HYPERION TOTAL RETURN FUND INC, NSAR-B/A, 2000-02-02

HYPERION TOTAL RETURN FUND INC
NSAR-B/A, 2000-02-02

Previous: COMMUNITY FINANCIAL CORP /DE/, 8-K, 2000-02-02

Next: HYPERION TOTAL RETURN FUND INC, N-30D, 2000-02-02

FORM N-SAR
SEMI-ANNUAL REPORT
FOR REGISTERED INVESTMENT COMPANIES

Registrant Name THE HYPERION TOTAL RETURN FUND, INC.

File Number 811-5820

Registrant CIK Number: 0000851169

Press F1 for general help.

Header Screen

Report as of the end of semiannual period: / / (a)
or fiscal year: 11/30/99 (b)
Is this a transition report? (Y or N): N
Is this form being completed by the registrant? (Y or N): Y
Is this an amendment to a previous filing? (Y or N): N
Is this a change to a previous filing? (Y or N): N

1.A) Registrant Name: THE HYPERION TOTAL RETURN FUND, INC.
B) File Number: 811-5820
C) Telephone Number: 2125498400
2.A) Street: ONE LIBERTY PLAZA, 165 BROADWAY, 36TH FL
B) City: NEW YORK C) State: NY D) Zip Code: 10006 Zip Ext.: 1404
E) Foreign Country: Foreign Postal Code:

3. Is this the first filing on this form by the Registrant?(Y or N) ----- N
4. Is this the last filing on this form by the Registrant?(Y or N) ------ N
5. Is Registrant a small business investment company (SBIC)?(Y or N) ---- N
6. Is Registrant a unit investment trust (UIT)?(Y or N) ----------------- N

7.A) Is Registrant a series or multiple portfolio company?(Y or N) ----- N
B) How many separate series or portfolios did Registrant have
at the end of the period? ----------------------------------------- 0

SCREEN NUMBER: 1

7.C) List the name of each series or portfolio and give a consecutive number
to each series or portfolio starting with the number 1. USE THIS SAME
NUMERICAL DESIGNATION FOR EACH SERIES OR PORTFOLIO IN THE SERIES IN-
FORMATION BLOCK IN THE TOP RIGHT CORNER OF THE SCREENS SUBMITTED IN
THIS FILING AND IN ALL SUBSEQUENT FILINGS ON THIS FORM. THIS INFOR-
MATION IS REQUIRED EACH TIME THE FORM IS FILED. Is this the
Series last filing
Number Series Name for this series?
(Y or N)
1
2
3
4
5
6
7
8
9
10

Press Ctrl-Left Arrow for previous, Ctrl-Right Arrow for next/more series.
SCREEN NUMBER: 2

This page is being
INVESTMENT ADVISER/SUB-ADVISER filed for series 0.

8.A) Adviser Name (if any): HYPERION CAPITAL MANAGEMENT, INC.
B) Is this an Adviser or Sub-adviser? (A/S): A
C) File Number: 801-34605
D) City: NEW YORK State: NY Zip Code: 10006 Zip Ext.: 1404
Foreign Country: Foreign Postal Code:

8.A) Adviser Name (if any): PACHOLDER ASSOCIATES, INC.
B) Is this an Adviser or Sub-adviser? (A/S): S
C) File Number: 801-20956
D) City: CINCINNATI State: OH Zip Code: 45236 Zip Ext.:
Foreign Country: Foreign Postal Code:

8.A) Adviser Name (if any):
B) Is this an Adviser or Sub-adviser? (A/S):
C) File Number: 801-
D) City: State: Zip Code: Zip Ext.:
Foreign Country: Foreign Postal Code:

Press Ctrl-Left Arrow for previous, Ctrl-Right Arrow for next/more.
SCREEN NUMBER: 3

This page is being
ADMINISTRATOR filed for series 0.

10.A) Administrator Name (if any):HYPERION CAPITAL MANAGEMENT, INC.
B) File Number (if any): 801-34605
C) City: NEW YORK State: NY Zip Code: 10006 Zip Ext.: 1404
Foreign Country: Foreign Postal Code:

10.A) Administrator Name (if any):
B) File Number (if any):
C) City: State: Zip Code: Zip Ext.:
Foreign Country: Foreign Postal Code:

Press Ctrl-Left Arrow for previous, Ctrl-Right Arrow for next/more.
SCREEN NUMBER: 4

This page is being
PRINCIPAL UNDERWRITER filed for series 0.

11.A) Underwriter Name (if any): MERRILL LYNCH, PIERCE, FENNER & SMITH, INC.
B) File Number: 8-7221
C) City: NEW YORK State: NY Zip Code: 10281 Zip Ext.:
Foreign Country: Foreign Postal Code:

11.A) Underwriter Name (if any): PRUDENTIAL SECURITIES, INC.
B) File Number: 8-27154
C) City: NEW YORK State: NY Zip Code: 10292 Zip Ext.:
Foreign Country: Foreign Postal Code:

11.A) Underwriter Name (if any): THOMSON, MCKINNON SECURITIES, INC.
B) File Number: 8-14450
C) City: NEW YORK State: NY Zip Code: 10005 Zip Ext.:
Foreign Country: Foreign Postal Code:

11.A) Underwriter Name (if any): PIPER JAFFRAY INC.
B) File Number: 8-15204
C) City: MINNEAPOLIS State: MN Zip Code: 55440 Zip Ext.:
Foreign Country: Foreign Postal Code:

Press Ctrl-Left Arrow for previous, Ctrl-Right Arrow for next/more.
SCREEN NUMBER: 5

This page is being
PRINCIPAL UNDERWRITER filed for series 0.

11.A) Underwriter Name (if any):
B) File Number: 8-
C) City: State: Zip Code: Zip Ext.:
Foreign Country: Foreign Postal Code:

Press Ctrl-Left Arrow for previous, Ctrl-Right Arrow for next/more.
SCREEN NUMBER: 5

This page is being
SHAREHOLDER SERVICING AGENT filed for series 0.

12.A) Agent Name (if any): BOSTON EQUISERVE LP
B) File Number (if any): 85-00
C) City: CANTON State: MA Zip Code: 02021 Zip Ext.:

12.A) Agent Name (if any):
B) File Number (if any):
C) City: State: Zip Code: Zip Ext.:

Press Ctrl-Left Arrow for previous, Ctrl-Right Arrow for next/more.
SCREEN NUMBER: 6

This page is being
INDEPENDENT PUBLIC ACCOUNTANT filed for series 0.

13.A) Accountant Name: PRICEWATERHOUSECOOPERS LLP
B) City: NEW YORK State: NY Zip Code: 10036 Zip Ext.:
Foreign Country: Foreign Postal Code:

13.A) Accountant Name:
B) City: State: Zip Code: Zip Ext.:
Foreign Country: Foreign Postal Code:

Press Ctrl-Left Arrow for previous, Ctrl-Right Arrow for next/more.
SCREEN NUMBER: 7

This page is being
AFFILIATED BROKER/DEALER filed for series 0.

14.A) Broker/Dealer Name (if any):RANIERI & CO., INC.
B) File Number: 8-39678

14.A) Broker/Dealer Name (if any):
B) File Number: 8-

Press Ctrl-Left Arrow for previous, Ctrl-Right Arrow for next/more.
SCREEN NUMBER: 8

This page is being
CUSTODIAN/SUB-CUSTODIAN filed for series 0.

15.A) Custodian/Sub-custodian: STATE STREET BANK & TRUST COMPANY
B) Is this a Custodian or Sub-custodian? (C/S): C
C) City: BOSTON State: MA Zip Code: 02116 Zip Ext.:
D) Foreign Country: Foreign Postal Code:

E) Mark ONE of the following with an 'X':

TYPE OF CUSTODY

Member Nat'l Foreign Insurance Co.
Bank Sec. Exchg. Self Custodian Sponsor
Sec.17(f)(1) Rule 17f-1 Rule 17f-2 Rule 17f-5 Rule 26a-2 Other
------------ ------------ ---------- ---------- ------------- -----

Press Ctrl-Left Arrow for previous, Ctrl-Right Arrow for next/more.
SCREEN NUMBER: 9

This page being
filed for series 0.

18. Does Registrant's/Series' custodian(s) maintain some
or all of Registrant's/Series' securities in a central
depository or book-entry system pursuant to Rule 17f-4? (Y or N) Y

19. Family of investment companies information:

A) Is Registrant part of a family of investment companies? (Y or N) Y

B) If 'Y' (Yes), state the number of registered management
investment companies in the family: 9
(NOTE: Count as a separate company each series of a series company
and each portfolio of a multiple portfolio company; exclude
all series of unit investment trusts from this number.)

C) Identify the family using 10 letters: HYPERIONXX
(NOTE: In filing this form, use this identification consistently for
all investment companies in the family including any unit
investment trusts. This designation is for purposes of
this form only.)

SCREEN NUMBER: 10

20. Brokerage commissions paid on portfolio transactions of Registrant:

List the 10 brokers which received the largest amount of brokerage commissions
(excluding dealer concessions in underwritings) by virtue of direct or in-
direct participation in Registrant's portfolio transactions, set forth in
order of size of gross commissions during the current reporting period:
(FOR SERIES COMPANIES, ITEMS 20 & 21 MUST BE ANSWERED IN TOTAL FOR ALL SERIES)
Commissions
Name of Broker IRS Number Received
(000's omitted)
WAINWRIGHT, H.C. & CO., INC. 04-3104484 10
WEISS, PECK & GREER, LLC 13-2649199 7
PAINEWEBBER, INC. 13-2638166 5
0
0
0
0
0
0
0

21. Aggregate brokerage commissions paid by Registrant
during current reporting period (000's omitted): 22

SCREEN NUMBER: 11

22. Registrant's portfolio transactions with entities acting as principals:

List the 10 entities acting as principals with whom Registrant did the largest
amount of portfolio transactions (include all short-term obligations, and U.S.
Gov't. & tax-free securities) in both the secondary market & in underwritten
offerings set forth in order of size based upon total value of principal
transactions during the current reporting period: (FOR SERIES COMPANIES, ITEMS
22 AND 23 MUST BE ANSWERED IN TOTAL FOR ALL SERIES) Registrant Sales by
Name of Entity IRS Number Purchases Registrant
(000's omitted)
MORGAN STANLEY AND CO., INC. 13-2655998 475729 5420
STATE STREET BANK & TRUST COMPANY 04-1867445 358201 0
PAINEWEBBER INC. 13-2638166 101746 89657
MERRILL LYNCH, PIERCE, FENNER & SMITH, INC. 13-5674085 89139 33342
BEAR STEARNS & CO. 13-3299429 37209 32803
DONALDSON LUFKIN & JENRETTE SECURITIES CORP. 13-2741729 23418 37489
LEHMAN BROTHERS, INC. 13-2518466 37227 5806
GOLDMAN SACHS & CO. 13-5108880 250 26509
SALOMON SMITH BARNEY INC. 11-2418191 8080 1242
GREENWICH CAPITAL MARKETS, INC. 13-3172275 4967 0

23. Aggregate principal purchase/sale transactions of Registrant during current
reporting period. C. Total Purchases: 1158883 D. Total Sales: 244742
(000's omitted)
SCREEN NUMBER: 12

This page being
filed for series 0.

