<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. __)
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Alliance Mortgage Strategy Trust, Inc.
- -----------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- -----------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
/X / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rule 14a-
6(i)(4) and 0-11.
(1) Title of each class of securities to which
transaction applies:
- -----------------------------------------------------------------
(2) Aggregate number of securities to which transaction
-applies:
- -----------------------------------------------------------------
(3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 0-11
(Set forth the amount on which the filing fee is
calculated and state how it was determined):
- -----------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- -----------------------------------------------------------------
(5) Total fee paid:
- -----------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided
by Exchange Act Rule 0-11(a)(2) and identify the filing
for which the offsetting fee was paid previously.
Identify the previous filing by registration statement
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number, or the Form or Schedule and the date of its
filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
00250224.AA5
<PAGE>
<PAGE> Preliminary
ALLIANCE MORTGAGE STRATEGY TRUST, INC.
1345 Avenue of the Americas
New York, New York 10105
January [ ], 1996
To the Stockholders of
Alliance Mortgage Strategy Trust, Inc. (the "Fund"):
The accompanying Notice of Special Meeting of Stockholders
and Proxy Statement present to the Fund's stockholders a proposal
to be considered at a Special Meeting of Stockholders to be held
on February 22, 1996, to approve a change in the Fund's
investment orientation from investing primarily in
mortgage-related securities to investing primarily in U.S.
Government securities, including U.S. Government mortgage-backed
securities. The proposal also involves changing the Fund's name
to "Alliance Limited Maturity Government Fund, Inc." As
discussed below, the Board of Directors recommends that you vote
to approve the proposal.
As you know, the Fund was designed by its investment adviser
Alliance Capital Management L.P. ("Alliance") to provide
investors with a higher yield than adjustable-rate mortgage
securities funds could offer with less net asset value volatility
than traditional fixed-rate mortgage securities funds. While
Alliance still believes that mortgage-related securities can play
an important role in helping the Fund achieve its yield
objectives, the difficult bond market environment of 1994 has
reduced the attractiveness of all mortgage funds, including your
Fund. Sales of the Fund's shares have slowed and Alliance
believes that unless the proposed changes are implemented, the
Fund's prospects for growth will remain limited. Your Board of
Directors has been concerned with the level of Fund sales,
because the growth of assets associated with new sales generally
benefits a fund and its stockholders by helping to reduce per
share Fund expenses.
Alliance also believes that the proposed changes will help
the Fund better pursue its objective of seeking the highest level
of current income consistent with low volatility of net asset
value by broadening the universe of investments available to the
Fund. If you approve the proposal, the Fund's fundamental
investment policy of investing at least 65% of its assets in
mortgage-related securities will be changed to one of investing
at least 65% of its assets in U.S. Government securities, whether
or not mortgage-related. These U.S. Government securities are
obligations issued or guaranteed by the U.S. Government, its
agencies, authorities or instrumentalities, and include
government guaranteed mortgage-backed securities.
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The universe of other securities in which the Fund may
potentially invest up to 35% of its assets will also be slightly
broadened. The most significant change in this area will be in
the minimum credit rating. The Fund's current investment
policies require these other securities all to be rated AAA or
the equivalent. Alliance believes that this restriction has at
times inhibited the Fund's ability to generate yield out of
proportion to the limited differences in credit and market risk
between AAA and AA securities. Accordingly, the proposal would
modify this policy to require the Fund's other investments to be
rated at least AA or the equivalent.
The proposal also limits the maturity of the Fund's portfolio
securities by requiring each such security to have either a
remaining maturity of not more than ten years or a duration not
exceeding that of a ten-year Treasury note. Alliance believes
that this requirement will help investors distinguish the Fund
from longer-term Government funds. In practice, the average
maturity of the Fund's portfolio securities has been and, for the
foreseeable future is expected to remain, substantially below
these limits.
Your Board of Directors urges you to read the enclosed Proxy
Statement carefully. We welcome your attendance at the Special
Meeting of Stockholders; but if you are unable to attend, please
sign, date and return the enclosed proxy card promptly, in order
to spare the Fund additional solicitation expenses.
Sincerely,
JOHN D. CARIFA
Chairman of the Board
2
00250224.AA5
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<PAGE> Preliminary
Alliance Capital [Logo] Alliance Mortgage Strategy
Trust, Inc.
