EATON VANCE PRIME RATE RESERVES
Supplement to Prospectus dated May 1, 1997
THE FOLLOWING INFORMATION AMENDS AND SUPPLEMENTS THE INFORMATION SET
FORTH IN THE SECTION "TENDER OFFER TO PURCHASE SHARES" IN THE PROSPECTUS.
From inception, the Fund's Board of Trustees has caused the Fund to
make DISCRETIONARY quarterly tender offers to repurchase a specific number of
shares at the net asset value determined at the close of the tender offer.
Although the Fund has conducted these offers quarterly since inception, there
have been no assurances that the Fund would do so.
On June 23, 1997, the Board of Trustees approved a new fundamental
policy whereby the Fund COMMITS to make regularly quarterly offers to repurchase
shares of the Fund. The Board of Trustees of Senior Debt Portfolio, in which the
Fund invests its assets, also approved this change for the Portfolio. Beginning
in September, 1997, the Fund has committed to make regular quarterly offers (in
FEBRUARY, MAY, AUGUST and NOVEMBER) to repurchase at least 5% and up to 25% of
the shares then outstanding of the Fund. The repurchase price will be the net
asset value (less any applicable early withdrawal charge) determined not more
than 14 days following the repurchase request deadline and payment for all
shares repurchased pursuant to these offers will be made not later than 7 days
after the repurchase pricing date. Under normal circumstances, it is expected
that net asset value will be determined on the repurchase request deadline and
payment for shares tendered will be made within 3 business days after a
repurchase request deadline. During the period the offer to repurchase is open
shareholders may obtain the current net asset value by calling 1-800-225-6265,
option 2 (fund #32).
At least 21 days prior to the repurchase request deadline the Fund will
mail written notice to each shareholder setting forth the number of shares the
Fund will repurchase, the repurchase request deadline and other terms of the
offer to repurchase, and the procedures for shareholders to follow to request a
repurchase.
The Board of Trustees of the Portfolio and the Fund will determine the
number of shares which the Fund will offer to repurchase each quarter. If more
shares are tendered for repurchase than the Fund has offered to repurchase, the
Board may, but is not obligated, to increase the number of shares to be
repurchased by 2% of the Fund shares outstanding; if there are still more shares
tendered than are offered for repurchase, shares will be repurchased on a
pro-rata basis. Shareholders may withdraw shares tendered for repurchase at any
time prior to the repurchase request deadline.
The commitment to make these quarterly offers to repurchase is a
fundamental policy of the Fund which cannot be changed without the approval of
shareholders. The Fund may suspend or postpone a repurchase offer only: (A) if
making or effecting the repurchase offer would cause the Fund to lose its status
as a regulated investment company under the Internal Revenue Code (SEE
"DISTRIBUTION AND TAXES" IN THE PROSPECTUS); (B) for any period during which the
New York Stock Exchange or any market in which the securities owned by the
Portfolio are principally traded is closed, other than customary weekend and
holiday closings, or during which trading in such market is restricted; (C) for
any period during which an emergency exists as a result of which disposal by the
Portfolio of securities owned by it is not reasonably practicable, or during
which it is not reasonably practicable for the Portfolio or Fund fairly to
determine the value of its net assets; or (D) for such other periods as the
Securities and Exchange Commission may by order permit for the protection of
shareholders of the Fund.
June 23, 1997 PRPS
<PAGE>
EATON VANCE PRIME RATE RESERVES
Supplement to Statement of Additional Information dated May 1, 1997
The following information amends and supplements the investment
restricitons and policies in the section "Investment Restrictions".
On June 23, 1997, the Board of Trustees approved a new fundamental
policy to be effective September 1, 1997, as follows:
The Fund, as a matter of fundamental policy which may not be changed
without a vote of a majority of the outstanding voting securities of the Fund
(as defined in Section 2(a)(42) of the Investment Company Act of 1940) and in
accord with the provisions of Rule 23c-3 (as amended from time to time) under
the Act, shall make repurchase offers for its common shares of beneficial
interest at periodic intervals of three months between repurchase request
deadlines, such deadlines to be dates in the months of February, May, August and
November determined by the Board of Trustees with the repurchase pricing date
and time being not later than the close of business fourteen days after the
repurchase request deadline (or the next business day if the 14th day is not a
business day).
In addition, on June 23, 1997 the Board of Trustees of Senior Debt
Portfolio approved a new fundamental policy to be effective September 1, 1997,
as follows:
The Portfolio, as a matter of fundamental policy which may not be
changed without a vote of a majority of the outstanding voting securities of the
Portfolio (as defined in Section 2(a)(42) of the Investment Company Act of 1940)
and in accord with the provisions of Rule 23c-3 (as amended from time to time)
under the Act, shall make repurchase offers for its interests at periodic
intervals of three months to each holder of its interests between repurchase
request deadlines, such deadlines to be dates determined by the Board of
Trustees in the months when each such holder conducts its periodic repurchases
with the repurchase pricing date and time being not later than the close of
business fourteen days after the repurchase request deadline (or the next
business day if the 14th day is not a business day).
June 23, 1997 PRSAIS
