FORM N-SAR
SEMI-ANNUAL REPORT
FOR REGISTERED INVESTMENT COMPANIES
Registrant Name HYPERION 2005 TERM TRUST, INC.
File Number 811-7386
Registrant CIK Number: 0000895415
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Header Screen
Report as of the end of semiannual period: / / (a)
or fiscal year: 12/31/99 (b)
Is this a transition report? (Y or N): N
Is this form being completed by the registrant? (Y or N): Y
Is this an amendment to a previous filing? (Y or N): N
Is this a change to a previous filing? (Y or N): N
1.A) Registrant Name: HYPERION 2005 TERM TRUST, INC.
B) File Number: 811-7386
C) Telephone Number: 2125498400
2.A) Street: ONE LIBERTY PLAZA,165 BROADWAY,36 FLOOR
B) City: NEW YORK C) State: NY D) Zip Code: 10006 Zip Ext.: 1404
E) Foreign Country: Foreign Postal Code:
3. Is this the first filing on this form by the Registrant?(Y or N) ----- N
4. Is this the last filing on this form by the Registrant?(Y or N) ------ N
5. Is Registrant a small business investment company (SBIC)?(Y or N) ---- N
6. Is Registrant a unit investment trust (UIT)?(Y or N) ----------------- N
7.A) Is Registrant a series or multiple portfolio company?(Y or N) ----- N
B) How many separate series or portfolios did Registrant have
at the end of the period? ----------------------------------------- 0
SCREEN NUMBER: 1
7.C) List the name of each series or portfolio and give a consecutive number
to each series or portfolio starting with the number 1. USE THIS SAME
NUMERICAL DESIGNATION FOR EACH SERIES OR PORTFOLIO IN THE SERIES IN-
FORMATION BLOCK IN THE TOP RIGHT CORNER OF THE SCREENS SUBMITTED IN
THIS FILING AND IN ALL SUBSEQUENT FILINGS ON THIS FORM. THIS INFOR-
MATION IS REQUIRED EACH TIME THE FORM IS FILED. Is this the
Series last filing
Number Series Name for this series?
(Y or N)
1
2
3
4
5
6
7
8
9
10
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SCREEN NUMBER: 2
This page is being
INVESTMENT ADVISER/SUB-ADVISER filed for series 0.
8.A) Adviser Name (if any): HYPERION CAPITAL MANAGEMENT, INC.
B) Is this an Adviser or Sub-adviser? (A/S): A
C) File Number: 801-34605
D) City: NEW YORK State: NY Zip Code: 10006 Zip Ext.: 1404
Foreign Country: Foreign Postal Code:
8.A) Adviser Name (if any):
B) Is this an Adviser or Sub-adviser? (A/S):
C) File Number: 801-
D) City: State: Zip Code: Zip Ext.:
Foreign Country: Foreign Postal Code:
8.A) Adviser Name (if any):
B) Is this an Adviser or Sub-adviser? (A/S):
C) File Number: 801-
D) City: State: Zip Code: Zip Ext.:
Foreign Country: Foreign Postal Code:
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SCREEN NUMBER: 3
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INVESTMENT ADVISER/SUB-ADVISER filed for series 0.
8.A) Adviser Name (if any):
B) Is this an Adviser or Sub-adviser? (A/S):
C) File Number: 801-
D) City: State: Zip Code: Zip Ext.:
Foreign Country: Foreign Postal Code:
8.A) Adviser Name (if any):
B) Is this an Adviser or Sub-adviser? (A/S):
C) File Number: 801-
D) City: State: Zip Code: Zip Ext.:
Foreign Country: Foreign Postal Code:
8.A) Adviser Name (if any):
B) Is this an Adviser or Sub-adviser? (A/S):
C) File Number: 801-
D) City: State: Zip Code: Zip Ext.:
Foreign Country: Foreign Postal Code:
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SCREEN NUMBER: 3
This page is being
ADMINISTRATOR filed for series 0.
10.A) Administrator Name (if any):HYPERION CAPITAL MANAGEMENT, INC.
B) File Number (if any): 801-34605
C) City: NEW YORK State: NY Zip Code: 10006 Zip Ext.: 1404
Foreign Country: Foreign Postal Code:
10.A) Administrator Name (if any):
B) File Number (if any):
C) City: State: Zip Code: Zip Ext.:
Foreign Country: Foreign Postal Code:
10.A) Administrator Name (if any):
B) File Number (if any):
C) City: State: Zip Code: Zip Ext.:
Foreign Country: Foreign Postal Code:
10.A) Administrator Name (if any):
B) File Number (if any):
C) City: State: Zip Code: Zip Ext.:
Foreign Country: Foreign Postal Code:
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SCREEN NUMBER: 4
This page is being
ADMINISTRATOR filed for series 0.