________________________________________________________________
1345 Avenue of the Americas, New York York 10105
Toll Free (800) 221-5672
________________________________________________________________
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
February 22, 1996
To the Stockholders of Alliance Mortgage
Strategy Trust, Inc.:
Notice is hereby given that a Special Meeting of
Stockholders (the "Meeting") of Alliance Mortgage Strategy
Trust, Inc. (the "Fund") will be held at the offices of the
Fund, 1345 Avenue of the Americas, 33rd Floor, New York, New
York 10105, on February 22, 1996 at 11:00 a.m., for the
following purposes, which are more fully described in the
accompanying Proxy Statement dated January [ ], 1996.
1. To approve a proposal to change the Fund's
investment emphasis from mortgage-related securities to U.S.
Government securities, broaden the scope of investments
available to the Fund and rename the Fund "Alliance Limited
Maturity Government Fund, Inc." This proposal involves changes
in the Fund's investment objective and certain of its
fundamental and non-fundamental investment policies.
2. To transact such other business as may properly
come before the Meeting.
The Board of Directors has fixed the close of business
on November 30, 1995 as the record date for the determination
of stockholders entitled to notice of, and to vote at, the
Meeting and any adjournment thereof. The enclosed proxy is
being solicited on behalf of the Board of Directors.
By order of the Board of Directors,
EDMUND P. BERGAN, JR.
Secretary
New York, New York
January [ ], 1996
<PAGE>
<PAGE>
_____________________________________________________________
YOUR VOTE IS IMPORTANT
Please indicate your voting instructions on the
enclosed Proxy Card, sign and date it, and return it in the
envelope provided, which needs no postage if mailed in the
United States. In order to save the Fund any additional
expense of further solicitation, please mail your proxy
promptly.
_____________________________________________________________
(R) This registered mark used under license from the owner,
Alliance Capital Management L.P.
<PAGE>
<PAGE>
Preliminary
PROXY STATEMENT
ALLIANCE MORTGAGE STRATEGY TRUST, INC.
1345 Avenue of the Americas
New York, New York 10105
____________________
SPECIAL MEETING OF STOCKHOLDERS
February 22, 1996
___________________
INTRODUCTION
This Proxy Statement is furnished in connection with the
solicitation of proxies on behalf of the Board of Directors of
Alliance Mortgage Strategy Trust, Inc., a Maryland corporation
(the "Fund"), to be voted at a Special Meeting of Stockholders of
the Fund (the "Meeting"), to be held at the offices of the Fund,
1345 Avenue of the Americas, New York, New York 10105, on
February 22, 1996 at 11:00 a.m. The solicitation will be by mail
and the cost will be borne by the Fund. The Notice of Meeting,
Proxy Statement and Proxy Card are being mailed to stockholders
on or about January [ ], 1996.
The Board of Directors of the Fund has fixed the close
of business on November 30, 1995 as the record date for the
determination of stockholders entitled to notice of, and to vote
at, the Meeting and at any adjournment thereof. The outstanding
voting shares of the Fund as of November 30, 1995 consisted of
[______] shares of Class A common stock, [_______] shares of
Class B common stock and [_________] shares of Class C common
stock, each share being entitled to one vote. All properly
executed proxies received prior to the Meeting will be voted at
the Meeting in accordance with the instructions marked thereon or
otherwise provided therein. Accordingly, unless instructions to
the contrary are marked, proxies will be voted for the approval
of the Proposal set forth in the Notice of the Meeting. Any
stockholder may revoke that stockholder's proxy at any time prior
to exercise thereof by giving written notice to the Secretary of
the Fund at the offices of the Fund at 1345 Avenue of the
Americas, New York, New York 10105, by signing another proxy of a
later date or by personally voting at the Meeting.
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<PAGE>
A quorum for the Meeting will consist of a majority of
the shares outstanding and entitled to vote. In the event that a
quorum is not represented at the Meeting or, even if a quorum is
represented, in the event that sufficient votes in favor of the
Proposal are not received by February 22, 1996, the persons named
as proxies may propose and vote for one or more adjournments of
the Meeting with respect to the Fund or with respect to the
Proposal with no other notice than announcement at the Meeting,
and further solicitation of proxies with respect to the Proposal
may be made. Shares represented by proxies indicating a vote
against the Proposal will be voted against adjournment of the
meeting.