24. At the end of the current period, did the Registrant/Series hold any
securities of the Registrant's/Series' regular brokers or dealers or
of the parents of such brokers or dealers that derive more than 15%
of gross revenue from securities-related activities? (Y or N): N

NOTE: If answer is 'N' (No), please go on to screen 15.

SCREEN NUMBER: 13

This page being
filed for series 0.

25. List below the information requested about Registrant's/Series' holdings of
the securities of the Registrant's/Series' regular brokers or dealers or of
their parents that derive more than 15% of gross revenues from securities-
related activities:
Type of Value of any
Name of Regular Broker or IRS Security Securities
Dealer or Parent (Issuer) Number Owned Owned at end
D=debt of current
E=equity period
(000's omitted)
0
0
0
0
0
0
0
0

Press Ctrl-Left Arrow for previous, Ctrl-Right Arrow for next/more.
SCREEN NUMBER: 14

26. Considerations which affected the participation of brokers or dealers
or other entities in commissions or other compensation paid on
portfolio transactions of Registrant:

[ FOR SERIES COMPANIES THIS ITEM IS TO BE ANSWERED IN TOTAL FOR ALL SERIES ]

Answer each of the following with 'Y' or 'N'.

A) Sales of Registrant's/Series' shares -------------------------------- N
B) Receipt of investment research and statistical information ---------- Y
C) Receipt of quotations for portfolio valuations ---------------------- Y
D) Ability to execute portfolio transactions
to obtain best price and execution --------------------------------- Y
E) Receipt of telephone line and wire services ------------------------- Y
F) Broker or dealer which is an affiliated person ---------------------- N
G) Arrangement to return or credit part or all of
commissions or profits thereon:
(i) To investment adviser, principal underwriter,
or an affiliated person of either ---------------------------- N
(ii) To Registrant ------------------------------------------------ N
H) Other --------------------------------------------------------------- N

SCREEN NUMBER: 15

SALES AND REPURCHASES

27. Is Registrant an open-end investment company? (Y or N): N

NOTE: If answer is 'N' (No), please delete any answers you may
have entered for questions 28 through 44.

If you have done this already or not yet responded to
question 28 through 44, please jump to Screen Number 23.

SCREEN NUMBER: 16

This page being
28. Monthly Sales and Repurchases of filed for series 0.
Registrant's/Series' Shares:

Total NAV Total NAV Total NAV
of Shares of Shares Total NAV of Shares
Sold: New Sold: Reinv. of Shares Redeemed and
Month of Sales (Incl. of Dividends Sold: Repurchased
Current Period Exchanges) & Distributions Other (Incl. Exchanges)
(000's omitted) (000's omitted)

A) First month of period $ 0 $ 0 $ 0 $ 0
B) Second month of period $ 0 $ 0 $ 0 $ 0
C) Third month of period $ 0 $ 0 $ 0 $ 0
D) Fourth month of period $ 0 $ 0 $ 0 $ 0
E) Fifth month of period $ 0 $ 0 $ 0 $ 0
F) Sixth month of period $ 0 $ 0 $ 0 $ 0
G) Total $ 0 $ 0 $ 0 $ 0

H) Total NAV of Registrant's/Series' share sales during the
period subject to a sales load (000's omitted) $ 0
(Note: 28H is the total of six months and must be
less than or equal to 28G1 + 28G2 + 28G3)

SCREEN NUMBER: 17

This page being
filed for series 0.

29. Was a front-end sales load deducted from any share sales
during the reporting period? (Y or N) -------------------------

NOTE: If answer is 'N' (No), please jump to Screen Number 20.

30.A) Total front-end sales loads collected from sales
(including exchanges) by principal underwriter
or by any underwriter which is an affiliated
person of the principal underwriter, of
Registrant's/Series' shares during the
current period (000's omitted) ------------------------------ $ 0

B) What is the maximum sales load rate in effect at the end of
the period as a percentage of the offering price? ----------- 0.00%

C) What is the minimum sales load rate in effect at the end of
the period as a percentage of the offering price? ----------- 0.00%

SCREEN NUMBER: 18

This page being
filed for series 0.

31.A) Net amount retained by Registrant's/Series' principal underwriter
or by any underwriter or dealer which is an affiliated person of the
principal underwriter thereof from front-end sales loads collected
from sales of Registrant's/Series' shares during the current period
($000's omitted). ------------------------------------ $ 0
31.B) Amount by which payout by Registrant's/Series' principal underwriter or
by any underwriter which is an affiliated person of the principal under-
writer thereof to persons or entities selling Registrant's/Series' shares
exceeded that reported in Item 30 ($000's omitted). -- $ 0

32. Amount Registrant's/Series' principal underwriter and any underwriters
or dealers which are affiliated persons of the principal underwriter paid
to dealers which are not affiliated persons of the principal underwriter
for selling Registrant's/Series' shares that were sold with a front-end
sales load during current period ($000's omitted). --- $ 0

33. Amount paid to a captive retail sales force of Registrant's/Series'
principal underwriter or of any underwriter or dealer which is an af-
filiated person of the principal underwriter for selling Registrant's
shares that were sold with a front-end sales load during current period
($000's omitted). ------------------------------------ $ 0
SCREEN NUMBER: 19

This page being
filed for series 0.

34. Did Registrant/Series impose a deferred or contingent
deferred sales load during the reporting period? (Y or N) ------

NOTE: If answer is 'N' (No), skip the remaining questions on this screen
and proceed to Screen Number 21.

35. Total deferred or contingent deferred sales loads collected
during current period from redemptions and repurchases of
Registrant's/Series' shares ($000's omitted) ------------------ $ 0

36.A) Did Registrant/Series retain all monies collected from the
deferred or contingent deferred sales loads during the
reporting period? (Y or N) -----------------------------------

B) If the answer to sub-item 36A is 'N' (No), state the net
amount Registrant/Series retained from deferred or
contingent deferred sales loads ($000's omitted) ------------ $ 0

SCREEN NUMBER: 20

This page being
filed for series 0.

37. Did Registrant/Series impose a redemption fee other than a deferred
or contingent sales load during the reporting period? (Y or N) ---
NOTE: If answer is 'N' (No), go to item 39.

38. Total amount of redemption fees other than deferred or contingent
deferred sales loads collected from redemptions and repurchases of
Registrant's/Series' shares during the current period.
($000's omitted) ------------------------------------------------- $ 0

39. Were any account maintenance fees or other administrative fees imposed
directly on shareholders during the current period? (Y or N) -----

40. During the period, did the Registrant/Series have a plan of
distribution adopted pursuant to rule 12b-1? (Y or N) ------------
NOTE: If answer is 'N' (No), jump to Screen 23 for your next screen.

41. During the period, did Registrant/Series use its assets directly
to make payments under the 12b-1 plan? (Y or N) ------------------
NOTE: If answer is 'N' (No), go to next screen (Screen 22)
and begin answering at question 44.

SCREEN NUMBER: 21

This page being
42. For the current period, indicate the filed for series 0.
percentage of total dollars paid directly
by Registrant/Series under the 12b-1 plan for each of the following:
(Round to the nearest whole percent)
A) Advertising ------------------------------------------------- 0%
B) Printing and mailing of prospectuses to other than
current shareholders ---------------------------------------- 0%
C) Payments to underwriters ------------------------------------ 0%
D) Payments to brokers or dealers ------------------------------ 0%
E) Direct payments to sales personnel -------------------------- 0%
F) Payments to banks and savings and loans --------------------- 0%
G) Other uses, incl. payments to investment adviser
separate from the advisory fee ------------------------------ 0%
H) Unallocated payments made for a combination of such services 0%

43. Total amount paid directly by Registrant/Series pursuant
to its 12b-1 plan ($000's omitted) ---------------------------- $ 0

44. If an investment adviser or other affiliated person of Registrant/Series
made unreimbursed payments pursuant to Registrant's/Series' 12b-1 plan,
state the total amount of such payments. ($000's omitted) ----- $ 0

SCREEN NUMBER: 22

Contracts This page being
filed for series 0.
45. Did Registrant/Series have an advisory contract during the period?
(If 'N' (No), jump to screen 26 for your next screen.) --------------- Y
46. Did Registrant/Series pay more than one investment adviser directly
for investment advice during the period? (If 'Y' (Yes), answer items
47-52 in the aggregate for all such investment advisers.) ------------ N
47. Was Registrant's/Series' advisory fee based solely on a percentage of
its assets? (Y or N) ------------------------------------------------- Y
48. If answer to 47 is 'Y' (Yes), fill in the table or the single fee rate
applied to Registrant's/Series' assets based on the advisory contract.
SINGLE FEE RATE ------- 0.650%
STEP: ASSET VALUE ($000's omitted) ANNUAL FEE RATE
A) first - $ 0 0.000%
B) of next - $ 0 0.000%
C) of next - $ 0 0.000%
D) of next - $ 0 0.000%
E) of next - $ 0 0.000%
F) of next - $ 0 0.000%
G) of next - $ 0 0.000%
H) of next - $ 0 0.000%
I) of next - $ 0 0.000%
J) of next - $ 0 0.000%
K) over - $ 0 0.000%
SCREEN NUMBER: 23

This page being
ADVISORY FEE filed for series 0.

