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[LOGO OF LOOMIS SAYLES FUNDS(TM) APPEARS HERE]
LOOMIS SAYLES
BOND FUND
INSTITUTIONAL CLASS
PROSPECTUS
APRIL 1, 1997 AS RESTATED
JULY 28, 1997
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[LOGO OF LOOMIS SAYLES FUNDS(TM) APPEARS HERE]
ONE FINANCIAL CENTER . BOSTON, MASSACHUSETTS 02111 . (617) 482-2450
THE LOOMIS SAYLES FUNDS
INSTITUTIONAL CLASS SHARES OF LOOMIS SAYLES BOND FUND
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PROSPECTUS
APRIL 1, 1997 AS RESTATED JULY 28, 1997
LOOMIS SAYLES BOND FUND
Loomis Sayles Bond Fund (the "Fund") is a series of Loomis Sayles Funds (the
"Trust"), a registered open-end management investment company, and is a no-
load mutual fund. Loomis, Sayles & Company, L.P. ("Loomis Sayles") is the
investment adviser of the Fund.
The Fund offers two classes of shares: an Institutional Class that is
described in this Prospectus and a Retail Class, with a lower investment
minimum for certain categories of investors and bearing higher expenses, that
is described in a separate prospectus. This Prospectus concisely describes the
information that an investor should know before investing in the Institutional
Class shares of the Fund. Please read it carefully and keep it for future
reference. A Statement of Additional Information dated April 1, 1997 is
available free of charge; write to Loomis Sayles Distributors, L.P. (the
"Distributor"), One Financial Center, Boston, Massachusetts 02111 or telephone
800-633-3330. The Statement of Additional Information, which contains more
detailed information about the Fund, has been filed with the Securities and
Exchange Commission (the "SEC") and is incorporated by reference into this
Prospectus. To obtain more information about the Retail Class of shares,
please call the Distributor toll-free at 800-633-3330 or contact your
financial intermediary.
For information about: For all other information about
.Establishing an account the Funds:
.Account procedures and status CALL 800-633-3330
.Exchanges
.Shareholder services
CALL 800-626-9390
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
1
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TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
SUMMARY OF EXPENSES....................................................... 3
FINANCIAL HIGHLIGHTS...................................................... 4
THE TRUST................................................................. 5
INVESTMENT OBJECTIVES AND POLICIES........................................ 5
MORE INFORMATION ABOUT THE FUND'S INVESTMENTS AND RISK CONSIDERATIONS..... 6
THE FUND'S INVESTMENT ADVISER............................................. 15
FUND EXPENSES............................................................. 15
PORTFOLIO TRANSACTIONS.................................................... 16
HOW TO PURCHASE SHARES.................................................... 16
SHAREHOLDER SERVICES...................................................... 18
HOW TO REDEEM SHARES...................................................... 19
CALCULATION OF PERFORMANCE INFORMATION.................................... 21
DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS AND TAXES........................... 22
APPENDIX A
DESCRIPTION OF BOND RATINGS............................................. 24
</TABLE>
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SUMMARY OF EXPENSES
The following information is provided as an aid in understanding the various
expenses that an investor in the Fund will bear indirectly. The information is
based on expenses for the Fund's fiscal year ended December 31, 1996. The
information below should not be considered a representation of past or future
expenses, as actual expenses may be greater or less than those shown. Also,
the 5% annual return assumed in the Example should not be considered a
representation of investment performance, as actual performance will vary.
<TABLE>
<CAPTION>
<S> <C>
Shareholder Transaction Expenses:
Maximum Sales Load Imposed on Purchases (as % of offering price)... none
Maximum Sales Load Imposed on Reinvested Dividends (as % of
offering price)................................................... none
Maximum Deferred Sales Load (as % of original purchase price or
redemption proceeds).............................................. none
Redemption Fees/1/................................................. none
Exchange Fees...................................................... none
Annual Operating Expenses (as a percentage of average net assets):
Management Fees.................................................... .60%
12b-1 Fees......................................................... none
Other Operating Expenses........................................... .15%
Total Operating Expenses........................................... .75%(/2/)
Example:
An investor would pay the following expenses on a $1,000 investment
assuming a 5% annual return (with or without a redemption at the
end of each time period):
One Year........................................................... $ 8
Three Years........................................................ 24
Five Years......................................................... 42
Ten Years.......................................................... 93
</TABLE>
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/1A/$5 charge applies to any wire transfer of redemption proceeds.
/2Loomis/Sayles has voluntarily agreed, for an indefinite period, to limit the
Bond Fund's Total Operating Expenses to 0.75%.
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FINANCIAL HIGHLIGHTS
(FOR AN INSTITUTIONAL CLASS SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE INDICATED PERIODS)
The following information is included in financial statements of the Fund
that have been audited by Coopers & Lybrand L.L.P., independent accountants.
The following information should be read in conjunction with the financial
statements and the notes thereto contained in the Fund's 1996 Annual Report,
which is incorporated by reference in this Prospectus and the Statement of
Additional Information.
<TABLE>
<CAPTION>
MAY 16*
YEAR ENDED DEC. 31, TO
--------------------------------------------- DEC. 31,
1996 1995 1994 1993 1992 1991
-------- -------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period..... $ 12.29 $ 10.05 $ 11.37 $ 10.36 $ 10.23 $10.00
-------- -------- ------- ------- ------- ------
Income from investment
operations--
Net investment income
(loss)................. 0.86 0.82 0.83 0.84 0.76 0.52
Net realized and
unrealized gain (loss)
on investments......... 0.35 2.32 (1.29) 1.43 0.67 0.36
-------- -------- ------- ------- ------- ------
Total from investment
operations............. 1.21 3.14 (0.46) 2.27 1.43 0.88
-------- -------- ------- ------- ------- ------
Less distributions--
Dividends from net
investment income...... (0.86) (0.82) (0.84) (0.81) (0.76) (0.52)
Distributions in excess
of net investment
income................. 0.00 0.00 (0.02) 0.00 0.00 0.00
Distributions from net
realized capital
gains.................. (0.26) (0.08) 0.00 (0.45) (0.54) (0.13)
-------- -------- ------- ------- ------- ------
Total distributions..... (1.12) (0.90) (0.86) (1.26) (1.30) (0.65)
-------- -------- ------- ------- ------- ------
Net asset value, end of
period.................. $ 12.38 $ 12.29 $ 10.05 $ 11.37 $ 10.36 $10.23
======== ======== ======= ======= ======= ======
Total return (%)......... 10.3 32.0 (4.1) 22.2 14.3 8.9
Net assets, end of period
(000)................... $541,244 $255,710 $82,985 $64,222 $18,472 $9,922
Ratio of operating
expenses to average net
assets (%).............. 0.75 0.79 0.84 0.94 1.00 1.00**
Ratio of net investment
income to average net
assets (%).............. 7.93 8.34 7.92 8.26 7.50 8.97**
Portfolio turnover rate
(%)..................... 42 35 87 170 101 126**
Without giving effect to
voluntary expense
limitations:
The ratio of operating
expenses to average net
assets would have
been (%)............... 0.75 0.79 0.84 0.94 1.55 1.78**
Net investment income
per share would have
been................... $ 0.86 $ 0.82 $ 0.83 $ 0.84 $ 0.70 $ 0.47
</TABLE>
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*Commencement of investment operations.