[Set forth below is certain information as to all persons who
were beneficial holders of 5% or more of the outstanding shares
of any class of common stock of the Fund as of the close of
business on November 30, 1995]
As of November 30, 1995, the Directors and officers of
the Fund as a group owned less than 1% of the Fund's outstanding
shares of any class of common stock of the Fund.
PROPOSAL
TO CHANGE THE FUND'S INVESTMENT EMPHASIS FROM MORTGAGE-
RELATED SECURITIES TO U.S. GOVERNMENT SECURITIES, BROADEN THE
SCOPE OF INVESTMENTS AVAILABLE TO THE FUND AND RENAME THE FUND
"ALLIANCE LIMITED MATURITY GOVERNMENT FUND, INC." THIS PROPOSAL
INVOLVES CHANGES IN THE FUND'S INVESTMENT OBJECTIVE AND CERTAIN
OF ITS FUNDAMENTAL AND NON-FUNDAMENTAL INVESTMENT POLICIES.
Introduction
The Board of Directors of the Fund has approved, and
recommended to the Fund's stockholders for their approval, a
proposal to modify the investment emphasis of the Fund and to
broaden the scope of investments available to the Fund. If the
stockholders approve the proposal, the Fund would invest
primarily in U.S. Government securities (as defined below),
including mortgage-related securities, rather than invest
primarily in mortgage-related securities as is currently the case
and would change its name to "Alliance Limited Maturity
Government Fund, Inc." The proposal was initiated by Alliance
Capital Management L.P., the Fund's investment adviser (the
"Adviser"), and unanimously approved at the November 28, 1995
Special Meeting of the Board of Directors.
2
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Reasons for the Proposed Changes
At the Special Meeting, the Adviser noted to the Board
of Directors that the Fund is an investment vehicle with an
investment objective of seeking the highest level of current
income, consistent with low volatility of net asset value,
available from a portfolio of mortgage-related securities of the
highest quality. The Fund, as a fundamental policy, normally
invests at least 65% of the value of its total assets in
mortgage-related securities. The Adviser explained that the Fund
was designed to provide investors with a higher yield than
adjustable-rate mortgage securities funds could offer, but with
less volatility of net asset value than that experienced by more
traditional fixed-rate mortgage securities funds. The Adviser
explained further that, at the time the Fund commenced
operations, the Adviser believed that the Fund could attract
investors by offering mortgage securities fund yields to
relatively conservative investors seeking greater stability of
net asset value than a typical mortgage securities fund might
provide.
The Adviser stated its belief that as a consequence of
the adverse bond market of 1994 and changes in the market for
mortgage-related securities that have occurred during 1994 and
1995, the Fund has experienced difficulties producing a yield at
the higher end of the mortgage fund band. The Adviser also noted
that the Fund's policy requiring investment solely in instruments
of the highest credit quality inhibited the Fund's ability to
generate yield in comparison to the increased yield available
from a portfolio only moderately different from the Fund's
portfolio in terms of overall credit and interest rate risk.
To deal with these concerns, the Adviser recommended to
the Board of Directors approval of the proposal to change the
investment emphasis of the Fund and to expand the scope of
investments available to the Fund. The Adviser expressed to the
Board its belief that a change from a portfolio consisting
primarily of mortgage-related securities to a portfolio
consisting primarily of obligations issued or guaranteed by the
United States Government, its agencies, authorities or
instrumentalities, ("U.S. Government securities"), including
mortgage-related securities, and repurchase agreements relating
to U.S. Government securities, would allow the Fund additional
flexibility in seeking a high level of current income consistent
with low volatility of net asset value while enhancing the
marketability of the Fund's shares.
The Adviser also recommended that, in keeping with the
new name, the Fund limit the maturity of the securities in its
portfolio. Under the Proposal, at all times each security held
by the Fund would have either a final maturity of not more than
3
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ten years or a duration not exceeding that of a ten-year Treasury
note. Duration is a measure that relates the price volatility of
a security to changes in interest rates. The duration of a debt
security is the weighted average term to maturity, expressed in
years, of the present value of all future cash flows, including
coupon payments and principal repayments. Thus, by definition,
duration is always less than or equal to full maturity. At the
Special Meeting the Adviser noted that the Fund's current average
duration is approximately 1.6 years, and that the Adviser's
present intention is to lengthen it to approximately 3 years.
