL INTERMEDIATE GLOBAL
INCOME FUND, INC.
(Class Z Shares)
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Prospectus dated September 16, 1996
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Prudential Intermediate Global Income Fund, Inc. (the Fund) is an open-end
management investment company, or a mutual fund, whose investment objective is
to seek to maximize total return, the components of which are current income and
capital appreciation. The Fund seeks to achieve its objective through investment
in a portfolio consisting primarily of U.S. Government securities and Foreign
Government securities. The Fund may also purchase and sell certain derivatives,
including put and call options on securities and foreign currencies and engage
in transactions involving futures contracts and options on such futures to hedge
its portfolio and to attempt to enhance return. See "How the Fund
Invests--Investment Objective and Policies." THE FUND IS NON-DIVERSIFIED AND MAY
INVEST MORE THAN 5% OF ITS TOTAL ASSETS IN THE SECURITIES OF ONE OR MORE
ISSUERS. INVESTMENT IN A NON-DIVERSIFIED PORTFOLIO INVOLVES GREATER RISK THAN
INVESTMENT IN A DIVERSIFIED PORTFOLIO. IN ADDITION, THE FUND MAY INVEST UP TO
10% OF ITS TOTAL ASSETS IN NON-INVESTMENT GRADE SECURITIES, WHICH MAY ENTAIL
ADDITIONAL RISKS. There can be no assurance that the Fund's investment objective
will be achieved. Investing in Foreign Government securities, options and
futures contracts involves considerations and possible risks which are different
from those ordinarily associated with investing in U.S. Government securities.
See "How the Fund Invests--Investment Objective and Policies."
THE FUND MAY ENGAGE IN SHORT-TERM TRADING AND ENTER INTO BANK BORROWINGS. THESE
TECHNIQUES MAY BE CONSIDERED SPECULATIVE AND MAY RESULT IN HIGHER RISKS AND
COSTS TO THE FUND. See "How the Fund Invests--Investment Objective and
Policies." The Fund's address is One Seaport Plaza, New York, New York 10292,
and its telephone number is (800) 225-1852.
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Class Z shares are offered exclusively for sale to a limited group of investors.
Only Class Z shares are offered through this Prospectus. The Fund also offers
Class A, Class B and Class C shares through the attached Prospectus dated March
1, 1996 (the Retail Class Prospectus) which is a part hereof.
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This Prospectus sets forth concisely the information about the Fund that a
prospective investor should know before investing. Additional information about
the Fund has been filed with the Securities and Exchange Commission in a
Statement of Additional Information, dated March 1, 1996, which information is
incorporated herein by reference (is legally considered a part of this
Prospectus) and is available without charge upon request to the Fund at the
address or telephone number noted above.
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Investors are advised to read this Prospectus and retain it for future
reference.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ADEQUACY OF THISPROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<PAGE>
FUND EXPENSES
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Class Z Shares
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SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price) ......................... None
Maximum Sales Load or Deferred Sales Load
Imposed on Reinvested Dividends ............................. None
Deferred Sales Load (as a percentage of
original purchase price or redemption price,
whichever is lower) ......................................... None
Redemption Fees ............................................... None
Exchange Fees ................................................. None
Class Z Shares
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ANNUAL FUND OPERATING EXPENSES*
(as a percentage of average net assets)
Management Fees ............................................... .75%
12b-1 Fees .................................................... None
Other Expenses ................................................ .50%
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Total Fund Operating Expenses ................................. 1.25%
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EXAMPLE 1 Year 3 Years 5 Years 10 Years
- ------- ------ ------- ------- --------
You would pay the following
expenses on a $1,000 investment,
assuming (1) 5% annual return
and (2) redemption at the end
of each time period .................... $13 $40 $69 $151
The above example is based on expenses expected to have been incurred if Class Z
shares had been in existence during the fiscal year ended December 31, 1995. The
example should not be considered a representation of past or future expenses.
Actual expenses may be greater or less than those shown.
The purpose of this table is to assist investors in understanding the various
costs and expenses that an investor in Class Z shares of the Fund will bear,
whether directly or indirectly. For more complete descriptions of the various
costs and expenses, see "How the Fund is Managed." "Other Expenses" includes an
estimate of operating expenses of the Fund, such as directors' and professional
fees, registration fees, reports to shareholders and transfer agency and
custodian (domestic and foreign) fees.