**Computed on an annualized basis.
NOTE: Further information about the Fund's performance is contained in the
Fund's Annual Report to shareholders, which may be obtained without
charge.
4
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THE TRUST
The Fund is a series of Loomis Sayles Funds (the "Trust"). The Trust is a
diversified open-end management investment company organized as a
Massachusetts business trust on February 20, 1991. The Trust is authorized to
issue an unlimited number of full and fractional shares of beneficial interest
in multiple series. Shares are freely transferable and entitle shareholders to
receive dividends as determined by the Trust's board of trustees and to cast a
vote for each share held at shareholder meetings. The Trust does not generally
hold shareholder meetings and will do so only when required by law.
Shareholders may call meetings to consider removal of the Trust's trustees.
INVESTMENT OBJECTIVE AND POLICIES
The Fund's investment objective is high total investment return through a
combination of current income and capital appreciation.
The Fund seeks to achieve its objective by normally investing substantially
all of its assets in fixed income securities, although up to 20% of its assets
may be invested in preferred stocks. At least 65% of the Fund's total assets
will normally be invested in bonds. The fixed income securities in which the
Fund may invest include corporate securities, securities issued or guaranteed
by the U.S. Government or its authorities or instrumentalities ("U.S.
Government Securities"), commercial paper, zero coupon securities, mortgage-
backed securities, collateralized mortgage obligations ("CMOs"), asset-backed
securities, when-issued securities, Rule 144A securities, repurchase
agreements and convertible securities. The Fund may engage in options and
futures transactions, repurchase transactions, foreign currency hedging
transactions and swap transactions.
The Fund may invest any portion of its assets in securities of Canadian
issuers, and up to 20% of its assets in securities of other foreign issuers.
The Fund may also invest up to 35% of its assets in securities of below
investment grade quality (commonly known as "junk bonds"). Securities of below
investment grade quality are securities rated below the top four rating
categories by each major rating agency that has rated the security, including
securities in the lowest rating categories, and unrated securities that Loomis
Sayles determines to be of comparable quality.
The percentages of the Fund's assets invested as of December 31, 1996 in
securities assigned to the various rating categories by Standard & Poor's and
Moody's Investors Service, Inc. ("Moody's") were as follows: "AAA"/"Aaa":
5.2%; "AA"/"Aa": 11.1%; "A"/"A": 9.5%; "BBB"/"Baa": 27.3%; "BB"/"Ba": 13.5%;
"B"/"B": 12.1%; "CCC"/"Caa": 5.1%.
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For temporary defensive purposes, the Fund may invest any portion of its
assets in fixed income securities, cash or any other securities deemed
appropriate by Loomis Sayles. Except for the Fund's investment objective, and
any investment policies that are identified as "fundamental," all of the
investment policies of the Fund may be changed without a vote of Fund
shareholders.
MORE INFORMATION ABOUT THE FUND'S INVESTMENTS
AND RISK CONSIDERATIONS
DEBT AND OTHER FIXED INCOME SECURITIES
The Fund may invest in fixed income securities of any maturity. Fixed income
securities pay a specified rate of interest or dividends, or a rate that is
adjusted periodically by reference to some specified index or market rate.
Fixed income securities include securities issued by federal, state, local and
foreign governments and related agencies, and by a wide range of private
issuers. Because interest rates vary, it is impossible to predict the income
of a Fund that invests in fixed income securities for any particular period.
The net asset value of such a Fund's shares will vary as a result of changes
in the value of the securities in the Fund's portfolio.
Fixed income securities are subject to market and credit risk. Market risk
relates to changes in a security's value as a result of changes in interest
rates generally. In general, the values of fixed income securities increase
when prevailing interest rates fall and decrease when interest rates rise.
Credit risk relates to the ability of the issuer to make payments of principal
and interest.
U.S. GOVERNMENT SECURITIES
U.S. Government Securities have different kinds of government support. For
example, some U.S. Government Securities, such as U.S. Treasury bonds, are
supported by the full faith and credit of the United States, whereas certain
other U.S. Government Securities issued or guaranteed by federal agencies or
government-sponsored enterprises are not supported by the full faith and
credit of the United States.
Although U.S. Government Securities generally do not involve the credit
risks associated with other types of fixed income securities, the market
values of U.S. Government Securities do go up and down as interest rates
change. Thus, for example, the value of an investment in a Fund that holds
U.S. Government Securities may fall during times of rising interest rates.
Yields on U.S. Government Securities tend to be lower than those on corporate
securities of comparable maturities.
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Some U.S. Government Securities, such as Government National Mortgage
Association Certificates ("GNMA"), are known as "mortgage-backed" securities.
Interest and principal payments on the mortgages underlying mortgage-backed
U.S. Government Securities are passed through to the holders of the security.
If the Fund purchases mortgage-backed securities at a discount or a premium,
the Fund will recognize a gain or loss when the payments of principal, through
prepayment or otherwise, are passed through to the Fund and, if the payment
occurs in a period of falling interest rates, the Fund may not be able to
reinvest the payment at as favorable an interest rate. As a result of these
principal prepayment features, mortgage-backed securities are generally more
volatile investments than many other fixed income securities.