The Adviser stated its belief that moderately lengthening the
average duration of the Fund's portfolio would enhance yield
opportunities and be a reasonable compromise between yield and
volatility concerns.
The Adviser recommended further that the Fund's name be
changed to "Alliance Limited Maturity Government Fund, Inc.",
indicating to the Board of Directors in this regard that the new
name would better reflect the principal components of the Fund's
revised investment objective and policies than the current name.
The Adviser indicated its belief that the proposed changes
described herein are not a significant departure from the Fund's
current investment orientation. Further, the Adviser noted that
the Fund's new investment emphasis would not be intended to
radically alter the composition of the Fund's investment
portfolio, but would allow the Fund to take advantage of the
additional stability that might be offered by investment in
non-mortgage related U.S. Government securities while still
retaining the ability to invest in mortgage-related securities.
In reliance upon the Adviser's presentation, and following a
meeting among the disinterested Directors and their independent
counsel, the Board unanimously approved, and recommended to the
stockholders for their approval, the changes described in this
Proxy Statement.
Current Investment Objective and Policies
The Fund's investment objective is to seek the highest
level of current income, consistent with low volatility of net
asset value, that is available from a portfolio of mortgage-
related securities of the highest quality. The Fund's investment
objective is fundamental and therefore cannot be changed without
stockholder approval. As an additional fundamental policy,
except when the Fund assumes a temporary defensive position, the
Fund has at least 65% of the value of its total assets invested
in mortgage-related securities. The Fund purchases only
mortgage-related securities that are U.S. Government securities,
or are rated Aaa by Moody's Investors Service, Inc. ("Moody's")
or AAA by Standard & Poor's Ratings Services ("S&P"), Duff &
Phelps Credit Rating Co. ("Duff & Phelps"), or Fitch Investors
Service, Inc. ("Fitch"), or, if not rated, are determined by the
4
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Adviser to be of equivalent investment quality ("triple-A"
securities).
As more fully described in the Fund's prospectus and
Statement of Additional Information , the Fund is also permitted
to invest up to 35% of the value of its total assets in (i)
triple-A asset-backed securities, (ii) non-mortgage-related U.S.
Government securities, including certain zero coupon Treasury
securities, (iii) "zero coupon" Treasury securities issued by
private corporate issuers, (iv) qualifying bank deposits, (v)
prime commercial paper or, if not rated, issued by companies
which have outstanding triple-A debt issues and (vi) triple-A
debt securities secured by mortgages on commercial real estate or
residential rental properties. The Fund is also permitted to
invest up to 15% of the value of its total assets in triple-A
mortgage-related securities denominated in U.S. Dollars or in
foreign currencies and issued or guaranteed by foreign
governments or issued by foreign non-governmental issuers.
Proposed New Investment Objective and Policies
If the Proposal is approved by the stockholders, the
Fund would change its investment objective to eliminate the
reference to investing in mortgage-related securities of the
highest quality. The Fund's investment objective would otherwise
remain unchanged. Accordingly, the Fund's new investment
objective would be to seek the highest level of current income,
consistent with low volatility of net asset value. To enable the
Fund to achieve its proposed investment objective, the Adviser
has recommended, and the Board of Directors has approved and
recommended to stockholders, a change in the Fund's fundamental
policy of investing, under normal circumstances, at least 65% of
the value of its total assets in mortgage-related securities. If
approved by the stockholders, the Fund would adopt a fundamental
investment policy of investing, under normal circumstances, at
least 65% of the value of its total assets in U.S. Government
securities, including mortgage-related securities, and repurchase
agreements relating to U.S. Government securities.