(Y or N)
49. Was Registrant's/Series' advisory fee during the period based
solely on a percentage of its income? -------------------------- N

50. Was Registrant's/Series' advisory fee during the period based
on some combined percentage of its income & assets? ------------ N

51. Was Registrant's/Series' advisory fee during the period based
in whole or in part on its investment performance? ------------- N

52. Was Registrant's/Series' advisory fee during the period based
in whole or in part upon the assets, income or performance of
other registrants? --------------------------------------------- N

53.A) Were the expenses of the Registrant/Series limited or re-
duced at any time during the period by some agreement or
understanding other than by blue sky laws? ------------------- N
[ If 53A is 'Y' (Yes), was limitation that applied during
current period based upon: ]
B) Assets? C) Income? (Y or N)

SCREEN NUMBER: 24

This page being
filed for series 0.

54. Indicate below whether services were supplied or paid for wholly or in
substantial part by investment adviser(s) or administrator(s) in
connection with the advisory or administrative contract(s) but for which
the adviser(s) or administrator(s) are not reimbursed by the Registrant:
(Y or N)
A) Occupancy and office rental ------------------------------------------ Y
B) Clerical and bookkeeping services ------------------------------------ Y
C) Accounting services -------------------------------------------------- Y
D) Services of independent auditors ------------------------------------- N
E) Services of outside counsel ------------------------------------------ N
F) Registration and filing fees ----------------------------------------- N
G) Stationery, supplies and printing ------------------------------------ N
H) Salaries & compensation of Registrant's interested directors --------- Y
I) Salaries & compensation of Registrant's disinterested directors ------ N
J) Salaries & compensation of Registrant's officers who are not directors Y
K) Reports to current shareholders -------------------------------------- N
L) Determination of offering and redemption prices ---------------------- N
M) Trading department --------------------------------------------------- Y
N) Prospectus preparation and printing for current shareholders --------- N
O) Other ---------------------------------------------------------------- N

SCREEN NUMBER: 25

This page being
filed for series 0.
MISCELLANEOUS INFORMATION

55. Did Registrant/Series have any of the following
outstanding at any time during the current period (Y or N)
which exceeded 1% of aggregate net assets?

A) Overdrafts -------------------------------------------------- N
B) Bank Loans -------------------------------------------------- N

56. During the period did the Registrant's/Series' investment adviser(s)
have advisory clients other than investment companies? --------- Y

57. Did the Registrant/Series adjust the number of its shares
outstanding by means of a stock split or stock dividend? ------- N

SCREEN NUMBER: 26

This page being
CLASSIFICATION filed for series 0.
(Y or N)
58.A) Is Registrant/Series a separate account of an insurance company? N
If answer is 'Y' (Yes), are any of the following types
of contracts funded by the Registrant:
B) Variable annuity contracts? ---------------------------------
C) Scheduled premium variable life contracts? ------------------
D) Flexible premium variable life contracts? -------------------
E) Other types of insurance products registered under
the Securities Act of 1933? ---------------------------------

59. Is Registrant/Series a management investment company? ------------ Y

60.A) Was Registrant/Series a diversified investment company at any
time during the reporting period? ------------------------------ Y
B) Is Registrant/Series a diversified investment company as of the
end of the reporting period? ----------------------------------- Y

61. What is the lowest minimum initial investment required by
Registrant/Series from an investor that is not an employee or
otherwise affiliated with the Registrant/Series, its adviser,
principal underwriter or other affiliated entity? $ 0

SCREEN NUMBER: 27

62.A) Does the Registrant/Series invest primarily in This page being
debt securities, including convertible debt filed for series 0.
securities, options & futures on debt
securities or indices of debt securities? (Y or N) ----------- Y
NOTE: If answer is 'N' (No), jump to Screen Number 30.
If answer is 'Y' (Yes), state the percentage of net assets
in each type at the end of the current period:

SHORT-TERM MATURITIES

B) U.S. Treasury 0.0% C) U.S. Government Agency 0.0%
D) Repurchase agreements 1.5% F) Bank Certificates of
E) State and Municipal tax-free 0.0% deposit-Domestic 0.0%
G) Bank Certificates of deposit-Foreign 0.0% H) Bankers acceptances 0.0%
I) Commercial paper taxable 0.0% J) Time deposits 0.0%
K) Options 0.0% L) All other 0.0%

INTERMEDIATE & LONG-TERM MATURITIES

M) U.S. Treasury 2.6% N) U.S. Government Agency 47.7%
O) State and Municipal tax-free 0.0% P) Corporate 7.2%
Q) All other 86.9%

R) Investments other than debt securities 2.5%
SCREEN NUMBER: 28

This page being
filed for series 0.

63. State the dollar weighted average portfolio maturity at the end of the
period covered by this report in days or, if longer than 1 yr.,
in years to one decimal place: A: 0 days
B: 6.8 years

64.A) Is the timely payment of principal and interest on any of the
instruments listed in item 62 insured or guaranteed by an entity
other than the issuer? (Y or N) ----------------------------------- Y

B) Is the issuer of any instrument covered in item 62 delinquent or
in default as to payment of principal or interest at the end of
the current period? (Y or N) -------------------------------------- Y
[If answer is 'N' (No), jump to screen 30 for your next screen.]

65. In computations of NAV per share, is any part of the value
attributed to instruments identified in sub-item 64B derived
from insurance or guarantees? (Y or N) ------------------------------ N

SCREEN NUMBER: 29

66.A) Is the Registrant/Series a fund that This page being
usually invests in equity securities, filed for series 0.
options & futures on equity securities,
indices of equity securities or securities
convertible into equity securities? ----------------------------- N
If answer is 'N', go to item 67. Otherwise place a 'Y' on the line below which
best describes its primary investment objective (place an 'N' on other lines).

B) Aggressive capital appreciation ---------------------------
C) Capital appreciation --------------------------------------
D) Growth ----------------------------------------------------
E) Growth and income -----------------------------------------
F) Income ----------------------------------------------------
G) Total return ----------------------------------------------

67. Is the Registrant/Series a balanced fund? (Y or N) ---------------- N
68. Does the Registrant/Series have more than 50% of its net assets
at the end of the current period invested in:
A) The securities of issuers engaged primarily in the pro-
duction or distribution of precious metals? (Y or N) ------ N
B) The securities of issuers located primarily in countries
other than the United States? (Y or N) -------------------- N
69. Is the Registrant/Series an index fund? (Y or N) ------------------ N

SCREEN NUMBER: 30

This page being
INVESTMENT PRACTICES filed for series 0.
70. Activity Permitted by invest- Engaged in
ment policies? this period?
(Y or N) (Y or N)
A) Writing or investing in repurchase agreements Y Y
B) Writing or investing in options on equities N N
C) Writing or investing in options on debt securities Y N
D) Writing or investing in options on stock indices N N
E) Writing or investing in interest rate futures Y Y
F) Writing or investing in stock index futures N N
G) Writing or investing in options on futures Y N
H) Writing or investing in options on stock index futures N N
I) Writing or investing in other commodity futures N N
J) Investments in restricted securities Y Y
K) Investments in shares of other investment companies N N
L) Investments in securities of foreign issuers Y N
M) Currency exchange transactions N N
N) Loaning portfolio securities Y N
O) Borrowing of money Y Y
P) Purchases/sales by certain exempted affiliated persons Y N
Q) Margin purchases N N
R) Short selling Y N

SCREEN NUMBER: 31

This page being
71. Portfolio turnover rate for the current filed for series 0.
reporting period

A) Purchases ($000's omitted) ---------------------------------- $ 246180
B) Sales [including all maturities] ($000's omitted) ----------- $ 232918
C) Monthly average value of portfolio ($000's omitted) --------- $ 322940
D) Percent turnover (use lesser of 71A) or 71B) divided by 71C)) 72%
NOTE: Item 71D) should be a whole number; round if necessary.

FINANCIAL INFORMATION

72.A) How many months do the answers to 72 and 73 cover? ----------- 12 months
INCOME (000's omitted)
B) Net interest income ----------------------------------------- $ 25729
C) Net dividend income ----------------------------------------- $ 234
D) Account maintenance fees ------------------------------------ $ 0
E) Net other income -------------------------------------------- $ 0
EXPENSES
F) Advisory fees ----------------------------------------------- $ 1456
G) Administrator(s) fees --------------------------------------- $ 448
(Negative answers are allowed)
H) Salaries and other compensation ----------------------------- $ 0

SCREEN NUMBER: 32

This page being
FINANCIAL INFORMATION (Cont. from Screen 32) filed for series 0.

EXPENSES (Negative answers are allowed) For the period covered by this form
($000's omitted)
72.I) Shareholder servicing agent fees ------------------- $ 62
J) Custodian fees ------------------------------------- $ 81
K) Postage -------------------------------------------- $ 0
L) Printing expenses ---------------------------------- $ 35
M) Directors' fees ------------------------------------ $ 66
N) Registration fees ---------------------------------- $ 32
O) Taxes ---------------------------------------------- $ 0
P) Interest ------------------------------------------- $ 5177
Q) Bookkeeping fees paid to anyone
performing this service ---------------------------- $ 0
R) Auditing fees -------------------------------------- $ 54
S) Legal fees ----------------------------------------- $ 15
T) Marketing/distribution payments including
payments pursuant to a rule 12b-1 plan ------------- $ 0
U) Amortization of organization expenses -------------- $ 0
V) Shareholder meeting expenses ----------------------- $ 0
W) Other expenses ------------------------------------- $ 175
X) Total expenses ------------------------------------- $ 7601

SCREEN NUMBER: 33

This page being
FINANCIAL INFORMATION (Cont. from Screen 33) filed for series 0.

