SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 10, 1999
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Prospect Street High Income Portfolio Inc.
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(Exact name of registrant as specified in its charter)
Maryland 811-5557 04-302-8343
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
60 State Street, Boston, Massachusetts 02109
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Address of principal executive offices
Registrant's telephone number, including area code: (617) 742-3800
N/A
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(Former name or former address, if changed since last report.)
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Item 5. Other Events
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On December 10, 1999 Prospect Street High Income Portfolio
Inc. (the "Fund") announced that it has reduced its monthly cash dividend on its
Common Stock, $.01 par value, from $.105 to $.095 per share.
A copy of the press release announcing the foregoing is being
filed as an exhibit to this Form 8-K.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
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Exhibit 99 - Press Release dated December 10, 1999.
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SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
PROSPECT STREET HIGH INCOME
PORTFOLIO INC.
Dated: December 15, 1999 By: /s/ John A. Frabotta
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John A. Frabotta
Vice President, Treasurer,
Chief Investment Officer and
Chief Financial Officer
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FOR IMMEDIATE RELEASE
CONTACT: Karen J. Thelen Boston, Massachusetts
Prospect Street Investment Management Co., Inc. December 10, 1999
(617) 742-3800
Prospect Street High Income Portfolio Inc. (NYSE "PHY"), a diversified,
closed-end management company (the "Fund"), announced today that it has reduced
its monthly cash dividend on its common stock $.01 par value from $.105 to $.095
per share. This dividend of $.095 per share is payable on December 31, 1999 to
holders of record at the close of business on December 21, 1999.
Richard E. Omohundro, Jr., President of the Fund and President of
Prospect Street Investment Co., Inc. (PSIM), the Fund's Adviser, stated that it
remains the policy of the Fund to make distributions to common shareholders
which, on an annual basis, do not exceed net investment income on a tax basis.
Distributions on common stock are declared based on annual projections of the
Fund's taxable net investment income. However, as a result of several factors,
it is likely that the previous distribution rate of $.105 would exceed net
investment income in the current fiscal year. These factors include generally
prevailing adverse market conditions, attributable to higher interest rates,
higher default rates and diminished liquidity in the high yield sector; and
defaulted interest payments and related non-accrual of investment income with
respect to several Fund portfolio investments. The Board of Directors will
continue to monitor the Fund's dividend policy on a regular basis in the light
of its current net investment income.
On October 4, 1999, the Fund announced that PSIM had entered into an
agreement to sell certain of its assets and goodwill relating to the management
of the Fund to Highland Capital Management, L.P. ("Highland") of Dallas, Texas
(the "Transaction"). Such Transaction is scheduled to close on January 21, 2000,
following stockholder approval of a new advisory agreement with Highland and the
election of new directors, both of which are anticipated to occur on December
17,
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1999. The Transaction is also subject to certain other conditions, including the
refinancing by the Fund of its outstanding $50 million senior loan facility.
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