In addition to the proposed changes to the Fund's
investment objective and the fundamental policy described above,
the Adviser recommended that, with respect to the up to 35% of
the Fund's total assets not required to be invested in accordance
with the proposed new fundamental policy described above, the
Fund be provided with the flexibility to invest in debt
securities that, while not of triple-A quality, are of high
quality, as defined below, including high quality corporate debt
securities. Thus, it was proposed that the Fund be permitted to
invest up to 35% of its total assets in (i) asset-backed
securities (including mortgage-related securities that are not
U.S. Government securities) rated at least Aa by Moody's or AA by
5
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S&P, Duff & Phelps or Fitch or, if not rated, of equivalent
investment quality as determined by the Adviser ("high quality"
securities); (ii) commercial paper rated at least Prime-2 by
Moody's or A-2 by S&P, Duff 2 by Duff & Phelps or Fitch 2 by
Fitch or, if not rated, issued by companies which have
outstanding high quality debt issues ("higher quality" commercial
paper); and (iii) high quality debt securities of corporate
issuers.
The Adviser also recommended that, with respect to the
up to 35% of the Fund's total assets not subject to the proposed
new fundamental policy, the Fund be permitted to invest in
certificates of deposit, bankers' acceptances and interest
bearing savings deposits of domestic and foreign banks that have
total assets of more than $1 billion, instead of limiting such
investments, as is currently the case, to deposits in and
instruments issued by domestic banks that have total assets of
more than $1 billion and are members of the Federal Deposit
Insurance Corporation. The Adviser further recommended that the
Fund be permitted to invest up to 15% of the value of its total
assets in high quality foreign debt securities, instead of
limiting the Fund's investments in foreign securities to triple-A
mortgage-related securities. The Adviser believes the proposed
changes to the Fund's non-fundamental investment policies
described above will enhance the Fund's ability to increase
income, with only a moderate and manageable increase in the risk
of net asset volatility of the Fund.
The Fund's proposed new investment objective and its
policy of investing, under normal circumstances, at least 65% of
the value of its total assets in U.S. Government securities,
including mortgage-related securities, and repurchase agreements
relating to U.S. Government securities, would be fundamental and
therefore could not be changed without stockholder approval. For
temporary defensive purposes, the Fund would be permitted to vary
from its investment policies during periods in which the Adviser
believes that business or financial conditions warrant and invest
without limit in high-quality debt securities or higher quality
commercial paper or hold its assets in cash equivalents.
If the Proposal is approved by the stockholders, the
foregoing changes to the Fund's name and its investment objective
and policies would be implemented as soon thereafter as
practicable. It is not expected that the Fund would incur
significant transaction costs in order to make its asset
composition consistent with the new investment objective and
policies.
The Board of Directors of the Fund recommends that the
stockholders of the Fund vote FOR the proposal to change the
Fund's investment emphasis from mortgage-related securities to
6
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government securities (including mortgage-related government
securities) and to broaden the scope of investments available to
the Fund, including changes in the Fund's investment objective
and certain of its fundamental and non-fundamental investment
policies necessary to implement the foregoing, and to rename the
Fund "Alliance Limited Maturity Government Fund, Inc."
REQUIRED VOTE
Under the Investment Company Act of 1940 (the "Act"),
approval of the Proposal requires the affirmative vote of the
lesser of (i) 67% or more of the voting securities of the Fund
present or represented at any meeting, if the holders of more
than 50% of the outstanding voting securities of the Fund are
present or represented by proxy, and (ii) more than 50% of the
outstanding voting securities of the Fund. The only voting
securities of the Fund are its outstanding shares of Class A,
Class B and Class C common stock. If the Proposal is approved by
the stockholders at the Meeting, the Fund will be renamed
"Alliance Limited Maturity Government Fund, Inc.," the Fund's
investment objective will change to one of seeking the highest
level of current income consistent with low volatility of net
asset value, the Fund will have a fundamental investment policy
of investing, under normal circumstances, at least 65% of the
value of its total assets in U.S. Government securities,
including mortgage-related securities, and repurchase agreements
related to U.S. Government securities and certain of the Fund's
non-fundamental investment policies will be revised in the manner
described above.
SUBMISSION OF PROPOSALS FOR THE NEXT
MEETING OF STOCKHOLDERS
Under the current By-Laws of the Fund, annual meetings
of stockholders are required to be held only when necessary under
the Act to elect Directors (for example, when fewer than a
majority of the Fund's Directors have been selected by the
stockholders). It is therefore likely that stockholder meetings
will not be held on an annual basis. A stockholder proposal
intended to be presented at any meeting hereafter called must be
received by the Fund within a reasonable time before the
solicitation relating thereto is made in order to be included in
the proxy statement and form of proxy card related to such
meeting. The submission by a stockholder of a proposal for
inclusion in the proxy statement does not guarantee that it will
be included. Stockholder proposals are subject to certain
regulations under the federal securities laws.