In addition to investing directly in U.S. Government Securities, the Fund
may purchase certificates of accrual or similar instruments ("strips")
evidencing undivided ownership interests in interest payments or principal
payments, or both, in U.S. Government Securities. These investment instruments
may be highly volatile.
LOWER RATED FIXED INCOME SECURITIES
The Fund may invest up to 35% of its assets in securities rated below
investment grade (commonly referred to as "junk bonds"). A security will be
treated as being of investment grade quality if at the time the Fund acquires
it at least one major rating agency has rated the security in its top four
rating categories (even if another such agency has issued a lower rating), or
if the security is unrated but Loomis Sayles determines it to be of investment
grade quality. Lower rated fixed income securities generally provide higher
yields, but are subject to greater credit and market risk, than higher quality
fixed income securities. Lower rated fixed income securities are considered
predominantly speculative with respect to the ability of the issuer to meet
principal and interest payments. Achievement of the investment objective of a
Fund investing in lower rated fixed income securities may be more dependent on
Loomis Sayles' own credit analysis than is the case with higher quality bonds.
The market for lower rated fixed income securities may be more severely
affected than some other financial markets by economic recession or
substantial interest rate increases, by changing public perceptions of this
market or by legislation that limits the ability of certain categories of
financial institutions to invest in these securities. In addition, the
secondary market may be less liquid for lower rated fixed income securities.
This lack of liquidity at certain times may affect the values of these
securities and may make the evaluation and sale of these securities more
difficult. Securities in the lowest rating categories may be in poor standing
or in default. Securities in the lowest investment grade category (BBB or Baa)
have some speculative characteristics.
For more information about the ratings services' descriptions of the various
rating categories, see Appendix A.
7
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COMMON STOCKS AND OTHER EQUITY SECURITIES
Common stocks and similar equity securities, such as warrants and
convertibles, are volatile and more risky than some other forms of investment.
The value of an investment in a Fund that invests in equity securities may
sometimes decrease. Equity securities of companies with relatively small
market capitalization may be more volatile than the securities of larger, more
established companies and than the broad equity market indexes.
ZERO COUPON SECURITIES
The Fund may invest in "zero coupon" fixed income securities. These
securities accrue interest at a specified rate, but do not pay interest in
cash on a current basis. The Fund is required to distribute the income on
these securities to Fund shareholders as the income accrues, even though the
Fund is not receiving the income in cash on a current basis. Thus the Fund may
have to sell other investments to obtain cash to make income distributions at
times when Loomis Sayles would not otherwise deem it advisable to do so. The
market value of zero coupon securities is often more volatile than that of
non-zero coupon fixed income securities of comparable quality and maturity.
MORTGAGE-BACKED SECURITIES
The Fund may invest in mortgage-backed securities, such as GNMA or Federal
National Mortgage Association certificates, which differ from traditional debt
securities. Among the major differences are that interest and principal
payments are made more frequently, usually monthly, and that principal may be
prepaid at any time because the underlying mortgage loans generally may be
prepaid at any time. As a result, if the Fund purchases these assets at a
premium, a faster-than-expected prepayment rate will reduce yield to maturity,
and a slower-than-expected prepayment rate will increase yield to maturity. If
the Fund purchases mortgage-backed securities at a discount, faster-than-
expected prepayments will increase, and slower-than-expected prepayments will
reduce, yield to maturity. Prepayments, and resulting amounts available for
reinvestment by the Fund, are likely to be greater during a period of
declining interest rates and, as a result, are likely to be reinvested at
lower interest rates. Accelerated prepayments on securities purchased at a
premium may result in a loss of principal if the premium has not been fully
amortized at the time of prepayment. Although these securities will decrease
in value as a result of increases in interest rates generally, they are likely
to appreciate less than other fixed-income securities when interest rates
decline because of the risk of prepayments.
COLLATERALIZED MORTGAGE OBLIGATIONS
The Fund may invest in CMOs. A CMO is a security backed by a portfolio of
mortgages or mortgage-backed securities held under an indenture. CMOs
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may be issued either by U.S. Government instrumentalities or by non-
governmental entities. The issuer's obligation to make interest and principal
payments is secured by the underlying portfolio of mortgages or mortgage-
backed securities. CMOs are issued with a number of classes or series which
have different maturities and which may represent interests in some or all of
the interest or principal on the underlying collateral or a combination
thereof. CMOs of different classes are generally retired in sequence as the
underlying mortgage loans in the mortgage pool are repaid. In the event of
sufficient early prepayments on such mortgages, the class or series of CMOs
first to mature generally will be retired prior to its maturity. As with other
mortgage-backed securities, the early retirement of a particular class or
series of CMOs held by the Fund could involve the loss of any premium the Fund
paid when it acquired the investment and could result in the Fund's
reinvesting the proceeds at a lower interest rate than the retired CMO paid.
Because of the early retirement feature, CMOs may be more volatile than many
other fixed-income investments.
ASSET-BACKED SECURITIES
The Fund may invest in asset-backed securities. Through the use of trusts
and special purpose corporations, automobile and credit card receivables are
securitized in pass-through structures similar to mortgage pass-through
structures or in a pass-through structure similar to the CMO structure.
Generally, the issuers of asset-backed bonds, notes or pass-through
certificates are special purpose entities and do not have any significant
assets other than the receivables securing such obligations. In general, the
collateral supporting asset-backed securities is of shorter maturity than
mortgage loans. Instruments backed by pools of receivables are similar to
mortgage-backed securities in that they are subject to unscheduled prepayments
of principal prior to maturity. When the obligations are prepaid, the Fund
will ordinarily reinvest the prepaid amounts in securities the yields of which
reflect interest rates prevailing at the time. Therefore, the Fund's ability
to maintain a portfolio that includes high-yielding asset-backed securities
will be adversely affected to the extent that prepayments of principal must be
reinvested in securities that have lower yields than the prepaid obligations.
Moreover, prepayments of securities purchased at a premium could result in a
realized loss.
