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): October 4, 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
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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 October 4, 1999 Prospect Street High Income Portfolio Inc. (the
"Fund") announced that its investment adviser, Prospect Street Investment
Management Co., Inc. has 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"). The Fund further announced that (i) the
Independent Directors of the Fund approved a new two-year advisory agreement
with Highland which will be submitted to shareholders of the Fund for their
approval at a special meeting of shareholders and (ii) C. William Carey had been
appointed as interim Chairman of the Board of Directors of the Fund.
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
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Exhibits
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Exhibit 99 - Press Release dated October 4, 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: October 6, 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
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Contact: Karen J. Thelen
Prospect Street High Income Portfolio Inc.
(617) 742-3800
PROSPECT STREET HIGH INCOME PORTFOLIO INC.
ANNOUNCES AGREEMENT BY ADVISER
BOSTON, MA, October 4, 1999 - Prospect Street High Income Portfolio Inc. (the
"Fund") (NYSE:PHY) announced today that its investment adviser, Prospect Street
Investment Management Co., Inc. ("PSIM") has 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. of Dallas, Texas ("Highland").
Mr. C William Carey, on behalf of the Independent Directors of the
Fund, stated that the Independent Directors were impressed with the quality of
the Highland organization. Highland is an investment manager for a number of
structured investment vehicles whose portfolios include high-yield securities
and senior debt securities of high-yield issuers. Highland has advised the Fund
that it manages approximately $5.5 billion in below-investment-grade
("high-yield") fixed income portfolios, for institutional investors.
The Independent Directors of the Fund approved a new two-year advisory
agreement with Highland which will be submitted to the shareholders for their
approval at a special meeting of shareholders. The new advisory agreement will
provide for Highland to render its investment advisory services to the Fund in
accordance with the same advisory fee schedule currently in effect under its
advisory agreement with PSIM. The Independent Directors will also nominate six
additional directors for election at the Special Meeting of shareholders, four
of which will be "non-interested persons" within the meaning of the Investment
Company Act of 1940. The four current Independent Directors of the Fund will
continue to serve as Directors. The election of the additional directors at a
special stockholders' meeting will be contingent upon shareholder approval of
the new advisory agreement.
The transaction contemplated by PSIM is subject, among other things, to
shareholder approval of the new two-year advisory agreement with Highland.
The Board of Directors also appointed C. William Carey as interim
Chairman of the Board of Directors of the Fund.