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* Estimated based on expenses expected to have been incurred if Class Z
shares had been in existence throughout the fiscal year ended December 31,
1995.
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2
<PAGE>
THE FOLLOWING INFORMATION SUPPLEMENTS "HOW THE FUND IS MANAGED--
DISTRIBUTOR" IN THE RETAIL CLASS PROSPECTUS:
Prudential Securities Incorporated (Prudential Securities) serves as the
Distributor of Class Z shares and incurs the expenses of distributing the Fund's
Class Z shares under a Distribution Agreement with the Fund, none of which is
reimbursed by or paid for by the Fund.
THE FOLLOWING INFORMATION SUPPLEMENTS "HOW THE FUND VALUES ITS SHARES" IN
THE RETAIL CLASS PROSPECTUS:
The NAV of Class Z shares will generally be higher than the NAV of Class A,
Class B or Class C shares as a result of the fact that Class Z shares are not
subject to any distribution and/or service fee. It is expected, however, that
the NAV of the four classes will tend to converge immediately after the
recording of dividends, which will differ by approximately the amount of the
distribution-related expense accrual differential among the classes.
THE FOLLOWING INFORMATION SUPPLEMENTS "TAXES, DIVIDENDS AND
DISTRIBUTIONS--TAXATION OF SHAREHOLDERS" IN THE RETAIL CLASS PROSPECTUS:
The Fund has obtained opinions of counsel to the effect that neither (i)
the conversion of Class B shares into Class A shares nor (ii) the exchange of
any class of the Fund's shares for any other class of its shares constitutes a
taxable event for federal income tax purposes. However, such opinions are not
binding on the Internal Revenue Service.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION UNDER "SHAREHOLDER
GUIDE--HOW TO BUY SHARES OF THE FUND" AND "SHAREHOLDER GUIDE--HOW TO SELL YOUR
SHARES" IN THE RETAIL CLASS PROSPECTUS:
Class Z shares of the Fund are available for purchase by the following
categories of investors:
(i) pension, profit sharing or other employee benefit plans qualified under
Section 401 of the Internal Revenue Code, deferred compensation and annuity
plans under Sections 457 and 403(b)(7) of the Internal Revenue Code, and
non-qualified plans for which the Fund is an available option (collectively,
Benefit Plans), provided such Benefit Plans (in combination with other plans
sponsored by the same employer or group of related employers) have at least $50
million in defined contribution assets;, (ii) participants in any fee-based
program sponsored by Prudential Securities or its affiliates which includes
mutual funds as investment options and for which the Fund is an available
option; and (iii) investors who are, or have executed a letter of intent to
become, shareholders of any series of The Prudential Institutional Fund
(Institutional Fund) on or before one or more series of Institutional Fund
reorganize or who on that date have investments in certain products for which
Institutional Fund provides exchangeability. After a Benefit Plan qualifies to
purchase Class Z shares, all subsequent purchases will be for Class Z shares.
In connection with the sale of Class Z shares, the Manager, the Distributor
or one of their affiliates may pay dealers, financial advisers and other persons
which distribute shares a finders' fee based on a percentage of the net asset
value of shares sold by such persons.
THE FOLLOWING INFORMATION SUPPLEMENTS "SHAREHOLDER GUIDE--HOW TO EXCHANGE
YOUR SHARES" IN THE RETAIL CLASS PROSPECTUS:
Class Z shareholders of the Fund may exchange their Class Z shares for
Class Z shares of other Prudential Mutual Funds on the basis of relative net
asset value. Shareholders who qualify to purchase Class Z shares (other than
participants in any fee-based program) will have their Class B and Class C
shares which are not subject to contingent deferred sales charges and their
Class A shares exchanged for Class Z shares on a quarterly basis. Participants
in any fee-based program for which the Fund is an available option will have
their Class A shares, if any, exchanged for Class Z shares when they elect to
have those assets become a part of the fee-based program. Upon leaving the
program (whether voluntarily or not), such Class Z shares (and, to the extent
provided for in the program, Class Z shares acquired through participation in
the program) will be exchanged for Class A shares at net asset value. Similarly,
participants in the PSI 401(k) Plan, an employee benefit plan sponsored by
Prudential Securities (the PSI 401(k) Plan), for which the Fund's Class Z shares
are an available option and who wish to transfer their Class Z shares out of the
PSI 401(k) Plan following separation from service (i.e., voluntary or
involuntary termination of employment or retirement) will have their Class Z
shares exchanged for Class A shares at net asset value. See "Shareholder
Guide--How to Exchange Your Shares--Special Exchange Privilege."
