FEDERATED ADJUSTABLE RATE U.S. GOVERNMENT FUND, INC.
SUPPLEMENT TO PROSPECTUS DATED APRIL 30, 1999
At a Special Meeting of Shareholders to be held on June 30, 1999, shareholders
of the Fund will be asked to vote on the changes described below. If approved by
shareholders, these changes will take effect as of June 30, 1999. Shareholders
will be notified if any of these changes are not approved. Please keep this
supplement for your records.
Shareholders will be asked to consider the following proposals:
(1) To elect seven Directors.
(2) To ratify the selection of the Fund's independent
auditors.
(3) To make changes to the Fund's fundamental investment
policies:
(a) To amend the Fund's fundamental investment policy
regarding diversification;
(b) To amend the Fund's fundamental investment
policy regarding borrowing money and issuing
senior securities;
(c) To amend the Fund's fundamental investment policy
regarding investments in real estate;
(d) To amend the Fund's fundamental investment policy
regarding investments in commodities;
(e) To amend the Fund's fundamental investment policy regarding underwriting
securities;
(f) To amend the Fund's fundamental investment policy
regarding lending by the Fund;
(g) To amend the Fund's fundamental investment policy
regarding permissible investments;
(h) To amend, and to make non-fundamental, the
Fund's fundamental investment policy regarding
buying securities on margin;
(i) To amend, and to make non-fundamental, the Fund's
fundamental investment policy on pledging assets;
(j) To eliminate the Fund's fundamental investment
policy on investing in restricted securities,
and to amend, and to make non-fundamental, the
Fund's fundamental investment policy on
investing in illiquid securities;
(k) To amend, and to make non-fundamental, the
Fund's fundamental investment policy regarding
investing in other investment companies;
(l) To make non-fundamental the Fund's fundamental
investment policy regarding collateralized
mortgage obligations;
(m) To make non-fundamental the Fund's fundamental
investment policy regarding dollar roll transactions;
(n) To make non-fundamental the Fund's fundamental
investment policies regarding securities lending
activities;
(o) To make non-fundamental the Fund's fundamental
investment policies regarding repurchase
agreement transactions;
(p) To make non-fundamental the Fund's fundamental
investment policy regarding reverse repurchase
agreements;
(q) To make non-fundamental the Fund's fundamental
investment policy regarding investments in
stripped mortgage securities; and
(r) To amend, and to make non-fundamental, the
Fund's fundamental investment policy regarding
when-issued and delayed delivery transactions.
(4) To eliminate certain of the Fund's fundamental
investment policies:
(a) To remove the Fund's fundamental investment policy on
investing in oil, gas and minerals;
(b) To remove the Fund's fundamental investment
policy on investing in issuers whose securities
are owned by officers and Board members;
(c) To remove the Fund's fundamental investment
policy on investing in new issuers;
(d) To remove the Fund's fundamental investment
policy on selling securities short;
(e) To remove the Fund's fundamental investment policy regarding trading
portfolio securities; and
(f) To remove the Fund's fundamental investment policy regarding temporary
investments.
(5) To approve amendments to the Fund's Articles of
Incorporation to require the approval of a "1940 Act"
majority of shareholders in the event of the sale or
conveyance of the assets of the Fund to another fund
or corporation.
April 19, 1999
Cusip 314072109
G02619-02 (4/99)