10.A) Administrator Name (if any):
B) File Number (if any):
C) City: State: Zip Code: Zip Ext.:
Foreign Country: Foreign Postal Code:
10.A) Administrator Name (if any):
B) File Number (if any):
C) City: State: Zip Code: Zip Ext.:
Foreign Country: Foreign Postal Code:
10.A) Administrator Name (if any):
B) File Number (if any):
C) City: State: Zip Code: Zip Ext.:
Foreign Country: Foreign Postal Code:
10.A) Administrator Name (if any):
B) File Number (if any):
C) City: State: Zip Code: Zip Ext.:
Foreign Country: Foreign Postal Code:
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SCREEN NUMBER: 4
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PRINCIPAL UNDERWRITER filed for series 0.
11.A) Underwriter Name (if any): PRUDENTIAL SECURITIES INCORPORATED
B) File Number: 8-27154
C) City: NEW YORK State: NY Zip Code: 10292 Zip Ext.:
Foreign Country: Foreign Postal Code:
11.A) Underwriter Name (if any): CIBC OPPENHEIMER CORP.
B) File Number: 8-18333
C) City: NEW YORK State: NY Zip Code: 10281 Zip Ext.:
Foreign Country: Foreign Postal Code:
11.A) Underwriter Name (if any): KEMPER SECURITIES, INC.
B) File Number: 8-37180
C) City: CHICAGO State: IL Zip Code: 60606 Zip Ext.:
Foreign Country: Foreign Postal Code:
11.A) Underwriter Name (if any):
B) File Number: 8-
C) City: State: Zip Code: Zip Ext.:
Foreign Country: Foreign Postal Code:
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SCREEN NUMBER: 5
This page is being
PRINCIPAL UNDERWRITER filed for series 0.
11.A) Underwriter Name (if any): SALOMON SMITH BARNEY, INC.
B) File Number: 8-8177
C) City: NEW YORK State: NY Zip Code: 10019 Zip Ext.:
Foreign Country: Foreign Postal Code:
11.A) Underwriter Name (if any): ADVEST, INC.
B) File Number: 8-21409
C) City: HARTFORD State: CT Zip Code: 06103 Zip Ext.:
Foreign Country: Foreign Postal Code:
11.A) Underwriter Name (if any): CROWELL, WEEDEN & CO.
B) File Number: 8-3710
C) City: LOS ANGELES State: CA Zip Code: 90017 Zip Ext.:
Foreign Country: Foreign Postal Code:
11.A) Underwriter Name (if any): DAIN BOSWORTH INCORPORATED
B) File Number: 8-3259
C) City: MINNEAPOLIS State: MN Zip Code: 55402 Zip Ext.:
Foreign Country: Foreign Postal Code:
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SCREEN NUMBER: 5
This page is being
PRINCIPAL UNDERWRITER filed for series 0.
11.A) Underwriter Name (if any): LEGG MASON WOOD WALKER INCORPORATED
B) File Number: 8-15939
C) City: BALTIMORE State: MD Zip Code: 21202 Zip Ext.:
Foreign Country: Foreign Postal Code:
11.A) Underwriter Name (if any): PAINE WEBBER INCORPORATED
B) File Number: 8-16267
C) City: NEW YORK State: NY Zip Code: 10019 Zip Ext.:
Foreign Country: Foreign Postal Code:
11.A) Underwriter Name (if any):
B) File Number: 8-
C) City: State: Zip Code: Zip Ext.:
Foreign Country: Foreign Postal Code:
11.A) Underwriter Name (if any):
B) File Number: 8-
C) City: State: Zip Code: Zip Ext.:
Foreign Country: Foreign Postal Code:
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SCREEN NUMBER: 5
This page is being
PRINCIPAL UNDERWRITER filed for series 0.
11.A) Underwriter Name (if any):
B) File Number: 8-
C) City: State: Zip Code: Zip Ext.:
Foreign Country: Foreign Postal Code:
11.A) Underwriter Name (if any):
B) File Number: 8-
C) City: State: Zip Code: Zip Ext.:
Foreign Country: Foreign Postal Code:
11.A) Underwriter Name (if any):
B) File Number: 8-
C) City: State: Zip Code: Zip Ext.:
Foreign Country: Foreign Postal Code:
11.A) Underwriter Name (if any):
B) File Number: 8-
C) City: State: Zip Code: Zip Ext.:
Foreign Country: Foreign Postal Code:
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SCREEN NUMBER: 5
This page is being
SHAREHOLDER SERVICING AGENT filed for series 0.