THE INFORMATION ABOVE ALSO SUPPLEMENTS THE INFORMATION UNDER "FUND
HIGHLIGHTS" IN THE RETAIL CLASS PROSPECTUS AS APPROPRIATE.
3
<PAGE>
No dealer, sales representative or any other person has been authorized to give
any information or to make any representations, other than those contained in
this Prospectus, in connection with the offer contained herein, and, if given or
made, such other information or representations must not be relied upon as
having been authorized by the Fund or the Distributor. This Prospectus does not
constitute an offer by the Fund or by the Distributor to sell or a solicitation
of any offer to buy any of the securities offered hereby in any jurisdiction to
any person to whom it is unlawful to make such offer in such jurisdiction.
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TABLE OF CONTENTS
Page
----
FUND HIGHLIGHTS .......................................................... 2
Risk Factors and Special Characteristics ............................... 2
FUND EXPENSES ............................................................ 5
FINANCIAL HIGHLIGHTS ..................................................... 6
HOW THE FUND INVESTS ..................................................... 9
Investment Objective and Policies ...................................... 9
Risk Factors ........................................................... 13
Other Investments and Investment Techniques ............................ 15
Hedging and Return Enhancement Strategies .............................. 17
Portfolio Turnover and Brokerage ....................................... 20
Investment Restrictions ................................................ 20
HOW THE FUND IS MANAGED .................................................. 20
Manager ................................................................ 20
Distributor ............................................................ 21
Portfolio Transactions ................................................. 23
Custodian and Transfer and Dividend Disbursing Agent ................... 23
HOW THE FUND VALUES ITS SHARES ........................................... 23
HOW THE FUND CALCULATES PERFORMANCE ...................................... 24
TAXES, DIVIDENDS AND DISTRIBUTIONS ....................................... 24
GENERAL INFORMATION ...................................................... 26
Description of Common Stock ............................................ 26
Additional Information ................................................. 27
SHAREHOLDER GUIDE ........................................................ 27
How to Buy Shares of the Fund .......................................... 27
Alternative Purchase Plan .............................................. 28
How to Sell Your Shares ................................................ 31
Conversion Feature--Class B Shares ..................................... 34
How to Exchange Your Shares ............................................ 35
Shareholder Services ................................................... 36
DESCRIPTION OF SECURITY RATINGS .......................................... A-1
THE PRUDENTIAL MUTUAL FUND FAMILY ........................................ B-1
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MF 155Z 4445810
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CUSIP No.: Class Z:74435G500
---------------------------------
PRUDENTIAL
INTERMEDIATE
GLOBAL
INCOME
FUND, INC.
(Class Z Shares)
--------------
PROSPECTUS
September 16, 1996
--------------
PRUDENTIAL MUTUAL FUNDS
BUILDING YOUR FUTURE [logo]
ON OUT STRENGTH(sm)
<PAGE>
PRUDENTIAL INTERMEDIATE GLOBAL INCOME FUND, INC.
Supplement dated September 16, 1996 to
Prospectus dated March 1, 1996
The following information supplements "Financial Highlights" in the
Prospectus:
FINANCIAL HIGHLIGHTS
(Class A, Class B And Class C Shares)
(for a share outstanding throughout each of the indicated periods)
The following financial highlights for Class A, Class B and Class C shares
are unaudited. This information should be read in conjunction with the financial
statements and notes thereto, which appear in the Statement of Additional
Information. The following financial highlights contain selected data for a
Class A, Class B and Class C share of common stock outstanding, total return,
ratios to average net assets and other supplemental data for the period
indicated. The information is based on data contained in the financial
statements. No Class Z shares were outstanding during the indicated period.