WHEN-ISSUED SECURITIES
The Fund may purchase securities on a "when-issued" basis. This means that
the Fund will enter into a commitment to buy the security before the security
has been issued. The Fund's payment obligation and the interest rate on the
security are determined when the Fund enters into the commitment. The security
is typically delivered to the Fund 15 to 120 days later. No interest accrues
on the security between the time the Fund enters into the commitment and the
time the security is delivered. If the value of the security being
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purchased falls between the time the Fund commits to buy it and the payment
date, the Fund may sustain a loss. The risk of this loss is in addition to the
Fund's risk of loss on the securities actually in its portfolio at the time.
In addition, when the Fund buys a security on a when-issued basis, it is
subject to the risk that market rates of interest will increase before the
time the security is delivered, with the result that the yield on the security
delivered to the Fund may be lower than the yield available on other,
comparable securities at the time of delivery. If the Fund has outstanding
obligations to buy when-issued securities, it will maintain liquid assets in a
segregated account at its custodian bank in an amount sufficient to satisfy
these obligations.
RULE 144A SECURITIES
The Fund may invest in Rule 144A securities, which are privately offered
securities that can be resold only to certain qualified institutional buyers.
Rule 144A securities are treated as illiquid, unless Loomis Sayles has
determined, under guidelines established by the Trust's trustees, that the
particular issue of Rule 144A securities is liquid.
FOREIGN SECURITIES
The Fund may invest in securities of issuers organized or headquartered
outside the United States ("foreign securities"). The Fund may invest any
portion of its assets in securities of Canadian issuers, but will not purchase
foreign securities other than those of Canadian issuers if, as a result, the
Fund's holdings of non-U.S. and non-Canadian securities would exceed 20% of
the Fund's total assets.
Although investing in foreign securities may increase the Fund's
diversification and reduce portfolio volatility, foreign securities may
present risks not associated with investments in comparable securities of U.S.
issuers. There may be less information publicly available about a foreign
corporate or government issuer than about a U.S. issuer, and foreign corporate
issuers are not generally subject to accounting, auditing and financial
reporting standards and practices comparable to those in the United States.
The securities of some foreign issuers are less liquid and at times more
volatile than securities of comparable U.S. issuers. Foreign brokerage
commissions and securities custody costs are often higher than in the United
States. With respect to certain foreign countries, there is a possibility of
governmental expropriation of assets, confiscatory taxation, political or
financial instability and diplomatic developments that could affect the value
of investments in those countries. The Fund's receipt of interest on foreign
government securities may depend on the availability of tax or other revenues
to satisfy the issuer's obligations.
The Fund's investments in foreign securities may include investments in
countries whose economies or securities markets are not yet highly developed.
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Special considerations associated with these investments (in addition to the
considerations regarding foreign investments generally) may include, among
others, greater political uncertainties, an economy's dependence on revenues
from particular commodities or on international aid or development assistance,
currency transfer restrictions, highly limited numbers of potential buyers for
such securities and delays and disruptions in securities settlement
procedures.
Since most foreign securities are denominated in foreign currencies or
traded primarily in securities markets in which settlements are made in
foreign currencies, the value of these investments and the net investment
income available for distribution to shareholders of a Fund investing in these
securities may be affected favorably or unfavorably by changes in currency
exchange rates or exchange control regulations. Changes in the value relative
to the U.S. dollar of a foreign currency in which the Fund's holdings are
denominated will result in a change in the U.S. dollar value of the Fund's
assets and the Fund's income available for distribution.
In addition, although part of the Fund's income may be received or realized
in foreign currencies, the Fund will be required to compute and distribute its
income in U.S. dollars. Therefore, if the value of a currency relative to the
U.S. dollar declines after the Fund's income has been earned in that currency,
translated into U.S. dollars and declared as a dividend, but before payment of
the dividend, the Fund could be required to liquidate portfolio securities to
pay the dividend. Similarly, if the value of a currency relative to the U.S.
dollar declines between the time the Fund accrues expenses in U.S. dollars and
the time such expenses are paid, the amount of such currency required to be
converted into U.S. dollars will be greater than the equivalent amount in such
currency of such expenses at the time they were incurred.
In determining whether to invest assets of the Funds in securities of a
particular foreign issuer, Loomis Sayles will consider the likely effects of
foreign taxes on the net yield available to the Fund and its shareholders.
Compliance with foreign tax law may reduce a Fund's net income available for
distribution to shareholders.
FOREIGN CURRENCY HEDGING TRANSACTIONS
The Fund may engage in foreign currency exchange transactions to protect the
value of specific portfolio positions or in anticipation of changes in
relative values of currencies in which current or future Fund portfolio
holdings are denominated or quoted. For example, to protect against a change
in the foreign currency exchange rate between the date on which the Fund
contracts to purchase or sell a security and the settlement date for the
purchase or sale, or to "lock in" the equivalent of a dividend or interest
payment in another currency, the Fund might purchase or sell a foreign
currency on a spot (that is, cash) basis
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at the prevailing spot rate. If conditions warrant, the Fund may also enter
into private contracts to purchase or sell foreign currencies at a future date
("forward contracts"). The Fund might also purchase exchange-listed and over-
the-counter call and put options on foreign currencies. Over-the-counter
currency options are generally less liquid than exchange-listed options, and
will be treated as illiquid assets. The Fund may not be able to dispose of
over-the-counter options readily.
Foreign currency transactions involve costs and may result in losses. In
addition, the Fund's ability to engage in currency hedging transactions may be
limited by tax considerations.
SWAP TRANSACTIONS
The Fund may enter into interest rate or currency swaps. The Fund will enter
into these transactions primarily to preserve a return or spread on a
particular investment or portion of its portfolio, to protect against currency
fluctuations, as a duration management technique or to protect against any
increase in the price of securities the Fund anticipates purchasing at a later
date. Interest rate swaps involve the exchange by a Fund with another party of
their respective commitments to pay or receive interest (for example, an
exchange of floating rate payments for fixed rate payments with respect to a
notional amount of principal). A currency swap is an agreement to exchange
cash flows on a notional amount based on changes in the relative values of the
specified currencies. The Fund will maintain liquid assets in a segregated
custodial account to cover its current obligations under swap agreements.
Because swap agreements are not exchange-traded, but are private contracts
into which the Fund and a swap counterparty enter as principals, the Fund may
experience a loss or delay in recovering assets if the counter party were to
default on its obligations.