7
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OTHER MATTERS
Management of the Fund does not know of any matters to
be presented at the Meeting other than those mentioned in this
Proxy Statement. If any other matters properly come before the
Meeting, the shares represented by proxies will be voted with
respect thereto in accordance with the best judgment of the
person or persons voting the proxies.
By Order of the Board of Directors,
EDMUND P. BERGAN, JR.
Secretary
January [ ], 1996
New York, New York
8
00250224.AA5
<PAGE>
<PAGE>
TABLE OF CONTENTS Page ALLIANCE MORTGAGE STRATEGY
______________________________ TRUST, INC.
Introduction..............
Proposal: To Change The
Fund's Investment
Emphasis from Mortgage- _____________________________
Related Securities to
U.S. Government Alliance Capital [Logo]
Securities, Broaden the
Scope of Investments Alliance Capital Management
Available to the Fund
and Rename the Fund L.P.
"Alliance Limited _____________________________
Maturity Government
Fund, Inc."............. NOTICE OF SPECIAL MEETING
Required Vote............. OF STOCKHOLDERS AND
Submission of Proposals PROXY STATEMENT
for the Next Meeting of February 22, 1996
Stockholders............
Other Matters.............
00250224.AA5
<PAGE>
<PAGE> Preliminary
APPENDIX
PROXY PROXY
ALLIANCE MORTGAGE STRATEGY TRUST, INC.
INSTRUCTIONS TO THE STOCKHOLDERS OF ALLIANCE
MORTGAGE STRATEGY TRUST, INC.
IN CONNECTION WITH THE SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON FEBRUARY 22, 1996.
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF ALLIANCE MORTGAGE
STRATEGY TRUST, INC.
The undersigned hereby instructs Duncan McCuaig and Carol H.
Rappa to vote all shares of the Common Stock of Alliance Mortgage
Strategy Trust, Inc. (the "Fund") registered in the name of the
undersigned at the Special Meeting of Stockholders of the Fund to
be held at [11:00 a.m.], Eastern Standard Time, on February ,
1996 at the offices of the Fund, 1345 Avenue of the Americas,
[33rd] Floor, New York, New York, 10105, and at all adjournments
thereof. The undersigned hereby acknowledges receipt of the
Notice of Special Meeting and accompanying Proxy Statement and
hereby instructs said proxies to vote said shares as indicated
hereon.
BY SIGNING AND DATING THIS CARD, YOU AUTHORIZE THE PROXIES TO
VOTE THE PROPOSAL AS MARKED, OR, IF NOT MARKED, TO VOTE "FOR" THE
PROPOSAL AND TO USE THEIR DISCRETION TO VOTE ANY OTHER MATTER AS
MAY PROPERLY COME BEFORE THE MEETING.
PLEASE VOTE AND SIGN ON OTHER SIDE AND
RETURN PROMPTLY IN ENCLOSED ENVELOPE.
Please sign this proxy exactly as your name appears on the books
of the Fund. Joint owners should each sign personally. Trustees
and other fiduciaries should indicate the capacity in which they
sign, and where more than one name appears, a majority must sign.
If a corporation, this signature should be that of an authorized
officer who should state his or her title.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
___________________________ ______________________________
___________________________ ______________________________
PLEASE SIGN AND DATE THIS PROXY CARD ON THE REVERSE SIDE AND
RETURN IT IN THE ENCLOSED ENVELOPE.
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<PAGE>
/X/ PLEASE MARK VOTES AS IN THIS EXAMPLE
To change the Fund's investment
emphasis from mortgage-related
securities to U.S. Government
securities, broaden the scope of
investments available to the
Fund and rename the Fund "Alliance
Limited Maturity Government Fund, Inc." For Against Abstain
This proposal involves changes in the / / / / / /
Fund's investment objective and certain
of its fundamental and non-fundamental
investment policies.
Please be sure to sign and date this Proxy Card. Date
Shareholder sign here Co-owner sign here
Mark box at right if comments or address change / /
have been noted on the reverse side of the card.
RECORD DATE SHARES:
00250224.AA5
<PAGE>