12.A) Agent Name (if any): BOSTON EQUISERVE, LP
B) File Number (if any): 85-00
C) City: CANTON State: MA Zip Code: 02021 Zip Ext.:
12.A) Agent Name (if any):
B) File Number (if any):
C) City: State: Zip Code: Zip Ext.:
12.A) Agent Name (if any):
B) File Number (if any):
C) City: State: Zip Code: Zip Ext.:
12.A) Agent Name (if any):
B) File Number (if any):
C) City: State: Zip Code: Zip Ext.:
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SCREEN NUMBER: 6
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SHAREHOLDER SERVICING AGENT filed for series 0.
12.A) Agent Name (if any):
B) File Number (if any):
C) City: State: Zip Code: Zip Ext.:
12.A) Agent Name (if any):
B) File Number (if any):
C) City: State: Zip Code: Zip Ext.:
12.A) Agent Name (if any):
B) File Number (if any):
C) City: State: Zip Code: Zip Ext.:
12.A) Agent Name (if any):
B) File Number (if any):
C) City: State: Zip Code: Zip Ext.:
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SCREEN NUMBER: 6
This page is being
INDEPENDENT PUBLIC ACCOUNTANT filed for series 0.
13.A) Accountant Name: PRICEWATERHOUSECOOPERS LLP
B) City: NEW YORK State: NY Zip Code: 10036 Zip Ext.:
Foreign Country: Foreign Postal Code:
13.A) Accountant Name:
B) City: State: Zip Code: Zip Ext.:
Foreign Country: Foreign Postal Code:
13.A) Accountant Name:
B) City: State: Zip Code: Zip Ext.:
Foreign Country: Foreign Postal Code:
13.A) Accountant Name:
B) City: State: Zip Code: Zip Ext.:
Foreign Country: Foreign Postal Code:
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SCREEN NUMBER: 7
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INDEPENDENT PUBLIC ACCOUNTANT filed for series 0.
13.A) Accountant Name:
B) City: State: Zip Code: Zip Ext.:
Foreign Country: Foreign Postal Code:
13.A) Accountant Name:
B) City: State: Zip Code: Zip Ext.:
Foreign Country: Foreign Postal Code:
13.A) Accountant Name:
B) City: State: Zip Code: Zip Ext.:
Foreign Country: Foreign Postal Code:
13.A) Accountant Name:
B) City: State: Zip Code: Zip Ext.:
Foreign Country: Foreign Postal Code:
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SCREEN NUMBER: 7
This page is being
AFFILIATED BROKER/DEALER filed for series 0.
14.A) Broker/Dealer Name (if any):RANIERI & CO., INC.
B) File Number: 8-39678
14.A) Broker/Dealer Name (if any):
B) File Number: 8-
14.A) Broker/Dealer Name (if any):
B) File Number: 8-
14.A) Broker/Dealer Name (if any):
B) File Number: 8-
14.A) Broker/Dealer Name (if any):
B) File Number: 8-
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SCREEN NUMBER: 8
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AFFILIATED BROKER/DEALER filed for series 0.
14.A) Broker/Dealer Name (if any):
B) File Number: 8-
14.A) Broker/Dealer Name (if any):
B) File Number: 8-
14.A) Broker/Dealer Name (if any):
B) File Number: 8-
14.A) Broker/Dealer Name (if any):
B) File Number: 8-
14.A) Broker/Dealer Name (if any):
B) File Number: 8-
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SCREEN NUMBER: 8
This page is being
CUSTODIAN/SUB-CUSTODIAN filed for series 0.
15.A) Custodian/Sub-custodian: STATE STREET BANK & TRUST COMPANY
B) Is this a Custodian or Sub-custodian? (C/S): C
C) City: BOSTON State: MA Zip Code: 02116 Zip Ext.:
D) Foreign Country: Foreign Postal Code:
E) Mark ONE of the following with an 'X':
TYPE OF CUSTODY
Member Nat'l Foreign Insurance Co.
Bank Sec. Exchg. Self Custodian Sponsor
Sec.17(f)(1) Rule 17f-1 Rule 17f-2 Rule 17f-5 Rule 26a-2 Other
------------ ------------ ---------- ---------- ------------- -----
X
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SCREEN NUMBER: 9
This page is being
CUSTODIAN/SUB-CUSTODIAN filed for series 0.
