SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant X
Filed by a party other than the registrant
Check the appropriate box:
Preliminary proxy statement
X Definitive proxy statement
Definitive additional materials
Soliciting material pursuant to Rule 14a-11(c)
or Rule 14a-12
SAFECO Taxable Bond Trust
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
X No fee required.
No Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and O-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction
applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act
Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
Fee paid previously with preliminary materials:
Check box if any part of the fee is offset as provided
by Exchange Act Rule 0-11(a)(2) and identify the
filing for which the offsetting fee was paid
previously. Identify the previous filing by
registration statement number, or the form or schedule
and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement no.:
(3) Filing Party:
(4) Date Filed:
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[SAFECO Mutual Funds Letterhead]
Dear Shareholder:
Enclosed you will find a proxy statement asking you to approve a revision
to one of the SAFECO High-Yield Bond Fund's fundamental investment policies. As
the enclosed materials explain in more detail, the proposed change will allow
your Fund to remain competitive in the high-yield marketplace by removing the
restriction on the Fund's purchase of private placement debt which is qualified
for trading under the Securities and Exchange Commission Rule 144A.
Over the past few years, a growing sector of the high-yield bond market has
been comprised of this private high-yield debt known as Rule 144A bonds. Under
the SEC's Rule 144A, companies can market their debt to sophisticated investors,
such as mutual funds, in private sales much more quickly than if the issue is
sold to individual investors. Rule 144A bonds are subject to legal restrictions
on resale, but because they can be resold to qualified private buyers (which
make up a significant portion of the high-yield market), this restriction does
not materially affect a bond's liquidity. In short, the removal of the Fund's
restriction on the purchase of these bonds will allow your Fund to participate
more fully in the high-yield market without significantly compromising the
liquidity of the securities it holds.
Regardless of how many shares you own, or your position on the issue
discussed in the proxy, it is very important that you vote. Please sign and
return the proxy voting card in the enclosed postage-paid envelope today. If you
have any questions before you vote, please call a Shareholder Services
Representative toll free at 1-800-624-5711.
Sincerely,
/s/Boh A. Dickey
Boh A. Dickey
Chairman
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SAFECO TAXABLE BOND TRUST
SAFECO High-Yield Bond Fund
NOTICE OF
SPECIAL MEETING OF SHAREHOLDERS
To Be Held On
April 10, 1997
TO THE SHAREHOLDERS:
A special meeting of the holders of shares of beneficial interest of SAFECO
High-Yield Bond Fund (the "Fund"), a series of SAFECO Taxable Bond Trust (the
"Trust"), will be held at the offices of the Trust, SAFECO Plaza, Seattle, WA
98185, on April 10, 1997, at 9:00 a.m., Pacific time, for the purpose of
considering the revision of the Fund's fundamental investment restriction on
investment in securities subject to legal or contractual restrictions on resale
to exclude Rule 144A securities determined to be liquid pursuant to guidelines
adopted by the Trust's Board of Trustees and to transact such other business as
may properly come before the meeting and any adjournments thereof.
You are entitled to vote at the meeting if you owned shares of beneficial
interest of the Fund at the close of business on February 20, 1997. If you
attend the meeting, you may vote your shares in person. If you do not expect to
attend the meeting, please complete, date, sign and return the enclosed proxy
card in the enclosed postage-paid envelope.
By order of the Board,
/s/David F. Hill
David F. Hill
President
February 24, 1997
SAFECO Plaza
Seattle, WA 98185
<PAGE>
Instructions for Signing Proxy Cards
The following general rules for signing proxy cards may be of assistance to
you and may help avoid the time and expense involved in validating your vote if
you fail to sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it appears in the
registration on the proxy card.
2. Joint Accounts: Each party should sign, and the names of the parties
signing should conform exactly to the names shown in the registration on the
proxy card.
3. All Other Accounts: The capacity of the individual signing the proxy
card should be indicated unless it is reflected in the form of registration. For
example:
Registration Valid Signature
Corporate Accounts
(1) ABC Corp. ABC Corp.
