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<PAGE> PAGE 11
SIGNATURE JOSEPH SULLIVAN
TITLE TREASURER
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000890336
<NAME> HYPERION 1997 TERM TRUST INC.
<S> <C>
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<FISCAL-YEAR-END> MAY-31-1996
<PERIOD-END> MAY-31-1996
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<OTHER-ITEMS-LIABILITIES> 195320663
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<PER-SHARE-GAIN-APPREC> (1.06)
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</TABLE>
EXHIBIT 99.1 - PURSUANT TO ITEM 77.B
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, NY 10036
To the Board of Directors of
Hyperion 1997 Term Trust, Inc.
In planning and performing our audit of the financial statements of
Hyperion 1997 Term Trust, Inc. (the "Trust"), for the period ended May
31, 1996, we considered its internal control structure, including
procedures for safeguarding securities, in order to determine our
auditing procedures for the purposes of expressing our opinion on the
financial statements and to comply with the requirements of Form N-SAR,
and not to provide assurance on the internal control structure.
The management of the Trust is responsible for establishing and
maintaining an internal control structure. In fulfilling this
responsibility, estimates and judgments by management are required to
assess the expected benefits and related costs of internal control
structure policies and procedures. Two of the objectives of an internal
control structure are to provide management with reasonable, but not
absolute, assurance that assets are appropriately safeguarded against
loss from unauthorized use or disposition and that transactions are
executed in accordance with management's authorization and recorded
properly to permit preparation of financial statements in conformity
with generally accepted accounting principles.
Because of inherent limitations in any internal control structure,
errors or irregularities may occur and may not be detected. Also,
projection of any evaluation of the structure to future periods is
subject to the risk that it may become inadequate because of changes in
conditions or that the effectiveness of the design and operation may
deteriorate.
Our consideration of the internal control structure would not
necessarily disclose all matters in the internal control structure that
might be material weaknesses under standards established by the American
Institute of Certified Public Accountants. A material weakness is a
condition in which the design or operation of the specific internal
control structure elements does not reduce to a relatively low level the
risk that errors or irregularities in amounts that would be material in
relation to the financial statements being audited may occur and not be
detected within a timely period by employees in the normal course of
performing their assigned functions. However, we noted no matters
involving the internal control structure, including procedures for
safeguarding securities, that we consider to be material weaknesses as
defined above as of May 31, 1996.
This report is intended solely for the information and use of management
and the Securities and Exchange Commission.
July 18, 1996
EXHIBIT 99.2 - PURSUANT TO ITEM 77.E
The Trust, certain of its directors, and the Advisor have been named as
defendants in Karpus v. Hyperion Capital Management, Inc., et al., a purported
class action brought on behalf of the Trust's shareholders that was filed in
the United States District Court for the Southern District of New York on June
21, 1996 (File No. 96-CIV-4671). The Karpus complaint alleges that the Trust
failed to adhere to a fundamental policy set forth in its registration
statement by failing to continue to gradually reduce the duration of the Trust
portfolio beginning in mid-1995. The complaint claims that this failure was
reckless behavior on the part of the defendants. The complaint claims that
these actions constitute a violation of the Investment Company Act of 1940, as
amended, and are also breaches of fiduciary duty and trust. The complaint
seeks unspecified monetary damages, an accounting and other relief. The
defendants believe that the claims are without merit, and intend to defend the
claims vigorously. Whether or not the plaintiff prevails, however, the Trust
may be obligated to indemnify and advance litigation expenses to one or more
of the defendants under the terms and conditions of various indemnity
provisions of the Trust's Advisory Agreement and its Articles of
Incorporation, and the amounts of such indemnification and expenses could be
material. The ultimate outcome of this litigation is not presently
determinable.