EXPENSES (Negative answers are allowed For the period covered by this form
on this screen for 72Z only) ($000's omitted)
72.Y) Expense reimbursements ----------------------------- $ 0
Z) Net investment income ------------------------------ $ 18362
AA) Realized capital gains ----------------------------- $ 0
BB) Realized capital losses ---------------------------- $ 5489
CC) 1. Net unrealized appreciation during the period --- $ 0
2. Net unrealized depreciation during the period --- $ 15578
DD) 1. Total income dividend~ for which record date
passed during the period ------------------------ $ 17038
2. Dividends for a second class of open-end
company shares -----------------------------------$ 0
EE) Total capital gains distributions for which
record date passed during the period --------------- $ 0
73. Distributions per share for which record date passed during the period:
NOTE: Show in fractions of a cent if so declared.
A) 1. Dividends from net investment income ------------ $ 0.7375
2. Dividends for a second class of open-end
company shares ---------------------------------- $ 0.0000
B) Distribution of capital gains ---------------------- $ 0.0000
C) Other distributions -------------------------------- $ 0.0000
SCREEN NUMBER: 34

This page being
filed for series 0.
As of the end of current reporting
74. Condensed balance sheet data: period (000's omitted except
for per share amounts)
A) Cash ----------------------------------------------- $ 189
B) Repurchase agreements ------------------------------ $ 3235
C) Short-term debt securities other than
repurchase agreements ------------------------------ $ 0
D) Long-term debt securities including
convertible debt------------------------------------ $ 307065
E) Preferred, convertible preferred, and
adjustable rate preferred stock -------------------- $ 5394
F) Common stock --------------------------------------- $ 0
G) Options on equities -------------------------------- $ 0
H) Options on all futures ----------------------------- $ 0
I) Other investments ---------------------------------- $ 0
J) Receivables from portfolio instruments sold -------- $ 0
K) Receivables from affiliated persons ---------------- $ 0
L) Other receivables ---------------------------------- $ 3273
M) All other assets ----------------------------------- $ 145
N) Total assets --------------------------------------- $ 319301

SCREEN NUMBER: 35

This page being
(Continued from Screen 35) filed for series 0.
Condensed balance sheet data: As of the end of current reporting
period (000's omitted except for per
share amounts and number of accounts)
74.O) Payables for portfolio instruments purchased ----------------- $ 12778
P) Amounts owed to affiliated persons --------------------------- $ 0
Q) Senior long-term debt ---------------------------------------- $ 0
R) Other liabilities: 1. Reverse repurchase agreements --------- $ 93498
2. Short sales --------------------------- $ 0
3. Written options ----------------------- $ 0
4. All other liabilities ----------------- $ 322
S) Senior equity ------------------------------------------------ $ 0
T) Net assets of common shareholders ---------------------------- $ 212703
U) 1. Number of shares outstanding ------------------------------ 22951
2. Number of shares outstanding of a second class of shares
of open-end company --------------------------------------- 0
V) 1. Net asset value per share (to nearest cent) --------------- $ 9.27
2. Net asset value per share of a second class of open-end
company shares (to nearest cent) -------------------------- $ 0.00
W) Mark-to-market net asset value per share
for money market funds only (to 4 decimals) ------------------ $ 0.0000
X) Total number of shareholder accounts ------------------------- 17008
Y) Total value of assets in segregated accounts ----------------- $ 97537
SCREEN NUMBER: 36

This page being
filed for series 0.

75. Average net assets during the current reporting period
($000's omitted). Answer only one:

A) Daily average (for money market funds) ----------------------- $ 0

B) Monthly average (for all other funds) ----------------------- $ 224046

76. Market price per share at end of period (closed-end funds only) $ 7.38

SCREEN NUMBER: 37

77.A) Is the Registrant filing any of the following attachments
with the current filing of Form N-SAR? (ANSWER FOR ALL
SERIES AS A GROUP) (Y or N) ------------------------------- Y
NOTE: If answer is 'Y' (Yes), mark those items
below being filed as an attachment to this Filed as
form or incorporated by reference. Attachment
B) Accountant's report on internal control ------------------- Y
C) Matters submitted to a vote of security holders -----------
D) Policies with respect to security investment --------------
E) Legal proceedings -----------------------------------------
F) Changes in security for debt ------------------------------
G) Defaults and arrears on senior securities -----------------
H) Changes in control of Registrant --------------------------
I) Terms of new or amended securities ------------------------
J) Revaluation of assets or restatement of
capital share account -------------------------------------
K) Changes in Registrant's certifying account ----------------
L) Changes in accounting principles and practices ------------
M) Mergers ---------------------------------------------------
N) Actions required to be reported pursuant to Rule 2a-7 -----
O) Transactions effected pursuant to Rule 10f-3 --------------
P) Information required to be filed pursuant
to exemptive orders ---------------------------------------
(Item 77 continued on next screen)
SCREEN NUMBER: 38

77. (Continued) Mark those items below being filed as
an attachment to this form or incorporated form Filed as
or incorporated by reference. Attachment

Q1) Exhibits -------------------------------------------------- Y
Q2) Any information called for by instructions to
sub-item 77Q2 ---------------------------------------------
Q3) Any information called for by instructions to
sub-item 77Q3 ---------------------------------------------

78. Does the Registrant have any wholly-owned investment company
subsidiaries whose operating & financial data are consolidated
with that of Registrant in this report? (Y or N) N

NOTE: If answer is 'N' (No), jump to Screen 41.

SCREEN NUMBER: 39

79. List the '811' numbers and names of Registrant's wholly owned
investment company subsidiaries consolidated in this report.

811 Number Subsidiary Name

811-
811-
811-
811-
811-
811-
811-
811-
811-
811-

Press Ctrl-Left Arrow for previous, Ctrl-Right Arrow for next/more.
SCREEN NUMBER: 40

ANNUAL SUPPLEMENT This page being
filed for series 0.

Screens 41 & 42 are to be filed only once each
year, at the end of Registrant's/Series' fiscal year.

80. Fidelity bond(s) in effect at the end of the period:
A) Insurer name: RELIANCE INSURANCE COMPANY
B) Second insurer:
C) Aggregate face amount of coverage for Registrant/Series on
all bonds on which it is named as an insured (000's omitted): $ 4000

81. A) Is the bond part of a joint fidelity bond(s) shared
with other investment companies, or other entities? (Y or N) - Y
B) If answer to 81A is 'Y' (Yes), how many other
investment companies, or other entities are covered by the bond?
(Count each series as a separate investment company.) -------- 3

82. A) Does the mandatory coverage of the fidelity bond
have a deductible? (Y or N) ---------------------------------- Y
B) If the answer to 82A is 'Y' (Yes), what is the
amount of the deductible? ($000's omitted) ------------------ $ 25

SCREEN NUMBER: 41

ANNUAL SUPPLEMENT (Continued) This page being
filed for series 0.

83.A) Were any claims with respect to this Registrant/
Series filed under the bond during the period? (Y or N) -------- N
B) If the answer to 83 A) is 'Y' (Yes), what was the
total amount of such claims? ($000's omitted) ----------------- $ 0

84.A) Were any losses incurred with respect to this
Registrant/Series that could have been filed as a
claim under the fidelity bond but were not? (Y or N) ----------- N
B) If the answer to 84 A) is 'Y' (Yes), what was the
total amount of such losses? ($000's omitted) ----------------- $ 0

85.A) Are Registrant's/Series' officers and directors
covered as officers and directors of Registrant/Series
under any errors and omissions insurance policy
owned by the Registrant/Series or anyone else (Y or N) --------- Y
B) Were any claims filed under such policy during the
period with respect to the Registrant/Series? (Y or N) --------- N

SCREEN NUMBER: 42

Closed-End Investment Companies Only

86. Sales, repurchases, and redemptions of
Registrant's securities:
Number of Shares Net
or Principal Consideration
Amount of Debt Received or Paid
($000's omitted) ($000's omitted)
Common Stock:

A) Sales 0 $ 0
B) Repurchases 733 $ 6357

Preferred Stock:

C) Sales 0 $ 0
D) Repurchases and Redemptions 0 $ 0

Debt Securities

E) Sales $ 0 $ 0
F) Repurchases and Redemptions $ 0 $ 0

SCREEN NUMBER: 43

Closed-End Investment Companies Only

87. Securities of Registrant registered on a
national securities exchange or listed
on NASDAQ:
CUSIP or Ticker
Title of each class of securities NASDAQ No. Symbol

A) COMMON STOCK 449145101 HTR
B)
C)

88. Did Registrant have any of the following outstanding which exceeded 1%
of aggregate net assets at any time during the period?

(Y or N)

A) Notes or bonds ------------------------------ N
B) Uncovered options --------------------------- N
C) Margin loans -------------------------------- N
D) Preferred stock ----------------------------- N

SCREEN NUMBER: 44

WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6
<CIK> 0000851169
<NAME> HYPERION TOTAL RETURN FUND, INC.
<SERIES>
<NUMBER> 0
<NAME> HYPERION TOTAL RETURN FUND, INC.
<MULTIPLIER> 1000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1999
<PERIOD-START> DEC-01-1998
<PERIOD-END> NOV-30-1999
<INVESTMENTS-AT-COST> 335250
<INVESTMENTS-AT-VALUE> 315694
<RECEIVABLES> 3273
<ASSETS-OTHER> 334
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 319301
<PAYABLE-FOR-SECURITIES> 12778
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 93820
<TOTAL-LIABILITIES> 106598
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 260187
<SHARES-COMMON-STOCK> 22950
<SHARES-COMMON-PRIOR> 23683
<ACCUMULATED-NII-CURRENT> 1651
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (29635)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (19500)
<NET-ASSETS> 212703
<DIVIDEND-INCOME> 234
<INTEREST-INCOME> 25729
<OTHER-INCOME> 0
<EXPENSES-NET> 7601
<NET-INVESTMENT-INCOME> 18362
<REALIZED-GAINS-CURRENT> (5489)
<APPREC-INCREASE-CURRENT> (15578)
<NET-CHANGE-FROM-OPS> (2705)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (17038)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 733
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (26100)
<ACCUMULATED-NII-PRIOR> 327
<ACCUMULATED-GAINS-PRIOR> (24147)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1456
<INTEREST-EXPENSE> 5177
<GROSS-EXPENSE> 7601
<AVERAGE-NET-ASSETS> 224046
<PER-SHARE-NAV-BEGIN> 10.08
<PER-SHARE-NII> 0.80
<PER-SHARE-GAIN-APPREC> (0.87)
<PER-SHARE-DIVIDEND> (0.74)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.27
<EXPENSE-RATIO> 1.08
[AVG-DEBT-OUTSTANDING] 102737
[AVG-DEBT-PER-SHARE] 4.45

</TABLE>

THE HYPERION TOTAL RETURN FUND, INC.
One Liberty Plaza o New York, New York 10006-1404

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

January 28, 2000
To the Stockholders:

The Annual Meeting of Stockholders of The Hyperion Total Return Fund,
Inc. (the "Fund") will be held at The Downtown Association, 60 Pine Street
(between William Street and Pearl Street), New York, New York 10005, on
Tuesday, April 18, 2000, at 9:45 a.m., for the following purposes:

1. To elect directors (Proposal 1).

2. To ratify or reject the selection of
PricewaterhouseCoopers LLP as the independent accountants of the Fund
for the fiscal year ending November 30, 2000 (Proposal 2).