John Doe, Treasurer
(2) ABC Corp. John Doe, Treasurer
(3) ABC Corp. John Doe, Treasurer
c/o John Doe
(4) ABC Corp. Profit Sharing Plan John Doe, Trustee
Partnership Accounts
(1) The XYZ Partnership Jane B. Smith, Partner
(2) Smith and Jones, Limited Partnership Jane B. Smith, General Partner
Trust Accounts
(1) ABC Trust Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee Jane B. Doe, Trustee
u/t/d 12/28/78
Custodial or Estate Accounts
(1) John B. Smith, Cust. John B. Smith
f/b/o John B. Smith, Jr.,
UGMA/UTMA
(2) Estate of John B. Smith John B. Smith, Jr., Executor
<PAGE>
SAFECO TAXABLE BOND TRUST
SAFECO High-Yield Bond Fund
SAFECO Plaza
Seattle, WA 98185
PROXY STATEMENT
Special Meeting of Shareholders to be Held on April 10, 1997
This proxy statement is being furnished to holders of shares of beneficial
interest ("Shares") of the SAFECO High-Yield Bond Fund (the "Fund"), a series of
SAFECO Taxable Bond Trust (the "Trust"), in connection with the solicitation by
the Trust's Board of Trustees of proxies to be used at a special meeting (the
"Meeting") of shareholders to be held on April 10, 1997, at 9:00 a.m., Pacific
time, or any adjournment or adjournments thereof. This proxy statement is being
first mailed to shareholders on or about February 28, 1997.
The Trust is a registered, management investment company under the
Investment Company Act of 1940, as amended ("1940 Act"), and is organized as a
Delaware business trust. The Trust is comprised of three separate series, one of
which is the Fund.
The Fund's investment adviser is SAFECO Asset Management Company ("SAM").
The distributor for the Fund's shares is SAFECO Securities, Inc. ("SAFECO
Securities"). The transfer, dividend and distribution disbursement and
shareholder servicing agent for the Fund is SAFECO Services Corporation ("SAFECO
Services"). SAM, SAFECO Securities and SAFECO Services are wholly-owned
subsidiaries of SAFECO Corporation (a holding company whose primary subsidiaries
are engaged in the insurance and financial services businesses) and are each
located at SAFECO Plaza, Seattle, Washington, 98185.
VOTING INFORMATION
The presence, in person or by proxy, of a majority of the Shares of the
Fund outstanding and entitled to vote will constitute a quorum for the
transaction of business at the Meeting.
In the event that a quorum is not present at the Meeting, or if a quorum is
present at the Meeting but sufficient votes to approve the proposal are not
received, the persons named as proxies may propose one or more adjournments of
the Meeting to permit further solicitation of proxies. Any adjournment will
require the affirmative vote of a majority of those Shares represented at the
Meeting in person or by proxy. The persons named as proxies will vote those
proxies which they are entitled to vote FOR any proposal in favor of the
adjournment and will vote those proxies required to be voted AGAINST any
proposal against the adjournment.
Broker non-votes are Shares held in street name for which the broker
indicates that instructions have not been received from the beneficial owners or
other persons entitled to vote, and the broker does not have discretionary
voting authority. Abstentions and broker non-votes will be counted as Shares
present for purposes of determining whether a quorum is present but will not be
voted for or against any adjournment or proposal. Accordingly, abstentions and
broker non-votes will have no effect when the required vote is a plurality or
majority of the votes cast, but effectively will be a vote against adjournment
and against a Proposal for which the required vote is a percentage of the Shares
present or outstanding.
Each full Share of the Fund outstanding is entitled to one vote and each
fractional Share of the Fund outstanding is entitled to a proportionate share of
one vote with respect to any matter to be voted upon by the shareholders of the
Fund. Approval of the revision contemplated by the Proposal below requires the
affirmative vote of a "majority of the outstanding voting securities" of the
Fund, as defined in the 1940 Act, which means the affirmative vote of the lesser
of (1) more than 50% of the outstanding Shares of the Fund or (2) 67% or more of
the Shares of the Fund present at the Meeting if more than 50% of the
outstanding Shares of the Fund are represented at the Meeting in person or by
proxy.