15.A) Custodian/Sub-custodian:
B) Is this a Custodian or Sub-custodian? (C/S):
C) City: State: Zip Code: Zip Ext.:
D) Foreign Country: Foreign Postal Code:
E) Mark ONE of the following with an 'X':
TYPE OF CUSTODY
Member Nat'l Foreign Insurance Co.
Bank Sec. Exchg. Self Custodian Sponsor
Sec.17(f)(1) Rule 17f-1 Rule 17f-2 Rule 17f-5 Rule 26a-2 Other
------------ ------------ ---------- ---------- ------------- -----
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SCREEN NUMBER: 9
This page being
filed for series 0.
18. Does Registrant's/Series' custodian(s) maintain some
or all of Registrant's/Series' securities in a central
depository or book-entry system pursuant to Rule 17f-4? (Y or N) Y
19. Family of investment companies information:
A) Is Registrant part of a family of investment companies? (Y or N) Y
B) If 'Y' (Yes), state the number of registered management
investment companies in the family: 8
(NOTE: Count as a separate company each series of a series company
and each portfolio of a multiple portfolio company; exclude
all series of unit investment trusts from this number.)
C) Identify the family using 10 letters: HYPERIONXX
(NOTE: In filing this form, use this identification consistently for
all investment companies in the family including any unit
investment trusts. This designation is for purposes of
this form only.)
SCREEN NUMBER: 10
20. Brokerage commissions paid on portfolio transactions of Registrant:
List the 10 brokers which received the largest amount of brokerage commissions
(excluding dealer concessions in underwritings) by virtue of direct or in-
direct participation in Registrant's portfolio transactions, set forth in
order of size of gross commissions during the current reporting period:
(FOR SERIES COMPANIES, ITEMS 20 & 21 MUST BE ANSWERED IN TOTAL FOR ALL SERIES)
Commissions
Name of Broker IRS Number Received
(000's omitted)
0
0
0
0
0
0
0
0
0
0
21. Aggregate brokerage commissions paid by Registrant
during current reporting period (000's omitted): 0
SCREEN NUMBER: 11
22. Registrant's portfolio transactions with entities acting as principals:
List the 10 entities acting as principals with whom Registrant did the largest
amount of portfolio transactions (include all short-term obligations, and U.S.
Gov't. & tax-free securities) in both the secondary market & in underwritten
offerings set forth in order of size based upon total value of principal
transactions during the current reporting period: (FOR SERIES COMPANIES, ITEMS
22 AND 23 MUST BE ANSWERED IN TOTAL FOR ALL SERIES) Registrant Sales by
Name of Entity IRS Number Purchases Registrant
(000's omitted)
STATE STREET BANK & TRUST 04-1867445 310642 0
MORGAN STANLEY & CO., INC. 13-2655998 196571 0
MERRILL LYNCH, PIERCE, FENNER & SMITH, INC. 13-5674085 39019 38825
PAINEWEBBER, INC. 13-2638166 0 34967
BEAR STEARNS & CO. 13-3299429 15996 0
SALOMON SMITH BARNEY 11-2418191 0 6742
GOLDMAN SACHS & CO. 13-5108880 0 5002
LEHMAN BROTHERS INC. 13-2518466 4997 0
J.P. MORGAN SECURITIES INC. 13-3224016 1925 0
NATIONSBANK 75-0520130 1010 0
23. Aggregate principal purchase/sale transactions of Registrant during current
reporting period. C. Total Purchases: 571160 D. Total Sales: 85538
(000's omitted)
SCREEN NUMBER: 12
This page being
filed for series 0.
24. At the end of the current period, did the Registrant/Series hold any
securities of the Registrant's/Series' regular brokers or dealers or
of the parents of such brokers or dealers that derive more than 15%
of gross revenue from securities-related activities? (Y or N): N
NOTE: If answer is 'N' (No), please go on to screen 15.
SCREEN NUMBER: 13
This page being
filed for series 0.
25. List below the information requested about Registrant's/Series' holdings of
the securities of the Registrant's/Series' regular brokers or dealers or of
their parents that derive more than 15% of gross revenues from securities-
related activities:
Type of Value of any
Name of Regular Broker or IRS Security Securities
Dealer or Parent (Issuer) Number Owned Owned at end
D=debt of current
E=equity period
(000's omitted)
0
0
0
0
0
0
0
0
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SCREEN NUMBER: 14
This page being
filed for series 0.