3. To transact any other business that may properly come
before the meeting.

The close of business on January 27, 2000 has been fixed as the
record date for the determination of stockholders entitled to notice of and to
vote at the meeting.

By Order of the Board of Directors,

Patricia A. Sloan
Secretary

WE NEED YOUR PROXY VOTE IMMEDIATELY.

YOU MAY THINK YOUR VOTE IS NOT IMPORTANT, BUT IT IS VITAL. THE MEETING OF
STOCKHOLDERS OF THE FUND WILL BE UNABLE TO CONDUCT ANY BUSINESS IF LESS THAN A
MAJORITY OF THE SHARES ELIGIBLE TO VOTE IS REPRESENTED. IN THAT EVENT, THE
FUND, AT STOCKHOLDERS' EXPENSE, WOULD CONTINUE TO SOLICIT VOTES IN AN ATTEMPT
TO ACHIEVE A QUORUM. CLEARLY, YOUR VOTE COULD BE CRITICAL TO ENABLE THE FUND
TO HOLD THE MEETING AS SCHEDULED, SO PLEASE RETURN YOUR PROXY CARD
IMMEDIATELY. YOU AND ALL OTHER STOCKHOLDERS WILL BENEFIT FROM YOUR
COOPERATION.

Instructions for Signing Proxy Cards

The following general rules for signing proxy cards may be of
assistance to you and avoid the time and expense to the Fund 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. Either party may sign, but the name of the party
signing should conform exactly to the name shown in the registration.

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:

<TABLE>
<S> <C>
Registration Valid Signature

Corporate Accounts
(1) ABC Corp. ABC Corp.
(2) ABC Corp. John Doe, Treasurer
(3) ABC Corp.
c/o John Doe, Treasurer John Doe
(4) ABC Corp. Profit Sharing Plan John Doe, Trustee
Trust Accounts
(1) ABC Trust John B. Doe, Trustee
(2) Jane B. Doe, Trustee
u/t/d 12/28/78 Jane B.Doe
Custodial or Estate Accounts
(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr.
UGMA John B. Smith
(2) John B. Smith John B. Smith, Jr., Executor
</TABLE>

THE HYPERION TOTAL RETURN FUND, INC.
One Liberty Plaza o New York, New York 10006-1404

PROXY STATEMENT

This proxy statement is furnished in connection with a solicitation
by the Board of Directors of The Hyperion Total Return Fund, Inc. (the "Fund")
of proxies to be used at the Annual Meeting of Stockholders of the Fund to be
held at The Downtown Association, 60 Pine Street (between William Street and
Pearl Street), New York, New York 10005, at 9:45 a.m. on Tuesday, April 18,
2000 (and at any adjournment or adjournments thereof) for the purposes set
forth in the accompanying Notice of Annual Meeting of Stockholders. This
proxy statement and the accompanying form of proxy are first being mailed to
stockholders on or about January 28, 2000. Stockholders who execute proxies
retain the right to revoke them by written notice to the Secretary of the Fund
at any time before they are voted. Unrevoked proxies will be voted in
accordance with the specifications thereon and, unless specified to the
contrary, will be voted FOR the re-election of the two nominees and for the
election of Mr. John W. English for Class I directors, and FOR the
ratification of the selection of PricewaterhouseCoopers LLP as the independent
accountants of the Fund for the fiscal year ending November 30, 2000. The
close of business on January 27, 2000 has been fixed as the record date for
the determination of stockholders entitled to notice of and to vote at the
meeting. Each stockholder is entitled to one vote for each share held.
Abstentions will be treated as shares that are present and entitled to vote
for purposes of determining the presence of a quorum but as unvoted for
purposes of determining the approval of any matters submitted to stockholders
for a vote. Broker non-votes will not be counted for purposes of determining
the presence of a quorum or determining whether a proposal has been approved.
On the record date there were 22,930,615 shares outstanding.

PROPOSAL 1: ELECTION OF DIRECTORS

The Fund's Articles of Incorporation provide that the Fund's Board of
Directors shall be divided into three classes: Class I, Class II and Class
III. The terms of office of the present directors in each class expire at the
Annual Meeting in the year indicated or thereafter in each case when their
respective successors are elected and qualified: Class I, 2000; Class II,
2001; and Class III, 2002. At each subsequent annual election, Directors
chosen to succeed those whose terms are expiring will be identified as being
of that same class and will be elected for a three-year term. The effect of
these staggered terms is to limit the ability of other entities or persons to
acquire control of the Fund by delaying the replacement of a majority of the
Board of Directors.

The terms of Robert F. Birch, Andrew M. Carter and Kenneth C. Weiss,
the members of Class I currently serving on the Board of Directors, expire at
this year's Annual Meeting. The persons named in the accompanying form of
proxy intend to vote at the Annual Meeting (unless directed not to so vote)
for the re-election of Messrs. Birch and Carter. The persons named in the
accompanying form of proxy also intend to vote (unless directed not to so
vote) for the election of Mr. John W. English to serve as a Class I director
until the 2003 Annual Meeting of Stockholders. Each nominee has indicated that
he will serve if elected, but if any nominee should be unable to serve, the
proxy or proxies will be voted for any other person or persons, as the case
may be, determined by the persons named in the proxy in accordance with their
judgment.

As described above, there are three nominees for election to the
Board of Directors at this time. Proxies cannot be voted for a greater number
of persons than the nominees currently proposed to serve on the Board of
Directors.

The following table provides information concerning each of the eight
members and nominees of the Board of Directors of the Fund:

Shares of Common
Stock
Beneficially
Owned Directly or
Indirectly, on
Name and Office Principal Occupation During Past Five Years, Director November 30,
with the Fund Other Directorships and Age Since 1999(**)

Class I Nominees to serve until 2003 Annual Meeting of Stockholders:
Robert F. Birch
Director, Member of the Chairman and President, New America High Income Fund (1992-Present).
Audit Committee Chairman of the Board and Co-Founder, The China Business Group, Inc.
(1996-Present). Formerly, Director and Strategic Planning Consultant,
Dewe Rogerson, Ltd. (1994-1998); Chairman and Chief Executive Officer,
Memtek Corporation (1990-1991); Associated with Finn Wishengrad Warnke
& Gayton, a Consulting firm specializing in work-outs of financially
distressed companies (1988-1989); President and Chief Executive
Officer, Gardner and Preston Moss, Inc. (1969-1987)
Age 63 December 1998 -

Andrew M. Carter*
Director Chairman and Chief Executive Officer, Hyperion Capital Management, Inc.
(November 1998-Present). Vice Chairman and Director of The China
Business Group (1996-Present). Director, Manchester Capital Management
(1997-Present). Director, BioSignia (1999-Present). Presently officer
of four charitable boards: The New England Conservatory, The Loomis
Chaffee School, The William E. Simon Graduate School of Business
Administration at the University of Rochester, and The Big Brother
Association of Boston. Director of several investment companies advised
by Hyperion Capital Management, Inc. (1998-Present). Formerly President
and Founding Principal, Andrew M. Carter & Company (1994-1995); Director
and Senior Vice President, Jennison Associates Capital Corp.
(1975-1993); Founder, Standard & Poor's/Carter, Doyle (1972-1975); Vice
President, Head of Fixed Income Group, Wellington Management Co.
(1968-1972); and Manager of the Harvard Endowment bond portfolio,
Harvard Treasurer's Office (1964-1968).
Age 59 July 1998 -

John W. English
Director, Member of the Chairman of the Board of HSBC's China Fund, Inc. (1993-Present); First
Audit Committee Asia Financial Services Ltd.'s First Asia Agri-industry Fund
(1999-Present); and State Street Bank's Select Sector SPDR Trust
(1999-Present); Director of A.L.T. Films, Inc. (1999-Present); Trustee
of Northern Trust Company's Institutional Funds (1993-Present); Trustee
of Washington Mutual's WM Group of Funds (1994-Present).
Age 66 September 1999 100

</TABLE>

<TABLE>

Class II Directors to serve until 2001 Annual Meeting of Stockholders:
Rodman L. Drake
Director, Member of the President , Continuation Investments Group Inc. (1997-Present).
Audit Committee Director, Alliance Group Services, Inc. (1998-Present). Director,
Hotelevision, Inc. (1999-Present). Chairman, Metro Cash Card
International (1999-Present). Parsons Brinckerhoff, Inc.
(1995-Present). Trustee of Excelsior Funds (1994-Present). Director
and/or Trustee of several investment companies advised by Hyperion
Capital Management, Inc. (1989-Present). Formerly, Co-Chairman of KMR
Power Corporation (1993-1997); President, Mandrake Group (1993-1997);
Managing Director and Chief Executive Officer of Cresap (1980-1990).
Age 56 July 1989 205

Harry E. Petersen, Jr.
Director, Member of the Director and/or Trustee of several investment companies advised by
Audit Committee Hyperion Capital Management, Inc. or by its affiliates (1992-Present).
Senior Advisor to Cornerstone Equity Advisors, Inc. (1998-Present).
Formerly, Senior Advisor to Potomac Babson Inc. (1995-1998); Director of
Equitable Real Estate Hyperion Mortgage Opportunity Fund, Inc. and
Equitable Real Estate Hyperion High Yield Commercial Mortgage Fund, Inc.
(1995-1997); Director of Lexington Corporate Properties, Inc.
(1993-1997); Consultant to Advisers Capital Management, Inc.
(1992-1995); Consultant on public and private pension funds
(1991-1993); President of Lepercq Realty Advisors (1988-1990). Member
of Advisory Council of Polytechnic University.
Age 74 October 1993 200