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<TABLE>
<CAPTION>
Six-months Ended
June 30, 1996 (Unaudited)
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Class A Class B Class C
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<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ................ $ 8.30 $ 8.31 $8.31
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INCOME FROM INVESTMENT OPERATIONS
Net investment income(a) ............................ .27 .24 .24
Net realized and unrealized gain (loss)
on investment and foreign currency transactions.... (.02) (.02) (.02)
-------- ------- -----
Total from investment operations .................. .25 .22 .22
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LESS DISTRIBUTIONS
Dividends from net investment income ................ (.26) (.23) (.23)
Distributions in excess of net investment income.... -- -- --
Tax return of capital distributions ................. -- -- --
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Total distributions ............................... (.26) (.23) (.23)
-------- ------- -----
Net asset value, end of period ...................... $ 8.29 $ 8.30 $8.30
======== ======= =====
TOTAL RETURN(b): .................................... 2.92% 2.63% 2.63%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) ..................... $166,658 $15,165 $ 170
-------- ------- -----
Average net assets (000) ............................ $174,047 $16,547 $ 77
Ratios to average net assets(a)/(c):
Expenses, including distribution fees ............. 1.42% 2.02% 2.02%
Expenses, excluding distribution fees ............. 1.27% 1.27% 1.27%
Net investment income ............................. 6.48% 5.88% 5.88%
Portfolio turnover rate ............................. 23% 23% 23%
</TABLE>
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(a) Net of fee waiver.
(b) Total return does not consider the effect of sales loads. 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 periods of less than a full year are not
annualized.
(c) Annualized.
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1
<PAGE>
THE FOLLOWING INFORMATION SUPPLEMENTS "GENERAL INFORMATION--DESCRIPTION OF
COMMON STOCK" IN THE PROSPECTUS:
The Fund is authorized to offer an unlimited number of shares of beneficial
interest, divided into four classes of shares, designated Class A, Class B,
Class C and Class Z shares. Each class represents an interest in the same assets
of the Fund and is identical in all respects except that (i) each class is
subject to different sales charges and distribution and/or service fees (except
for Class Z shares which are not subject to any sales charges and distribution
and/or service fees), which may affect performance, (ii) each class has
exclusive voting rights on any matter submitted to shareholders that relates
solely to its arrangement and has separate voting rights on any matter submitted
to shareholders in which the interest of one class differ from the interests of
any other class, (iii) each class has a different exchange privilege, (iv) only
Class B shares have a conversion feature and (v) Class Z shares are offered
exclusively for sale to a limited group of investors. For more information about
Class Z shares, contact your Prudential Securities financial adviser or Prusec
representative or telephone the Fund at (800) 225-1852. Participants in programs
sponsored by Prudential Retirement Services should contact their client
representative for more information about Class Z shares. Since Class B and
Class C shares generally bear higher distribution expenses than Class A shares,
the liquidation proceeds to shareholders of those classes are likely to be lower
than to Class A shareholders and to Class Z shareholders, whose shares are not
subject to any distribution and/or service fee. In accordance with the Fund's
Articles of Incorporation, the Directors may authorize the creation of
additional series and classes of shares within such series, with such
preferences, privileges, limitations and voting and dividend rights as the
Directors may determine.
THE FOLLOWING INFORMATION SUPPLEMENTS "HOW THE FUND CALCULATES PERFORMANCE"
IN THE RETAIL PROSPECTUS:
The Fund may include comparative performance information in advertising or
marketing the Fund's shares. The Fund may include performance information about
each of the Fund's classes and is no longer required to include performance data
for all classes of shares in any advertisement or other information including
performance data of the Fund. See "How the Fund Calculates Performance."
THE FOLLOWING INFORMATION SUPPLEMENTS "SHAREHOLDER INVESTMENT ACCOUNT--
EXCHANGE PRIVILEGE" IN THE STATEMENT OF ADDITIONAL INFORMATION:
CLASS Z. Class Z shares may be exchanged for Class Z shares of other
Prudential Mutual Funds.
MF155C-1(9/16/96)
2
<PAGE>
PRUDENTIAL INTERMEDIATE GLOBAL INCOME FUND, INC.
Supplement dated September 16, 1996 to
Statement of Additional Information dated March 1, 1996
THE FOLLOWING INFORMATION SUPPLEMENTS "DIRECTORS AND OFFICERS" IN THE
STATEMENT OF ADDITIONAL INFORMATION:
As of July 26, 1996, the Directors and officers of the Fund, as a group,
owned beneficially less than 1% of the outstanding shares of common stock of the
Fund.
As of July 26, 1996, Prudential Securities was record holder for other
beneficial owners of 10,758,532 Class A shares (or 54% of the outstanding Class
A shares), 1,387,140 Class B shares (or 77% of the outstanding Class B shares)
and 14,315 Class C shares (or 99% of the outstanding Class C shares) of the
Fund. In the event of any meetings of shareholders, Prudential Securities will
forward, or cause the forwarding of, proxy materials to the beneficial owners
for which it is the record holder.
