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AIM INVESTMENT SECURITIES FUNDS
AIM HIGH YIELD FUND
AIM HIGH YIELD FUND II
AIM INCOME FUND
AIM INTERMEDIATE GOVERNMENT FUND
AIM MONEY MARKET FUND
AIM MUNICIPAL BOND FUND
AND
CLASS A SHARES OF AIM LIMITED MATURITY TREASURY FUND
Supplement dated November 3, 2000 to
the Statement of Additional Information dated June 1, 2000
as supplemented September 29, 2000
This supplement supersedes and replaces in its entirety the Supplement dated
September 29, 2000.
The following replaces in its entirety the second paragraph appearing under the
heading "INVESTMENT STRATEGIES AND RISKS -- MUNICIPAL BOND" on page 16 of the
Statement of Additional Information:
"For purposes of the Fund's investment policies and limitations, the
term "municipal bonds" includes debt obligations of varying maturities
issued to obtain Funds for various public purposes, including the
construction of a wide range of public facilities, the refunding of
outstanding obligations, the obtaining of Funds for general operating
expenses and the lending of such Funds to other public institutions and
facilities. In addition, certain types of industrial development bonds are
issued by or on behalf of public authorities to obtain funds to provide
for the construction, equipment, repair or improvement of privately
operated facilities ("private activity bonds"). Such obligations are
considered to be municipal bonds appropriate for investment by the Fund,
provided that the interest paid thereon, in the opinion of bond counsel,
is exempt from federal income taxes.
The Fund may also invest in municipal lease obligations, which may
take the form of a lease, an installment purchase or a conditional sales
contract. Municipal lease obligations are issued by state and local
governments and authorities to acquire land, equipment and facilities such
as state and municipal vehicles, telecommunications and computer
equipment, and other capital assets. Interest payments on qualifying
municipal leases are exempt from federal income taxes. The Fund may
purchase these obligations directly, or they may purchase participation
interests in such obligations. Municipal leases are generally subject to
greater risks than general obligation or revenue bonds. State laws set
forth requirements that states or municipalities must meet in order to
issue municipal obligations, and such obligations may contain a covenant
by the issuer to budget for, appropriate, and make payments due under the
obligation. However, certain municipal lease obligations may contain
"non-appropriation" clauses which provide that the issuer is not obligated
to make payments on the obligation in future years unless funds have been
appropriated for this purpose each year. Accordingly, such obligations are
subject to "non-appropriation" risk. While municipal leases are secured by
the underlying capital asset, it may be difficult to dispose of such
assets in the event of non-appropriation or other default. All direct
investments by the Fund in municipal lease obligations shall be deemed
illiquid and shall be valued according to the Fund's Procedures for
Valuing Securities current at the time of such valuation.
As used in this Statement of Additional Information, interest
which is "tax-exempt" or "exempt from federal income taxes" means interest
on municipal securities which is excluded
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from gross income for federal income tax purposes, but which may give rise
to federal alternative minimum tax liability. The principal and interest
payments on private activity bonds (such as industrial development or
pollution control bonds) are the responsibility of the industrial user
and, therefore, are not backed by the taxing power of the issuing
municipality. Such obligations are included within the term municipal
bonds if the interest paid thereon qualifies for exemption from federal
income tax, but the interest on private activity bonds will be considered
to be an item of preference for purposes of alternative minimum tax
liability under the Internal Revenue Code of 1986, as amended (the
"Code"). See "Dividends, Distributions and Tax Matters" below."
Effective October 10, 2000, The Bank of New York, 90 Washington Street, 11th
Floor, New York, New York 10286, will act as custodian of all securities and
cash of AIM Money Market Fund.
The following information replaces in its entirety the second paragraph
appearing under the heading "SALES CHARGES AND DEALER CONCESSIONS - ALL GROUPS
OF AIM FUNDS" on page 58 of the Statement of Additional Information:
"In addition to, or instead of, amounts paid to dealers as a
sales commission, AIM Distributors may, from time to time, at its expense
or as an expense for which it may be compensated under a distribution
plan, if applicable, pay a bonus or other consideration or incentive to
dealers. At the option of the dealer, such incentives may take the form of
payment for travel expenses, including lodging, incurred in connection
with trips taken by qualifying registered representatives and their
families to places within or outside the United States. The total amount
of such additional bonus payments or other consideration shall not exceed
0.25% of the public offering price of the shares sold or of average daily
net assets of the AIM Fund attributable to that particular dealer. Any
such bonus or incentive programs will not change the price paid by
investors for the purchase of the applicable AIM Fund's shares or the
amount that any particular AIM Fund will receive as proceeds from such
sales. Dealers may not use sales of the AIM Funds' shares to qualify for
any incentives to the extent that such incentives may be prohibited by the
laws of any state."
The following are added as new categories of purchasers who will not pay
initial sales charges on purchases of Class A shares, under the heading
"REDUCTIONS IN INITIAL SALES CHARGES - PURCHASES AT NET ASSET VALUE" on page 61
of the Statement of Additional Information:
"o Qualified State Tuition Programs created and maintained in
accordance with Section 529 of the U.S. Internal Revenue Code
of 1986, as amended; and
o Participants in select brokerage programs for defined
contribution plans and rollover IRAs who purchase shares
through an electronic brokerage platform offered by entities
with which AIM Distributors has entered into a written
agreement."
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