Class III Directors to serve until 2002 Annual Meeting of Stockholders:
Lewis S. Ranieri*
Director Chairman and Chief Executive Officer of Ranieri & Co., Inc. (since
1988); in addition, President of LSR Hyperion Corp., a general partner
of the limited partnership that is the general partner of Hyperion
Partners L.P. ("Hyperion Partners") (since 1988). Director and Vice
Chairman of the Board of Hyperion Capital Management, Inc. (since
December 1998); Director and Chairman of the Board of Hyperion Capital
Management, Inc. (1989-November 1998); Chairman of the Board
(1989-December 1998) and/or Director (since 1989) of several investment
companies advised by Hyperion Capital Management, Inc. or by its
affiliates; Formerly, Director of Lend Lease Hyperion Mortgage
Opportunity Fund, Inc. (formerly, Equitable Real Estate Hyperion
Mortgage Opportunity Fund, Inc.) and Lend Lease Hyperion High Yield
Commercial Mortgage Fund, Inc. (formerly, Equitable Real Estate Hyperion
High Yield Commercial Mortgage Fund, Inc.) (1995-1999); Director and
Chairman of Bank United Corp., and Director of Bank United (since 1988);
Director and President of Hyperion Funding 1993 Corp., the general
partner of the limited partnership that is the

general partner of Hyperion 1993 Fund L.P.; and also Chairman and
President of various other direct and indirect subsidiaries of Hyperion
Partners (since 1989). Formerly Vice Chairman of Salomon Brothers Inc.
(until 1987).
Age 53 June 1989 -

Leo M. Walsh, Jr.
Director, Chairman of the Director and/or Trustee of several investment companies advised by
Audit Committee Hyperion Capital Management, Inc. or by its affiliates (1989-Present).
Financial Consultant for Merck-Medco Managed Care LLC (formerly Medco
Containment Services Inc.) (1994-Present). Director of Lend Lease
Hyperion Mortgage Opportunity Fund, Inc. (formerly, Equitable Real
Estate Hyperion Mortgage Opportunity Fund, Inc.) and Lend Lease Hyperion
High Yield Commercial Mortgage Fund, Inc. (formerly, Equitable Real
Estate Hyperion High Yield Commercial Mortgage Fund, Inc.)
(1999-Present). Formerly, Director of Equitable Real Estate Hyperion
Mortgage Opportunity Fund, Inc. and Equitable Real Estate Hyperion High
Yield Commercial Mortgage Fund, Inc. (1995-1997); Financial Consultant
for Synetic Inc., manufacturer of porous plastic Materials for health
care uses (1989-1994); President, WW Acquisitions Corp. (1989-1990);
Senior Executive Vice President and Chief Operating Officer of The
Equitable Life Assurance Society of the United States ("The Equitable")
(1986-1988); Director of The Equitable and Chairman of Equitable
Investment Corporation, a holding company for The Equitable's investment
oriented subsidiaries (1983-1988); Chairman and Chief Executive Officer
of EQUICOR-Equitable HCA Corporation (1987-1988).
Age 67 June 1989 2,000

Patricia A. Sloan*
Director, Secretary Managing Director of Ranieri & Co., Inc. (1988-Present). Secretary,
Director and/or Trustee of several investment companies advised by
Hyperion Capital Management, Inc. or by its affiliates (1989-Present).
Director of Bank United Corp., the parent of Bank United (formerly Bank
United of Texas FSB) (1988-Present). Formerly Director of the Financial
Institutions Group of Salomon Brothers Inc (1972-1988).
Age 56 April 1994 300

</TABLE>
* Interested persons as defined in the Investment Company Act of 1940,
as amended (the "1940 Act"), because of affiliations with Hyperion
Capital Management, Inc., the Fund's Investment Advisor.
** The holdings of no director or nominee represented more than 1% of
the outstanding shares of the Fund.

Officers of the Fund. The officers of the Fund are chosen each year
at the first meeting of the Board of Directors of the Fund following the
Annual Meeting of Stockholders, to hold office at the discretion of the Board
of Directors until the meeting of the Board following the next Annual Meeting
of Stockholders and until their successors are chosen and qualified. The
Board of Directors has elected six officers of the Fund. Except where dates
of service are noted, all officers listed below served as such throughout the
1999 fiscal year. The following sets forth information concerning each
officer of the Fund who served during all or part of the last fiscal year of
the Fund:

<TABLE>
<S> <C> <C> <C>
Name and
Principal Occupation Office Age Officer Since

Andrew M. Carter Chairman 59 December 1998
See information under "ELECTION OF DIRECTORS."

Clifford E. Lai President 46 April 1993
President (since November 1998) and Chief Investment Officer, Hyperion Capital
Management, Inc. (March 1993-Present). Formerly Managing Director and Chief
Investment Strategist for Fixed Income, First Boston Asset Management
(1989-1993); Vice President, Morgan Stanley & Co. (1987-1989).

Patricia A. Botta Vice President 42 March 1997
Director of Hyperion Capital Management, Inc. (1989-Present). Formerly with the
Davco Group (1988-1989) and Salomon Brothers Inc. (1986-1988).

John H. Dolan Vice President 46 March 1998
Chief Investment Strategist of Hyperion Capital Management (1998-Present).
Formerly, Managing Director at Bankers Trust (1995-1997); Managing Director of
Salomon Brothers Inc. (1987-1995); Manager of mortgage-backed securities desk at
Citibank (1979-1987).

Patricia A. Sloan Secretary 56 July 1989
Managing Director of Ranieri & Co., Inc. (1988-Present); See information under
"ELECTION OF DIRECTORS."

Thomas F. Doodian Treasurer 40 February 1998
Director of Finance and Operations, Hyperion Capital Management, Inc. (July
1995-Present). Treasurer of several investment companies advised by Hyperion
Capital Management, Inc. (February 1998-Present). Formerly, Vice President in
Mortgage Backed Trading at Mabon Securities Corporation (1994-1995); fixed
income analyst, trader, and Vice President and Controller at Credit Suisse First
Boston (1984-1994).

</TABLE>
At November 30, 1999, directors and officers of the Fund as a group
owned beneficially less than 1% of the outstanding shares of the Fund. No
person, to the knowledge of management, owned beneficially more than 5% of the
Fund's outstanding shares at that date. The business address of the Fund and
its officers and directors is One Liberty Plaza, New York, New York 10006-1404.

Interested Persons. Mr. Ranieri serves as a Director and Vice
Chairman of the Board of the Advisor and Mr. Carter serves as Chairman and
Chief Executive Officer of the Advisor. Ms. Sloan is a special limited
partner of Hyperion Ventures, the sole general partner of Hyperion Partners
L.P., of which the Advisor is a wholly-owned subsidiary. As a result of their
service with the Advisor and certain affiliations with the Advisor as
described below, the Fund considers Messrs. Ranieri and Carter and Ms. Sloan
to be "interested persons" of the Fund within the meaning of Section 2(a)(19)
of the 1940 Act.

Committees and Board of Directors' Meetings. The Fund has a standing
Audit Committee presently consisting of Messrs. Walsh, Drake, Petersen, Birch
and English, all of whom are members of the Board of Directors and are
currently non-interested persons of the Fund. The principal functions of the
Fund's Audit Committee are to recommend to the Board the appointment of the
Fund's accountants, to review with the accountants the scope and anticipated
costs of their audit and to receive and consider a report from the accountants
concerning their conduct of the audit, including any comments or
recommendations they might want to make in that connection. During the last
fiscal year of the Fund, the full Board of Directors met four times, and the
Audit Committee met one time. All of the members of the Audit Committee
(except Mr. English) attended the Audit Committee meeting, and all of the
Directors attended at least 75% of the Board meetings. The Fund has a
Nominating and Compensation Committee.

Compensation of Directors and Executive Officers. No remuneration
was paid by the Fund to persons who were directors, officers or employees of
Hyperion Capital Management, Inc. or any affiliate thereof for their services
as directors or officers of the Fund. Each director of the Fund, other than
those who are officers or employees of Hyperion Capital Management, Inc. or
any affiliate thereof, is entitled to receive a fee of $7,500 per year plus
$1,000 for each Board of Directors' meeting attended. Members of the Audit
Committee receive $750 for each Audit Committee meeting attended, other than
meetings held on days when there is also a directors' meeting.

Directors' Compensation Table For The Twelve Month Period Ended 11/30/99

<TABLE>
<S> <C> <C>
Directors' Total Directors'
Compensation Compensation
from the from the Fund and the
Fund Fund Complex

Robert F. Birch.......................... $11,500 $46,000
Rodman L. Drake.......................... $11,500 $46,000
John W. English......................... $ 2,875 $ 5,750
Harry E. Petersen, Jr........................ $11,500 $46,000
Leo M. Walsh, Jr............................. $11,500 $46,000
Kenneth C.Weiss............................ $11,500 $40,250
Garth Marston (Director Emeritus).................... $ 5,750 $23,000
$66,125 $253,000
</TABLE>
Required Vote

Election of the listed nominees for director requires the affirmative
vote of the holders of a majority of the shares of Common Stock of the Fund
present or represented by proxy at the Annual Meeting.

PROPOSAL 2: RATIFICATION OR REJECTION OF
SELECTION OF INDEPENDENT ACCOUNTANTS

The Board of Directors of the Fund will consider, and it is expected
that they will recommend, the selection of PricewaterhouseCoopers LLP as
independent accountants of the Fund for the fiscal year ending November 30,
2000 at a meeting scheduled to be held on March 7, 2000. The appointment of
accountants is approved annually by the Audit Committee of the Board of
Directors and is subsequently submitted to the stockholders for ratification
or rejection. The Fund has been advised by PricewaterhouseCoopers LLP that at
November 30, 1999 neither that firm nor any of its partners had any direct or
material indirect financial interest in the Fund. A representative of
PricewaterhouseCoopers LLP will be at the meeting to answer questions
concerning the Fund's financial statements and will have an opportunity to
make a statement if he or she chooses to do so.

Required Vote

Ratification of the selection of PricewaterhouseCoopers LLP as
independent accountants of the Fund requires the affirmative vote of the
holders of a majority of the outstanding shares of Common Stock of the Fund
present or represented by proxy at the Annual Meeting.