OPTIONS AND FUTURES TRANSACTIONS
The Fund may buy, sell or write options on securities, securities indexes,
currencies or futures contracts and may buy and sell futures contracts on
securities, securities indexes or currencies. The Fund may engage in these
transactions either for the purpose of enhancing investment return, or to
hedge against changes in the value of other assets that the Funds own or
intend to acquire. Options and futures fall into the broad category of
financial instruments known as "derivatives" and involve special risks. Use of
options or futures for other than hedging purposes may be considered a
speculative activity, involving greater risks than are involved in hedging.
Options can generally be classified as either "call" or "put" options. There
are two parties to a typical options transaction: the "writer" and the
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"buyer." A call option gives the buyer the right to buy a security or other
asset (such as an amount of currency or a futures contract) from, and a put
option gives the buyer the right to sell a security or other asset to, the
option writer at a specified price, on or before a specified date. The buyer
of an option pays a premium when purchasing the option, which reduces the
return on the underlying security or other asset if the option is exercised,
and results in a loss if the option expires unexercised. The writer of an
option receives a premium from writing an option, which may increase its
return if the option expires or is closed out at a profit. If the Fund as the
writer of an option is unable to close out an unexpired option, it must
continue to hold the underlying security or other asset until the option
expires, to "cover" its obligation under the option.
A futures contract creates an obligation by the seller to deliver and the
buyer to take delivery of the type of instrument or cash at the time and in
the amount specified in the contract. Although many futures contracts call for
the delivery (or acceptance) of the specified instrument, futures are usually
closed out before the settlement date through the purchase (or sale) of a
comparable contract. If the price of the sale of the futures contract by the
Fund exceeds (or is less than) the price of the offsetting purchase, the Fund
will realize a gain (or loss).
The value of options purchased by the Fund and futures contracts held by a
Fund may fluctuate based on a variety of market and economic factors. In some
cases, the fluctuations may offset (or be offset by) changes in the value of
securities held in the Fund's portfolio. All transactions in options and
futures involve the possible risk of loss to the Fund of all or a significant
part of the value of its investment. In some cases, the risk of loss may
exceed the amount of the Fund's investment. When the Fund writes a call option
or sells a futures contract without holding the underlying securities,
currencies or futures contracts, its potential loss is unlimited. The Fund
will be required, however, to set aside with its custodian bank certain assets
in amounts sufficient at all times to satisfy its obligations under options,
futures and contracts.
The successful use of options and futures will usually depend on Loomis
Sayles' ability to forecast stock market, currency or other financial market
movements correctly. The Fund's ability to hedge against adverse changes in
the value of securities held in its portfolio through options and futures also
depends on the degree of correlation between changes in the value of futures
or options positions and changes in the values of the portfolio securities.
The successful use of futures and exchange traded options also depends on the
availability of a liquid secondary market to enable the Fund to close its
positions on a timely basis. There can be no assurance that such a market will
exist at any particular time. In the case of options that are not traded on an
exchange ("over-the-counter" options), the Fund is at risk that the other
party to the transaction will
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default on its obligations, or will not permit the Fund to terminate the
transaction before its scheduled maturity. As a result of these
characteristics, the Fund will treat most over-the-counter options (and the
assets it segregates to cover its obligations thereunder) as illiquid.
The options and futures markets of foreign countries are small compared to
those of the United States and consequently are characterized in most cases by
less liquidity than are the U.S. markets. In addition, foreign markets may be
subject to less detailed reporting requirements and regulatory controls than
U.S. markets. Furthermore, investments in options in foreign markets are
subject to many of the same risks as other foreign investments. See "Foreign
Securities" above.
REPURCHASE AGREEMENTS
The Fund may invest in repurchase agreements. In repurchase agreements, the
Fund buys securities from a seller, usually a bank or brokerage firm, with the
understanding that the seller will repurchase the securities at a higher price
at a later date. Such transactions afford an opportunity for the Fund to earn
a return on available cash at minimal market risk, although the Fund may be
subject to various delays and risks of loss if the seller is unable to meet
its obligations to repurchase.
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THE FUNDS' INVESTMENT ADVISER
The Fund's investment adviser is Loomis Sayles, One Financial Center,
Boston, Massachusetts 02111. Founded in 1926, Loomis Sayles is one of the
country's oldest and largest investment firms. Loomis Sayles' general partner
is indirectly owned by New England Investment Companies, L.P., a publicly-
traded limited partnership whose general partner is indirectly owned by
Metropolitan Life Insurance Company.
In addition to selecting and reviewing the Fund's investments, Loomis Sayles
provides executive and other personnel for the management of the Fund. The
Loomis Sayles Funds' board of trustees supervises Loomis Sayles' conduct of
the affairs of the Fund.
Daniel J. Fuss, President of the Trust and Executive Vice President of
Loomis Sayles, has served as the portfolio manager of the Bond Fund since its
commencement of investment operations in 1991.
FUND EXPENSES
The Fund pays Loomis Sayles a monthly investment advisory fee of .60% of the
Fund's average daily net assets. In addition to the investment advisory fee,
the Fund pays all expenses not expressly assumed by Loomis Sayles, including
taxes, brokerage commissions, fees and expenses of registering or qualifying
the Fund's shares under federal and state securities laws, fees of the Fund's
custodian, transfer agent, independent accountants and legal counsel, expenses
of shareholders' and trustees' meetings, expenses of preparing, printing and
mailing prospectuses to existing shareholders and fees of trustees who are not
directors, officers or employees of Loomis Sayles or its affiliated companies.
Loomis Sayles has voluntarily agreed, for an indefinite period, to reduce
its advisory fees and/or bear other Fund expenses to the extent necessary to
limit total annual operating expenses of the Institutional Class shares of the
Fund to .75% of the Fund's average net assets. Loomis Sayles may change or
terminate this voluntary arrangement at any time, but the Fund's Prospectus
would be supplemented to describe the change.
Loomis Sayles may pay certain broker-dealers and financial intermediaries
whose customers own shares of the Funds a continuing fee in an amount of up to
.25% annually of the value of Fund shares held for those customers' accounts.
These fees are paid by Loomis Sayles out of its own assets and are not
assessed against the Fund.