As of July 26, 1996, the beneficial owners, directly or indirectly, of more
than 5% of the outstanding shares of any class of common stock were: Dr. Urban
Scheuring, 2600 Torrey Pines Rd B-28, La Jolla, CA 92037-3403 who held 922 Class
C shares of the Fund (6.4%); Robert L. Mofenson TTEE, FBO Robert L. Mofenson,
P.O. Box 1103, Great Neck, NY 11023-0103 who held 1,526 Class C shares of the
Fund (10.5%); John Reis & Kathleen Reis Jt Ten, 10859 Patowmack Dr., Great
Falls, VA 22066-3034 who held 6,404 Class C shares of the Fund (4.4%); and Mrs.
Pamela Thayer, 2938 Cherry Lane, Northbrook, IL 60062-4312 who held 5,463 Class
C shares of the Fund (37.7%).
As of September 16, 1996, Prudential Mutual Fund Management, Inc., located
at One Seaport Plaza, New York, N.Y. 10292, owned all of the Fund's outstanding
Class Z shares and therefore controlled Class Z of the Fund.
THE FOLLOWING INFORMATION SUPPLEMENTS "DISTRIBUTOR" IN THE STATEMENT OF
ADDITIONAL INFORMATION:
Prudential Securities serves as the Distributor of Class Z shares and
incurs the expenses of distributing the Fund's Class Z shares under a
Distribution Agreement with the Fund, none of which are reimbursed by or paid
for by the Fund.
THE FOLLOWING INFORMATION SUPPLEMENTS "PURCHASE AND REDEMPTION OF FUND
SHARES" IN THE STATEMENT OF ADDITIONAL INFORMATION:
Shares of the Fund may be purchased at a price equal to the next determined
net asset value per share plus a sales charge which, at the election of the
investor, may be imposed either (i) at the time of purchase (Class A shares) or
(ii) on a deferred basis (Class B or Class C shares). Class Z shares of the Fund
are offered to a limited group of investors at net asset value without any sales
charges. See "Shareholder Guide--How to Buy Shares of the Fund" in the
Prospectus.
Each class of shares represents an interest in the same assets of the Fund
and is identical in all respects except that (i) each class is subject to
different sales charges and distribution and/or service fees (except for Class Z
shares which are not subject to any sales charges and distribution or service
fees), which may affect performance, (ii) each class has exclusive voting rights
on any matter submitted to shareholders that relates solely to its arrangements
and has separate voting rights on any matter submitted to shareholders in which
the interests of one class differ from the interests of any other class, (iii)
each class has a different exchange privilege, (iv) only Class B shares have a
conversion feature and (v) Class Z shares are offered exclusively for sale to a
limited group of investors. See "Distributor" and "Shareholder Investment
Account--Exchange Privilege."
SPECIMEN PRICE MAKE-UP SHEET
Under the current distribution arrangements between the Fund and the
Distributor, Class A shares are sold with a maximum sales charge of 5% and Class
B*, Class C* and Class Z** shares are sold at net asset value. Using the Fund's
net asset value at June 30, 1996, the maximum offering price of the Fund's
shares is as follows:
CLASS A
Net asset value and redemption price per Class A share ............... $8.29
Maximum sales charge (5% of offering price) .......................... .26
-----
Offering price to public ............................................. $8.55
=====
CLASS B
Net asset value, offering price and redemption price
per Class B share* ................................................. $8.30
=====
CLASS C
Net asset value, offering price and redemption price
per Class C share* ................................................. $8.30
=====
CLASS Z
Net asset value, offering price and redemption price
per Class Z share* ................................................. $8.30
=====
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* Class B and Class C shares are subject to a contingent deferred sales charge
on certain redemptions. See "Shareholder Guide--How to Sell Your
Shares--Contingent Deferred Sales Charges" in the Prospectus.
** Class Z shares did not exist prior to June 30, 1996.
THE FOLLOWING INFORMATION SUPPLEMENTS "SHAREHOLDER INVESTMENT ACCOUNT--
EXCHANGE PRIVILEGE" IN THE STATEMENT OF ADDITIONAL INFORMATION:
CLASS Z. Class Z shares may be exchanged for Class Z shares of other
Prudential Mutual Funds.
MF155C-2(9/16/96)