ADDITIONAL INFORMATION

Investment Advisor

The Fund has engaged Hyperion Capital Management, Inc., the Advisor,
to provide professional investment management for the Fund pursuant to an
Advisory Agreement dated August 4, 1989. The Advisor is a Delaware
corporation which was organized in February 1989. The Advisor is a registered
investment advisor under the Investment Advisers Act of 1940, as amended
("1940 Act"). The business address of the Advisor, its officers, and directors
is One Liberty Plaza, New York, New York 10006-1404.

The Advisor is a subsidiary of Hyperion Partners L.P., a Delaware
limited partnership ("Hyperion Partners"). The sole general partner of
Hyperion Partners is Hyperion Ventures L.P., a Delaware limited partnership
("Hyperion Ventures"). Corporations owned principally by Lewis S. Ranieri,
Salvatore A. Ranieri and Scott A. Shay are the general partners of Hyperion
Ventures. Lewis S. Ranieri, a former Vice Chairman of Salomon Brothers Inc
("Salomon Brothers"), is the Vice Chairman of the Board of the Advisor and a
Director of the Fund. Mr. Carter is the Chairman and Chief Executive Officer
of the Advisor and Chairman of the Fund. Messrs. Salvatore Ranieri and Shay
are directors of the Advisor, but have no other positions with either the
Advisor or the Fund. Messrs. Salvatore Ranieri and Shay are principally
engaged in the management of the affairs of Hyperion Ventures and its
affiliated entities. Since January 1, 1990, Patricia A. Sloan, Secretary of
the Fund, has been a special limited partner of Hyperion Ventures and since
July 1993 she has been a limited partner of Hyperion Partners. Mr. Lai, the
President of the Fund, is an employee of the Advisor, and may be entitled, in
addition to receiving a salary from the Advisor, to receive a bonus based upon
a portion of the Advisor's profits, including any profit from a sale of the
Advisor. Ms. Botta and Mr. Dolan, Vice Presidents of the Fund, and Mr.
Doodian, Treasurer of the Fund, are also employees of the Advisor. The
business address of Hyperion Partners and Hyperion Ventures is 50 Charles
Lindbergh Boulevard, Suite 500, Uniondale, New York 11553.

The Advisor provides advisory services to several other registered
investment companies and one offshore fund, all of which invest in
mortgage-backed securities. Its management includes several individuals with
extensive experience in creating, evaluating and investing in Mortgage-Backed
Securities, Derivative Mortgage-Backed Securities and Asset-Backed Securities,
and in using hedging techniques. Lewis S. Ranieri, Vice Chairman of the
Advisor and Director of the Fund, was instrumental in the development of the
secondary mortgage-backed securities market and the creation and development
of secondary markets for conventional mortgage loans, CMOs and other
mortgage-related securities. While at Salomon Brothers, Mr. Ranieri directed
that firm's activities in the mortgage, real estate and government guaranteed
areas. Clifford E. Lai, President and Chief Investment Manager of the Advisor
and President of the Fund, was Managing Director and Chief Investment
Strategist for Fixed Income for First Boston Asset Management Corporation.

Investment Advisory Agreement

On March 9, 1999 the Board of Directors of the Fund, including those
persons identified as interested persons and a majority of the directors who
are not parties to the Advisory Agreement or interested persons (as such term
is defined in the 1940 Act) of any such party (the "Disinterested Directors"),
approved extension of the Advisory Agreement through March 31, 2000. At the
time of the Board's approval of the latest extension of the Advisory
Agreement, Messrs. Lewis Ranieri, Weiss and Ms. Sloan were interested persons
of the Fund. The Advisory Agreement was last submitted to a vote of the
Stockholders of the Fund at the first Annual Meeting of the Stockholders of
the Fund held on June 5, 1990. At that meeting, the Stockholders approved the
continuance of the Advisory Agreement. The Advisory Agreement provides that
it will continue from year to year, but only so long as such continuation is
specifically approved at least annually by both (1) the vote of a majority of
the Board of Directors or the vote of a majority of the outstanding voting
securities of the Fund (as provided in the 1940 Act) and (2) by the vote of a
majority of the Disinterested Directors cast in person at a meeting called for
the purpose of voting on such approval. The Advisory Agreement may be
terminated at any time without the payment of any penalty, upon the vote of a
majority of the Board of Directors or a majority of the outstanding voting
securities of the Fund or by the Advisor, on 60 days' written notice by either
party to the other. The Agreement will terminate automatically in the event
of its assignment (as such term is defined in the 1940 Act and the rules
thereunder). The Board of Directors will consider continuance of the Advisory
Agreement until March 31, 2001 at a meeting scheduled for March 7, 2000.

Pursuant to the Advisory Agreement, the Fund has retained the Advisor
to manage the investment of the Fund's assets and to provide, with the
assistance of Pacholder Associates, Inc. (the "Sub-Advisor"), such investment
research, advice and supervision, in conformity with the Fund's investment
objective and policies, as may be necessary for the operations of the Fund.

The Advisory Agreement provides, among other things, that the Advisor
will bear all expenses of its employees and overhead incurred in connection
with its duties under the Advisory Agreement, and will pay all salaries of the
Fund's directors and officers who are affiliated persons (as such term is
defined in the 1940 Act) of the Advisor. The Advisory Agreement provides that
the Fund shall pay to the Advisor a monthly fee for its services which is
equal to .65% per annum of the Fund's average weekly net assets, which, for
purposes of determining the Advisor's fee, shall be the average weekly value
of the total assets of the Fund, minus the sum of accrued liabilities
(including accrued expenses) of the Fund and any declared but unpaid dividends
on the Common Shares. Investment advisory fees paid by the Fund to the
Advisor during the last fiscal year of the Fund amounted to $1,456,297, of
which $63,649 was paid by the Advisor to the Sub-Advisor.

Sub-Advisor

Hyperion Capital Management, Inc., the Investment Advisor, has
engaged the Sub-Advisor to provide sub-investment advisory services for
investments in higher yielding, lower rated, or unrated fixed income
securities of U.S. corporations ("High Yield Securities"). The Sub-Advisor, a
registered investment adviser, is an Ohio corporation, organized in December,
1983, and currently manages approximately $700 million in corporate high yield
bonds and related securities and approximately $140 million of other
securities. The business address of the Sub-Advisor and its officers and
directors is 8044 Montgomery Road, Suite 480, Cincinnati, Ohio 45236.

The overall portfolio management strategy undertaken by the
Sub-Advisor on behalf of the Fund is mutually determined by the Investment
Advisor and the Sub-Advisor. The execution of the management strategy is
conducted under the general supervision and direction of William J. Morgan.
Mr. Morgan, a founder of the Sub-Advisor, is President of the Sub-Advisor.
Anthony L. Longi, Jr. has been responsible for the day-to-day management of
the Fund's High Yield Securities portfolio since November 1994. Mr. Longi is
an Executive Vice President and Fixed-Income Portfolio Manager of the
Sub-Advisor, where he has been employed since 1987. He has had numerous
positions within the firm, including high yield and investment grade
fixed-income analyst, special situations analyst, trader and research
coordinator. Dr. Asher O. Pacholder, Chairman of the Sub-Advisor, owns more
than 50% of the shares of the Sub-Advisor and Mr. Morgan owns more than 20% of
the shares. Both Dr. Pacholder and Mr. Morgan are directors of the
Sub-Advisor. No officer, director or employee of the Sub-Advisor is an
officer, director or nominee for election as a director of the Fund.

Although the Sub-Advisor will make all decisions with respect to the
Fund's investments in High Yield Securities on behalf of the Advisor, the
amount of the Fund's assets allocated to these investments will be determined
by the Advisor.

Sub-Advisory Agreement

On March 9, 1999 the Board of Directors of the Fund, including a
majority of the Disinterested Directors, approved extension of the
Sub-Advisory Agreement through March 31, 2000. No director of the Fund owned
any securities of, or had any other material direct or indirect interest, in
the Sub-Advisor or any person controlling, controlled by or under common
control with the Sub-Advisor on the date of the Disinterested Directors'
approval of the extension of the Sub-Advisory Agreement. The Sub-Advisory
Agreement was last submitted to a vote of the Stockholders of the Fund at the
first Annual Meeting of the Stockholders of the Fund held on June 5, 1990. At
that meeting the Stockholders approved the Sub-Advisory Agreement, which
contains the same provisions with respect to continuation and termination as
does the Advisory Agreement, except that the Sub-Advisory Agreement may not be
assigned without the consent of the other party thereto. The Board of
Directors will consider continuance of the Sub-Advisory Agreement until
March 31, 2001 at a meeting scheduled for March 7, 2000.

The Sub-Advisory Agreement provides, among other things, that the
Sub-Advisor will bear all expenses of its employees and overhead incurred in
connection with its duties under the Sub-Advisory Agreement. The Sub-Advisory
Agreement provides that the Advisor shall pay to the Sub-Advisor a monthly fee
for the Sub-Advisor's services which is equal to .35% per annum of the portion
of the Fund's average weekly net assets that is invested in High Yield
Securities (which shall be equal to the average weekly value of the total
assets invested in High Yield Securities, minus the sum of accrued liabilities
(including accrued expenses) directly related thereto and a pro rata
percentage of any declared but unpaid dividends on the Common Shares and a pro
rata percentage of accrued liabilities related to the Fund in general). The
Advisor has paid and intends to continue to pay the Sub-Advisor's fee out of
the fee that the Advisor will receive from the Fund. Investment advisory fees
paid by the Advisor to the Sub-Advisor during the last fiscal year of the Fund
amounted to $63,649.

Administration Agreement

The Fund has entered into an Administration Agreement with Hyperion
Capital Management, Inc. (the "Administrator"). The Administrator performs
administrative services necessary for the operation of the Fund, including
maintaining certain books and records of the Fund, and preparing reports and
other documents required by federal, state, and other applicable laws and
regulations, and provides the Fund with administrative office facilities. For
these services, the Fund pays a fee monthly at an annual rate of 0.20% of its
average weekly assets. For the twelve month period ended November 30, 1999,
the Administrator earned $448,092 in Administration fees. In addition, the
Administrator has entered into Administration Agreements with the other
investment companies listed below, with the following fee structure: a monthly
fee at an annual rate of 0.17% of the first $100 million of the Fund's average
weekly net assets, 0.145% of the next $150 million and 0.12% of any amounts
above $250 million.