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PORTFOLIO TRANSACTIONS
Portfolio turnover considerations will not limit Loomis Sayles' investment
discretion in managing the Fund's assets. The Fund anticipates that its
portfolio turnover rates will vary significantly from time to time depending
on the volatility of economic and market conditions. High portfolio turnover
may involve higher costs and higher levels of taxable gains.
HOW TO PURCHASE SHARES
An investor may make an initial purchase of shares of the Fund by submitting
a completed application form and payment to:
Boston Financial Data Services
P.O. Box 8314
Boston, Massachusetts 02266-8314
Attn: Loomis Sayles Funds
The minimum initial investment for the Institutional Class of the Fund's
shares is $1 million. However, this minimum investment does not apply to
shareholders of any of the funds that are series of Loomis Sayles Funds who
have an account that has been in continuous existence since December 31, 1996
("Original Shareholders"). Original Shareholders may open an Institutional
Class account in any fund that is a series of Loomis Sayles Funds with no
minimum investment if they purchase shares by exchanging Institutional Class
shares. Original Shareholders who hold their accounts through financial
intermediaries may avoid minimum investment requirements only through this
method. Original Shareholders whose accounts are held directly with Boston
Financial Data Services, Inc. ("BFDS"), the shareholder servicing agent for
State Street Bank and Trust Company ("State Street Bank"), may also open an
Institutional Class account in a new fund by investing a minimum of $2,500.
For additional information regarding the eligibility of Original Shareholders
to purchase Institutional Class shares, call the Distributor toll-free at 800-
633-3330. A $2,500 minimum investment also applies to the current and retired
trustees of the Trust, investment advisory clients of Loomis Sayles (and their
directors, officers and employees), and current and retired employees of
Loomis Sayles and the parents, spouses and children of the foregoing. The
minimum investment may be waived by Loomis Sayles in its sole discretion and
will be waived for any new shareholder in the Loomis Sayles Funds who
initially invests less than $1 million but signs a letter of intent stating
the shareholder's intention to bring his or her balance to $1 million within
six months of the initial purchase. Loomis Sayles reserves the right to
redeem, at net asset value, the
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accounts of shareholders that have signed a letter of intent but fail to meet
the minimum investment within the specified time. Subsequent investments must
be at least $50.
Shares of the Fund may be purchased by (i) cash, (ii) exchanging
Institutional Class shares of any Fund (or any other series of Loomis Sayles
Funds), (iii) exchanging securities on deposit with a custodian acceptable to
Loomis Sayles or (iv) a combination of such securities and cash. Loomis Sayles
will not approve the acceptance of securities in exchange for shares of the
Fund unless (1) Loomis Sayles, in its sole discretion, believes the securities
are appropriate investments for the Fund; (2) the investor represents and
agrees that all securities offered to the Fund can be resold by the Fund
without restriction under the Securities Act of 1933, as amended (the
"Securities Act") or otherwise; and (3) the securities are eligible to be
acquired under the Fund's investment policies and restrictions. No investor
owning 5% or more of a Fund's shares may purchase additional shares of that
Fund by exchange of securities.
In all cases Loomis Sayles reserves the right to reject any securities that
are proposed for exchange. Securities accepted by Loomis Sayles in exchange
for Fund shares will be valued in the same manner as the Fund's assets as
described below as of the time of the Fund's next determination of net asset
value after such acceptance. All dividends and subscription or other rights
which are reflected in the market price of accepted securities at the time of
valuation become the property of the Fund and must be delivered to the Fund
upon receipt by the investor from the issuer. A gain or loss for federal
income tax purposes would be realized upon the exchange by an investor that is
subject to federal income taxation, depending upon the investor's basis in the
securities tendered. An investor who wishes to purchase shares by exchanging
securities should obtain instructions by calling 800-633-3330.
All purchases made by check should be in U.S. dollars and made payable to
State Street Bank and Trust Company. Third party checks will not be accepted.
When purchases are made by check or periodic account investment, redemption
will not be allowed until the investment being redeemed has been in the
account for 15 calendar days.
Upon acceptance of an investor's order, BFDS opens an account, applies the
payment to the purchase of full and fractional Fund shares and mails a
statement of the account confirming the transaction.
After an account has been established, an investor may send subsequent
investments at any time directly to BFDS at the above address. The remittance
must be accompanied by either the account identification slip detached from a
statement of account or a note containing sufficient information to identify
the
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account, i.e., the Fund name and the investor's account number or name and
social security number.
Subsequent investments can also be made by federal funds wire. Investors
should instruct their banks to wire federal funds to State Street Bank and
Trust Company, ABA #011000028. The text of the wire should read as follows:
"$ amount, STATE STREET BOS ATTN Mutual Funds. Credit Fund (Fund Name and
Institutional Class), DDA #9904-622-9, Shareholder Name, Shareholder Account
Number." A bank may charge a fee for transmitting funds by wire.
The Fund and the Distributor reserve the right to reject any purchase order,
including orders in connection with exchanges, for any reason which the Fund
or the Distributor in its sole discretion deems appropriate. Although the Fund
does not presently anticipate that it will do so, the Fund reserves the right
to suspend or change the terms of the offering of its shares.
The price an investor pays will be the per share net asset value next
calculated after a proper investment order is received by the Trust's transfer
or other agent or subagent. Shares of the Fund are sold with no sales charge.
The net asset value of the Fund's shares is calculated once daily as of the
close of regular trading on the New York Stock Exchange on each day the
Exchange is open for trading, by dividing the Fund's net assets by the number
of shares outstanding. Portfolio securities are valued at their market value
as more fully described in the Statement of Additional Information.
The Distributor may accept telephone orders from broker-dealers who have
been previously approved by the Distributor. It is the responsibility of such
broker-dealers to promptly forward purchase or redemption orders to the
Distributor. Although there is no sales charge imposed by the Fund or the
Distributor, broker-dealers may charge the investor a transaction-based fee or
other fee for their services at either the time of purchase or the time of
redemption. Such charges may vary among broker-dealers but in all cases will
be retained by the broker-dealer and not remitted to the Fund.
The Fund also offers a Retail Class of shares that has a $250,000 minimum
investment for certain categories of investors and bears higher expenses.