The individuals named as proxies on the enclosed proxy card will vote in
accordance with your direction as indicated thereon, if your proxy card is
received properly executed by you or by your duly appointed agent or
attorney-in-fact. If you return the card and give no voting instructions, your
Shares will be voted FOR the proposal described in this proxy statement. You may
revoke your vote by giving another proxy or by letter or telegram revoking the
initial proxy. To be effective, your revocation must be received prior to the
Meeting and must indicate your name and account number. In addition, if you
attend the Meeting in person you may, if you wish, vote by ballot at the
Meeting, thereby canceling any proxy previously given.
As of February 20, 1997 ("Record Date"), there were 6,178,460 Shares
outstanding of the Fund. As of January 2, 1997, SAFECO Corporation owned 500,000
Shares of the Fund, which represented 8.8% of the Fund's outstanding Shares; and
Charles Schwab & Co., Inc., 101 Montgomery St., San Francisco, CA 94104, owned
877,930 shares of the Fund, which represented 15.4% of the Fund's outstanding
shares. As of February 20, 1997, the Trustees and officers of the Trust as a
group owned less than 1% of the outstanding Shares of the Fund.
Copies of the Fund's most recent annual report, including financial
statements, have previously been delivered to Shareholders. Shareholders of the
Fund may request a copy of the Fund's annual report, without charge, by writing
SAFECO Mutual Funds at P.O. Box 34890, Seattle, Washington 98124-1890, or by
calling 1-800-624-5711 or 1-800-438-8718 (Deaf and Hard of Hearing TTY/TDD
service).
<PAGE>
PROPOSAL - APPROVAL OF CHANGES TO FUNDAMENTAL
INVESTMENT RESTRICTION REGARDING INVESTMENT
IN SECURITIES SUBJECT TO RESTRICTIONS ON RESALE
Reasons for the Proposed Change. The Fund has adopted certain fundamental
investment restrictions and policies ("fundamental restrictions"), which are set
forth in the Fund's statement of additional information, and which may be
changed only with shareholder approval. One of these fundamental restrictions
prohibits the Fund from purchasing or otherwise acquiring securities which are
illiquid or subject to legal or contractual restrictions on resale, if as a
result more than 10% of the Fund's total assets would be invested in such
securities.
As the fundamental restriction is currently drafted, it includes restricted
securities which are legally eligible for resale under Rule 144A ("Rule 144A
securities"). Rule 144A under the Securities Act of 1933 ("1933 Act") provides
that certain securities that otherwise would be subject to restrictions on
resale may be sold to "qualified institutional buyers" as that term is defined
in Rule 144A. As a result of Rule 144A, a liquid trading market for many Rule
144A securities has developed among institutional buyers. However, increasing
the Fund's investment in Rule 144A securities could have the effect of
increasing the level of Fund illiquidity, to the extent that qualified
institutional buyers become, for a time, uninterested in purchasing these
securities.
Under guidelines adopted by the Board of Trustees, the Fund may invest in
Rule 144A securities SAM has determined are liquid. Under the guidelines,
factors which may be considered by SAM in determining the liquidity of Rule 144A
securities include: the frequency of trades and quotes for the security; the
number of dealers willing to purchase or sell the security; the number of
potential purchasers of the security; the willingness of dealers to make a
market in the security and the nature of marketplace trades of the security.
The effect of the fundamental restriction as currently drafted is to limit
unnecessarily the Fund's ability to purchase Rule 144A securities determined to
be liquid under guidelines adopted by the Board. This was not the intent or
purpose of the fundamental restriction, since these Rule 144A securities are
liquid even though they are subject to certain limitations on resale.
Furthermore, Rule 144A securities which have been determined to be liquid
pursuant to guidelines adopted by the Board are not required under federal or
state law to be included in a Fund's investment restriction limiting investment
in illiquid securities.
For these reasons, the Board of Trustees has determined that the Fund's
fundamental restriction regarding investment in illiquid and restricted
securities should be revised to clarify that the fundamental restriction does
not apply to Rule 144A securities purchased by the Fund which are determined to
be liquid pursuant to guidelines adopted by the Board. The Board is requesting
shareholder approval to effect this clarifying change.
The Board believes that approval of the proposal to revise the fundamental
restriction will enable SAM to take advantage of opportunities in the Rule 144A
market on behalf of the Fund that are currently not available to it. The Board
currently does not anticipate setting a specific investment limitation on the
purchase of liquid Rule 144A securities. If approved at the Special Meeting, the
revised fundamental restriction would become effective on April 30, 1997.