Investment Companies Managed by Hyperion Capital Management, Inc.

In addition to acting as advisor to the Fund, Hyperion Capital
Management, Inc. acts as investment advisor to the following other investment
companies at the indicated annual compensation.

<TABLE>
<S> <C> <C>
Name of Fund Investment Advisory Fee Approximate Net Assets at
November 30, 1999
(in Millions)
Hyperion 1999 Term Trust, Inc.* 0.50% of the Trust's average weekly net assets $446,282
Hyperion 2002 Term Trust, Inc. 0.50% of the Trust's average weekly net assets $271,507
Hyperion 2005 Investment Grade
Opportunity Term Trust, Inc. 0.65% of the Trust's average weekly net assets $156,576

</TABLE>

* Hyperion 1999 Term Trust, Inc. was terminated on November 30, 1999.

Brokerage Commissions

The Fund paid an aggregate of $16,882 in brokerage commissions on its
securities purchases during its last fiscal year. In addition, the Fund paid
an aggregate of $4,992 in futures commissions during the last fiscal year, all
of which were paid to entities that are not affiliated with the Fund or the
Advisor.

The Advisor and the Sub-Advisor have discretion to select brokers and
dealers to execute portfolio transactions initiated by the Advisor and the
Sub-Advisor and to select the markets in which such transactions are to be
executed. The Advisory Agreement and the Sub-Advisory Agreement provide, in
substance, that in executing portfolio transactions and selecting brokers or
dealers, the primary responsibility of the Advisor and the Sub-Advisor is to
seek the best combination of net price and execution for the Fund. It is
expected that securities will ordinarily be purchased in primary markets, and
that in assessing the best net price and execution available to the Fund, the
Advisor and the Sub-Advisor will consider all factors they deem relevant,
including the price, dealer spread, the size, type and difficulty of the
transaction involved, the firm's general execution and operation facilities
and the firm's risk in positioning the securities involved. Transactions in
foreign securities markets may involve the payment of fixed brokerage
commissions, which are generally higher than those in the United States.

In selecting brokers or dealers to execute particular transactions
and in evaluating the best net price and execution available, the Advisor and
the Sub-Advisor are authorized to consider "brokerage and research services"
(as those terms are defined in Section 28(e) of the Securities Exchange Act of
1934). The Advisor and the Sub-Advisor are also authorized to cause the Fund
to pay to a broker or dealer who provides such brokerage and research services
a commission for executing a portfolio transaction which is in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction. The Advisor and the Sub-Advisor must determine in good
faith, however, that such commission was reasonable in relation to the value
of the brokerage and research services provided, viewed in terms of that
particular transaction or in terms of all the accounts over which the Advisor
or the Sub-Advisor exercise investment discretion. Research services
furnished by brokers through whom the Fund effects securities transactions may
be used by the Advisor and the Sub-Advisor in servicing all of the accounts
for which investment discretion is exercised by the Advisor or the
Sub-Advisor, and not all such services may be used by the Advisor or the
Sub-Advisor in connection with the Fund.

Compliance With Section 16 Reporting Requirements

Section 16(a) of the Securities Exchange Act of 1934 requires the
Fund's officers and directors and persons who own more than ten percent of a
registered class of the Fund's equity securities to file reports of ownership
and changes in ownership with the Securities and Exchange Commission and the
New York Stock Exchange. Officers, directors and greater than ten-percent
shareholders are required by SEC regulations to furnish the Fund with copies
of all Section 16(a) forms they file.

Based solely on its review of the copies of such forms received by
the Fund and written representations from certain reporting persons that all
applicable filing requirements for such persons had been complied with, the
Fund believes that, during the fiscal year ended November 30, 1999, all filing
requirements applicable to the Fund's officers, directors, and greater than
ten-percent beneficial owners were complied with.

OTHER BUSINESS

The Board of Directors of the Fund does not know of any other matter
which may come before the meeting. If any other matter properly comes before
the meeting, it is the intention of the persons named in the proxy to vote the
proxies in accordance with their judgment on that matter.

PROPOSALS TO BE SUBMITTED BY STOCKHOLDERS

All proposals by stockholders of the Fund that are intended to be
presented at the Fund's next Annual Meeting of Stockholders to be held in 2001
must be received by the Fund for inclusion in the Fund's proxy statement and
proxy relating to that meeting no later than September 25, 2000.

EXPENSES OF PROXY SOLICITATION

The cost of preparing, assembling and mailing material in connection
with this solicitation of proxies will be borne by the Fund. In addition to
the use of the mails, proxies may be solicited personally by regular employees
of the Fund, Hyperion Capital Management, Inc., or Corporate Investor
Communications, Inc., paid solicitors for the Fund, or by telephone or
telegraph. The anticipated cost of solicitation by the paid solicitors will
be nominal. The Fund's agreement with Corporate Investor Communications, Inc.
provides that such paid solicitors will perform a broker search and deliver
proxies in return for the payment of their fee plus the expenses associated
with this proxy solicitation. Brokerage houses, banks and other fiduciaries
will be requested to forward proxy solicitation material to their principals
to obtain authorization for the execution of proxies, and they will be
reimbursed by the Fund for out-of-pocket expenses incurred in this connection.

January 28, 2000

THE HYPERION TOTAL RETURN FUND, INC.
PROXY SOLICITED ON BEHALF OF THE DIRECTORS

The undersigned hereby appoints Patricia A. Sloan and Clifford
E. Lai, and each of them, attorneys and proxies for the undersigned, with full
power of substitution and revocation to represent the undersigned and to vote
on behalf of the undersigned all shares of The Hyperion Total Return Fund,
Inc. (the "Fund") which the undersigned is entitled to vote at the Annual
Meeting of Stockholders of the Fund to be held at The Downtown Association, 60
Pine Street (between William and Pearl Streets), New York, New York 10005, on
Tuesday, April 18, 2000 at 9:45 a.m., and at any adjournments thereof. The
undersigned hereby acknowledges receipt of the Notice of Meeting and
accompanying Proxy Statement and hereby instructs said attorneys and proxies
to vote said shares as indicated hereon. In their discretion, the proxies are
authorized to vote upon such other business as may properly come before the
Meeting. A majority of the proxies present and acting at the Meeting in
person or by substitute (or, if only one shall be so present, then that one)
shall have and may exercise all of the power of authority of said proxies
hereunder. The undersigned hereby revokes any proxy previously given.

NOTE: Please sign exactly as your name
appears on the Proxy. If joint owners,
EITHER may sign this Proxy. When
signing as attorney, executor,
administrator, trustee, guardian
or corporate officer, please
give full title.

Date , 2000

Signature(s), (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN THE ENCLOSED ENVELOPE

I PLAN DO NOT PLAN TO ATTEND THE ANNUAL MEETING OF STOCKHOLDERS ON April 18,
2000

Please indicate your vote by an "X" in the appropriate box below.
This Proxy, if properly executed, will be voted in the manner directed by the
stockholder. If no direction is made, this Proxy will be voted FOR election
of the nominees as Directors in Proposal 1 and FOR Proposal 2. Please refer
to the Proxy Statement for a discussion of the Proposals.

1. ELECTION OF DIRECTORS: FOR all nominees listed (except
as marked to the contrary below) WITHHOLD authority to vote for all
nominees

Class I:
Robert F. Birch
Andrew M. Carter
John W. English

(Instruction: To withhold authority to vote for any individual nominee(s),
write the name(s) of the nominee(s) on the line below.)

2. Ratification or rejection of the
selection of independent accountants
(a vote "FOR" is a vote for ratification) FOR AGAINST ABSTAIN

PLEASE SIGN AND DATE THIS PROXY ON THE REVERSE SIDE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE.

Report of Independent Accountants

To the Board of Directors and Shareholders of
The Hyperion Total Return Fund, Inc.

In planning and performing our audit of the financial statements of
The Hyperion Total Return Fund, Inc. (the "Fund") for the year ended
November 30, 1999, we considered its internal control, including
control activities for safeguarding securities, in order to determine
our auditing procedures for the purpose of expressing our opinion on
the financial statements and to comply with the requirements of Form
N-SAR, not to provide assurance on internal control.

The management of the Fund is responsible for establishing and
maintaining internal control. In fulfilling this responsibility,
estimates and judgments by management are required to assess the
expected benefits and related costs of controls. Generally, controls
that are relevant to an audit pertain to the entity's objective of
preparing financial statements for external purposes that are fairly
presented in conformity with generally accepted accounting
principles. Those controls include the safeguarding of assets
against unauthorized acquisition, use or disposition.

Because of inherent limitations in internal control, errors or fraud
may occur and not be detected. Also, projection of any evaluation of
internal control to future periods is subject to the risk that
controls may become inadequate because of changes in conditions or
that the effectiveness of their design and operation may deteriorate.

Our consideration of internal control would not necessarily disclose
all matters in internal control that might be material weaknesses
under standards established by the American Institute of Certified
Public Accountants. A material weakness is a condition in which the
design or operation of one or more of the internal control components
does not reduce to a relatively low level the risk that misstatements
caused by error or fraud in amounts that would be material in
relation to the financial statements being audited may occur and not
be detected within a timely period by employees in the normal course
of performing their assigned functions. However, we noted no matters
involving internal control and its operation, including controls for
safeguarding securities, that we consider to be material weaknesses
as defined above as of November 30, 1999.

This report is intended solely for the information and use of the
Board of Directors, management and the Securities and Exchange
Commission and is not intended to be and should not be used by anyone
other than these specified parties.

PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York
January 21, 2000

HYPERION TOTAL RETURN FUND, INC. (the "Registrant")
Form N-SAR for the period ending November 30, 1999
File Number 811-05820

This report is signed on behalf of the Registrant in the City of New York and
the State of New York on the 28th day of January, 2000.

HYPERION TOTAL RETURN FUND, INC.

By: /s/ Clifford E. Lai
Clifford E. Lai
President

Witness: /s/ Joseph Tropeano
Joseph Tropeano
Assistant Secretary