Because of its lower expenses, the Institutional Class of shares of the Fund
is expected to have a higher total return than the Retail Class of shares.
SHAREHOLDER SERVICES
The Fund offers the following shareholder services, which are more fully
described in the Statement of Additional Information. Explanations and forms
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are available from BFDS. Telephone redemption and exchange privileges will be
established automatically when an investor opens an account unless an investor
elects on the application to decline the privileges. Other privileges must be
specifically elected. A signature guarantee will be required to establish a
privilege after an account is opened.
FREE EXCHANGE PRIVILEGE. Institutional Class shares of the Fund may be
exchanged for Institutional Class shares of any other fund that is a series of
Loomis Sayles Funds and that offers Institutional Class shares or for shares
of certain money market funds advised by New England Funds Management, L.P.,
an affiliate of Loomis Sayles. Exchanges may be made by written instructions
or by telephone, unless an investor elected on the application to decline
telephone exchange privileges. The exchange privilege should not be viewed as
a means for taking advantage of short-term swings in the market, and the Funds
reserve the right to terminate or limit the privilege of any shareholder who
makes more than four exchanges in any calendar year. The Fund may terminate or
change the terms of the exchange privilege at any time, upon 60 days' notice
to shareholders.
RETIREMENT PLANS. The Fund's Institutional Class shares may be purchased by
all types of tax-deferred retirement plans. Loomis Sayles makes available
retirement plan forms for IRAs.
SYSTEMATIC WITHDRAWAL PLAN. If the value of an account is at least $25,000,
an investor may have periodic cash withdrawals automatically paid to the
investor or any person designated by the investor.
AUTOMATIC INVESTMENT PLAN. Voluntary monthly investments of at least $50 may
be made automatically by pre-authorized withdrawals from an investor's
checking account.
HOW TO REDEEM SHARES
An investor can redeem shares by sending a written request to Boston
Financial Data Services, Inc., P.O. Box 8314, Boston, Massachusetts 02266.
Proceeds from a written request may be sent to the investor in the form of a
check. As described below, an investor may also redeem shares by calling BFDS
at 800-626-9390. Proceeds resulting from a telephone redemption request can be
wired to an investor's bank account or sent by check in the name of the
registered owners to their record address.
The written request must include the name of the Fund, the account number,
the exact name(s) in which the shares are registered, and the number of shares
or the dollar amount to be redeemed. All owners of the shares must sign
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the request in the exact names in which the shares are registered (this
appears on an investor's confirmation statement) and should indicate any
special capacity in which they are signing (such as trustee or custodian or on
behalf of a partnership, corporation or other entity). Shareholders requesting
that redemption proceeds be wired to their bank accounts must provide specific
wire instructions.
If (1) an investor is redeeming shares worth more than $50,000, (2) an
investor is requesting that the proceeds check be made out to someone other
than the registered owners or be sent to an address other than the record
address, (3) the account registration has changed within the last 30 days or
(4) an investor is instructing us to wire the proceeds to a bank account not
designated on the application, the investor must have his or her signature
guaranteed by an eligible guarantor. Eligible guarantors include commercial
banks, trust companies, savings associations, credit unions and brokerage
firms that are members of domestic securities exchanges. Before submitting the
redemption request, an investor should verify with the guarantor institution
that it is an eligible guarantor. Signature guarantees by notaries public are
not acceptable.
If an investor has requested certificates for the investment, the investor
must enclose the certificates and a properly completed redemption form or
stock power. The Funds recommend that certificates be sent by registered mail.
When an investor telephones a redemption request, the proceeds are wired to
the bank account previously chosen by the investor. A wire fee (currently $5)
will be deducted from the proceeds. A telephonic redemption request must be
received by BFDS prior to the close of regular trading on the New York Stock
Exchange. If an investor telephones a request to BFDS after the Exchange
closes or on a day when the Exchange is not open for business, BFDS cannot
accept the request and a new one will be necessary.
If an investor decides to change the bank account to which proceeds are to
be wired, the investor must send in this change on the Service Options Form
with a signature guarantee. Telephonic redemptions may only be made if the
investor's bank is a member of the Federal Reserve System or has a
correspondent bank that is a member of the System. Unless an investor
indicates otherwise on the account application, BFDS will be authorized to act
upon redemption and exchange instructions received by telephone from the
investor or any person claiming to act as the investor's representative who
can provide BFDS with the investor's account registration and address as it
appears on the records of State Street Bank. BFDS will employ these or other
reasonable procedures to confirm that instructions communicated by telephone
are genuine; the Fund, State Street Bank, BFDS, the Distributor and Loomis
Sayles will not be liable for any losses due to unauthorized or fraudulent
instructions if these or other reasonable procedures are followed. For
information, consult BFDS. In
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times of heavy market activity, an investor who encounters difficulty in
placing a redemption or exchange order by telephone may wish to place the
order by mail as described above.
The redemption price will be the net asset value per share next determined
after the redemption request and any necessary special documentation are
received by BFDS in proper form.
Proceeds resulting from a written redemption request will normally be mailed
to an investor within seven days after receipt of the investor's request in
good order. Telephonic redemption proceeds will normally be wired to an
investor's bank on the first business day following receipt of a proper
redemption request. If an investor purchased shares by check and the check was
deposited less than 15 days prior to the redemption request, the Fund may
withhold redemption proceeds until the check has cleared.
The Fund may suspend the right of redemption and may postpone payment for
more than seven days when the New York Stock Exchange is closed for other than
weekends or holidays, or if permitted by the rules of the SEC when trading on
the Exchange is restricted or during an emergency which makes it impracticable
for the Fund to dispose of its securities or to determine fairly the value of
its net assets, or during any other period permitted by the SEC for the
protection of investors.
Loomis Sayles may pay certain broker-dealers and financial intermediaries
whose customers own shares of the Fund a continuing fee in an amount of up to
0.25% annually of the value of Fund shares held for those customers' accounts.
These fees are paid by Loomis Sayles out of its own assets and are not
assessed against the customers' accounts with the Fund.
CALCULATION OF PERFORMANCE INFORMATION
The Fund's investment performance may from time to time be included in
advertisements about the Fund or Loomis Sayles Funds. "Yield" for each class
of shares is calculated by dividing the annualized net investment income per
share during a recent 30-day period by the maximum public offering price per
share of the class on the last day of that period.