Current text of fundamental restriction:
The High-Yield Bond Fund will not:
Purchase or otherwise acquire securities which are illiquid or subject
to legal or contractual restrictions on resale, if as a result more
than ten percent (10%) of the Fund's total assets would be invested in
such securities.
Proposed text of fundamental restriction:
The High-Yield Bond Fund will not:
Purchase or otherwise acquire securities which are illiquid or subject
to legal or contractual restrictions on resale, if as a result more
than ten percent (10%) of the Fund's total assets would be invested in
such securities, except that the purchase of Rule 144A securities
deemed to be liquid pursuant to guidelines adopted by the Board of
Trustees of the High-Yield Fund shall not be limited by this
restriction.
THE BOARD OF TRUSTEES, INCLUDING THE INDEPENDENT TRUSTEES, RECOMMENDS THAT
SHAREHOLDERS VOTE "FOR" THE PROPOSAL.
ADDITIONAL INFORMATION
The solicitation of proxies, the cost of which will be borne by the Fund,
will be made primarily by mail but also may include telephone or oral
communications by regular employees of SAM, who will not receive any
compensation therefor from the Fund. Shareholders' votes may be taken by
telephone by SAM, subject to procedures designed to authenticate shareholders'
identities and confirm voting instructions.
SHAREHOLDER PROPOSALS
As a general matter, the Trust does not hold regular annual or other
meetings of shareholders. Any shareholder who wishes to submit proposals to be
considered at a special meeting of the Fund's shareholders should send the
proposals to the Fund at SAFECO Plaza, Seattle, Washington 98185, so as to be
received a reasonable time before the proxy solicitation for that meeting is
made. Shareholder proposals that are submitted in a timely manner will not
necessarily be included in the Fund's proxy materials. Inclusion of such
proposals is subject to limitations under the federal securities laws.
OTHER BUSINESS
Management knows of no business to be presented at the Meeting other than
the matter set forth in this proxy statement, but should any other matter
requiring a vote of shareholders arise, the proxies will vote thereon according
to their best judgment in the interest of the Fund.
By order of the Board,
/s/David F. Hill
David F. Hill
President
February 24, 1997
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It is important that you execute and return your proxy promptly.
- --------------------------------------------------------------------------------
<PAGE>
SAFECO TAXABLE BOND TRUST
SAFECO High-Yield Bond Fund
The undersigned hereby appoints Boh A. Dickey and David F. Hill, each with
full power of substitution, as proxies to attend the Special Meeting of
Shareholders of the SAFECO High-Yield Bond Fund (the "Fund"), to be held at the
SAFECO Auditorium, SAFECO Plaza, Seattle, WA at 9:00 a.m. on April 10, 1997 or
any adjournment thereof, and to represent and vote all of the shares of the Fund
that the undersigned would be entitled to vote if personally present in the
transaction of such business as may properly come before said meeting.
Approval of the revision of the Fund's ____ FOR ____ AGAINST ____ ABSTAIN
fundamental policy regarding investment
in securities which are illiquid or
subject to legal or contractual restrictions
on resale to exclude Rule 144A securities
determined to be liquid pursuant to
guidelines adopted by the Board.
THIS PROXY WILL BE VOTED AS DIRECTED. IF RETURNED UNMARKED, THIS PROXY WILL BE
CONSIDERED VOTED AS "FOR" THE ABOVE ITEM.
Discretionary authority is hereby conferred as to all other matters which may
properly come before this meeting. Any proxy previously given with respect to
the signer's shares is hereby revoked. This proxy may be exercised by a
majority of the Proxies designated above who are present at the meeting, or if
only one is present, then by that one. Receipt of Notice of Meeting is
acknowledged,
___________________________________
____________________________________ DATED _____________________
(Signatures of Shareholder(s))
IMPORTANT: Joint owners should each sign. When signing as attorney, executor,
administrator, trustee, guardian, or corporate officer, please give full title.
The Proxies named above cannot vote your shares unless you sign and return this
proxy.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
OF THE FUND.
