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Prudential Adjustable Rate Securities Fund, Inc.
Supplement dated May 18, 1995
to Prospectus dated May 1, 1994
The Board of Directors of Prudential Adjustable Rate Securities Fund, Inc.
(Adjustable Rate Fund) has recently approved a proposal to exchange the assets
and liabilities of the Adjustable Rate Fund for shares of Prudential Government
Securities Trust-Intermediate Term Series (Intermediate Series). Class A and
Class B shares of Adjustable Rate Fund would be exchanged at net asset value for
shares of equivalent value of Intermediate Series.
The transfer has been approved by Intermediate Series' Trustees and
Adjustable Rate Fund's Directors, and is subject to approval by Adjustable Rate
Fund's shareholders. It is anticipated that a proxy statement/prospectus will be
mailed to Adjustable Rate Fund's shareholders in early July 1995.
Under the terms of the proposal, shareholders of Adjustable Rate Fund would
become shareholders of Intermediate Series. No sales charges would be imposed on
the proposed transfer. Adjustable Rate Fund anticipates obtaining an opinion of
its counsel that no gain or loss for federal income tax purposes would be
recognized by shareholders of Adjustable Rate Fund as a result of the proposed
transaction.
Effective immediately, Adjustable Rate Fund will no longer accept purchase
orders for shares of either class, except for purchases by certain Retirement
and Employee Plans (excluding IRA accounts). Existing shareholders may continue
to acquire shares through dividend reinvestment and the current exchange and
redemption privileges will remain in effect until the transaction is
consummated.
Intermediate Series' investment objective is to achieve a high level of
income consistent with providing reasonable safety. Barbara L. Kenworthy, a
managing director and senior portfolio manager of Prudential Investment
Advisors, a unit of PIC, is the portfolio manager of both the Adjustable Rate
Fund and the Intermediate Series. She is responsible for the day to day
management of the portfolios. Ms. Kenworthy succeeded David Graham in managing
the portfolios in May 1995, when Mr. Graham resigned from PIC. Ms. Kenworthy
joined PIC in July 1994, having previously been employed by The Dreyfus
Corporation (from June 1985 to June 1994) where she served as president and
portfolio manager for several Dreyfus fixed-income funds. Ms. Kenworthy also
serves as the portfolio manager of other investment companies advised by PIC.
MF156C-1
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