For purposes of calculating yield, net investment income is calculated in
accordance with SEC regulations and may differ from net investment income as
determined for financial reporting purposes. SEC regulations require that net
investment income be calculated on a "yield-to-maturity" basis, which has the
effect of amortizing any premiums or discounts in the current market value of
fixed income securities. The current dividend rate is based on net investment
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income as determined for tax purposes, which may not reflect amortization in
the same manner.
"Total return" for the one-, five- and ten-year periods (or for the life of
a class, if shorter) through the most recent calendar quarter represents the
average annual compounded rate of return on an investment of $1,000 in the
Fund. Total return may also be presented for other periods.
DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS AND TAXES
The Fund declares and pays dividends quarterly. The Fund also distributes
all of its net capital gains realized from the sale of portfolio securities.
Any capital gain distributions are normally made annually, but may, to the
extent permitted by law, be made more frequently as deemed advisable by the
trustees of the Trust. The Trust's trustees may change the frequency with
which the Fund declares or pays dividends.
Dividends and capital gain distributions will automatically be reinvested in
additional shares of the Fund on the record date unless an investor has
elected to receive cash.
The Fund intends to qualify as a regulated investment company under the
Internal Revenue Code of 1986, as amended. As such, so long as the Fund
distributes substantially all its net investment income and net capital gains
to its shareholders, the Fund itself does not pay any federal income tax to
the extent such income and gains are so distributed.
An investor's income dividends and short-term capital gain distributions are
taxable as ordinary income whether distributed in cash or additional shares.
Long-term capital gain distributions from the Fund are taxable as long-term
capital gains whether distributed in cash or additional shares and regardless
of how long an investor has owned shares of the Fund.
The Fund is required to withhold 31% of any redemption proceeds (including
the value of shares exchanged) and all income dividends and capital gain
distributions it pays (1) if an investor does not provide a correct, certified
taxpayer identification number, (2) if the Fund is notified that an investor
has underreported income in the past, or (3) if an investor fails to certify
to the Fund that he or she is not subject to such withholding.
Dividends derived from interest on U.S. Government Securities may be exempt
from state and local taxes.
State Street Bank will send investors and the IRS an annual statement
detailing federal tax information, including information about dividends and
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distributions paid during the preceding year. An investor should keep this
statement as a permanent record. A fee may be charged for any duplicate
information requested.
NOTE: The foregoing summarizes certain tax consequences of investing in the
Fund. Before investing, an investor should consult his or her own tax
adviser for more information concerning the federal, state and local
tax consequences of investing in, redeeming or exchanging Fund
shares.
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APPENDIX A
DESCRIPTION OF BOND RATINGS ASSIGNED BY
STANDARD & POOR'S AND
MOODY'S INVESTORS SERVICE, INC.
STANDARD & POOR'S
AAA
This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay interest and
repay principal.
AA
Bonds rated AA also qualify as high quality debt obligations. Capacity to
pay interest and repay principal is very strong, and in the majority of
instances they differ from AAA issues only in small degree.
A
Bonds rated A have a strong capacity to pay interest and repay principal,
although they are somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions.
BBB
Bonds rated BBB are regarded as having an adequate capacity to pay interest
and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to repay principal and pay interest for
bonds in this category than for bonds in higher rated categories.
BB, B, CCC, CC
Bonds rated BB, B, CCC and CC are regarded, on balance, as predominantly
speculative with respect to capacity to pay interest and repay principal in
accordance with the terms of the obligation. BB indicates the lowest degree of
speculation and CC the highest degree of speculation. While such bonds will
likely have some quality and protective characteristics, these are outweighed
by large uncertainties or major risk exposures to adverse conditions.
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C
The rating C is reserved for income bonds on which no interest is being
paid.
D
Bonds rated D are in default, and payment of interest and/or repayment of
principal is in arrears.
Plus (+) or Minus (-): The ratings from "AA" to "B" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
MOODY'S INVESTORS SERVICE, INC.
AAA
Bonds that are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large, or by an exceptionally
stable, margin, and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.
AA
Bonds that are rated Aa are judged to be high quality by all standards.
Together with the Aaa group they comprise what are generally known as high
grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present that make the long-term risks appear somewhat larger than in Aaa
securities.
A
Bonds that are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
that suggest a susceptibility to impairment sometime in the future.
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BAA
Bonds that are rated Baa are considered as medium grade obligations; i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present, but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and, in
fact, have speculative characteristics as well.
BA
Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often, the protection of interest
and principal payments may be very moderate, and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B
Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
CAA
Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal
or interest.
CA
Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked
shortcomings.
C
Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
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Should no rating be assigned by Moody's, the reason may be one of the
following:
1. An application for rating was not received or accepted.
2. The issue or issuer belongs to a group of securities that are not rated
as a matter of policy.
3. There is a lack of essential data pertaining to the issue or issuer.
4. The issue was privately placed in which case the rating is not published
in Moody's publications.
Suspension or withdrawal may occur if new and material circumstances arise,
the effects of which preclude satisfactory analysis; if there is no longer
available reasonable up-to-date data to permit a judgment to be formed; if a
bond is called for redemption; or for other reasons.
Note: Those bonds in the Aa, A, Baa, Ba and B groups which Moody's believes
possess the strongest investment attributes are designated by the
symbols Aa1, A1, Baa1, Ba1 and B1.
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INVESTMENT ADVISER
Loomis, Sayles & Company, L.P.
One Financial Center
Boston, Massachusetts 02111
DISTRIBUTOR
Loomis Sayles Distributors, L.P.
One Financial Center
Boston, Massachusetts 02111
TRANSFER AND DIVIDEND PAYING AGENT
AND CUSTODIAN OF ASSETS
State Street Bank and Trust Company
Boston, Massachusetts 02102
SHAREHOLDER SERVICING AGENT FOR
STATE STREET BANK AND TRUST COMPANY
Boston Financial Data Services, Inc.
P.O. Box 8314
Boston, Massachusetts 02266
LEGAL COUNSEL
Ropes & Gray
One International Place
Boston, Massachusetts 02110
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
One Post Office Square
Boston, Massachusetts 02109
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