25. List below the information requested about Registrant's/Series' holdings of
the securities of the Registrant's/Series' regular brokers or dealers or of
their parents that derive more than 15% of gross revenues from securities-
related activities:
Type of Value of any
Name of Regular Broker or IRS Security Securities
Dealer or Parent (Issuer) Number Owned Owned at end
D=debt of current
E=equity period
(000's omitted)
0
0
0
0
0
0
0
0
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SCREEN NUMBER: 14
26. Considerations which affected the participation of brokers or dealers
or other entities in commissions or other compensation paid on
portfolio transactions of Registrant:
[ FOR SERIES COMPANIES THIS ITEM IS TO BE ANSWERED IN TOTAL FOR ALL SERIES ]
Answer each of the following with 'Y' or 'N'.
A) Sales of Registrant's/Series' shares -------------------------------- N
B) Receipt of investment research and statistical information ---------- Y
C) Receipt of quotations for portfolio valuations ---------------------- Y
D) Ability to execute portfolio transactions
to obtain best price and execution --------------------------------- Y
E) Receipt of telephone line and wire services ------------------------- Y
F) Broker or dealer which is an affiliated person ---------------------- N
G) Arrangement to return or credit part or all of
commissions or profits thereon:
(i) To investment adviser, principal underwriter,
or an affiliated person of either ---------------------------- N
(ii) To Registrant ------------------------------------------------ N
H) Other --------------------------------------------------------------- N
SCREEN NUMBER: 15
SALES AND REPURCHASES
27. Is Registrant an open-end investment company? (Y or N): N
NOTE: If answer is 'N' (No), please delete any answers you may
have entered for questions 28 through 44.
If you have done this already or not yet responded to
question 28 through 44, please jump to Screen Number 23.
SCREEN NUMBER: 16
This page being
28. Monthly Sales and Repurchases of filed for series 0.
Registrant's/Series' Shares:
Total NAV Total NAV Total NAV
of Shares of Shares Total NAV of Shares
Sold: New Sold: Reinv. of Shares Redeemed and
Month of Sales (Incl. of Dividends Sold: Repurchased
Current Period Exchanges) & Distributions Other (Incl. Exchanges)
(000's omitted) (000's omitted)
A) First month of period $ 0 $ 0 $ 0 $ 0
B) Second month of period $ 0 $ 0 $ 0 $ 0
C) Third month of period $ 0 $ 0 $ 0 $ 0
D) Fourth month of period $ 0 $ 0 $ 0 $ 0
E) Fifth month of period $ 0 $ 0 $ 0 $ 0
F) Sixth month of period $ 0 $ 0 $ 0 $ 0
G) Total $ 0 $ 0 $ 0 $ 0
H) Total NAV of Registrant's/Series' share sales during the
period subject to a sales load (000's omitted) $ 0
(Note: 28H is the total of six months and must be
less than or equal to 28G1 + 28G2 + 28G3)
SCREEN NUMBER: 17
This page being
filed for series 0.
29. Was a front-end sales load deducted from any share sales
during the reporting period? (Y or N) -------------------------
NOTE: If answer is 'N' (No), please jump to Screen Number 20.
30.A) Total front-end sales loads collected from sales
(including exchanges) by principal underwriter
or by any underwriter which is an affiliated
person of the principal underwriter, of
Registrant's/Series' shares during the
current period (000's omitted) ------------------------------ $ 0
B) What is the maximum sales load rate in effect at the end of
the period as a percentage of the offering price? ----------- 0.00%
C) What is the minimum sales load rate in effect at the end of
the period as a percentage of the offering price? ----------- 0.00%
SCREEN NUMBER: 18
This page being
filed for series 0.
31.A) Net amount retained by Registrant's/Series' principal underwriter
or by any underwriter or dealer which is an affiliated person of the
principal underwriter thereof from front-end sales loads collected
from sales of Registrant's/Series' shares during the current period
($000's omitted). ------------------------------------ $ 0
31.B) Amount by which payout by Registrant's/Series' principal underwriter or
by any underwriter which is an affiliated person of the principal under-
writer thereof to persons or entities selling Registrant's/Series' shares
exceeded that reported in Item 30 ($000's omitted). -- $ 0
32. Amount Registrant's/Series' principal underwriter and any underwriters
or dealers which are affiliated persons of the principal underwriter paid
to dealers which are not affiliated persons of the principal underwriter
for selling Registrant's/Series' shares that were sold with a front-end
sales load during current period ($000's omitted). --- $ 0
33. Amount paid to a captive retail sales force of Registrant's/Series'
principal underwriter or of any underwriter or dealer which is an af-
filiated person of the principal underwriter for selling Registrant's
shares that were sold with a front-end sales load during current period
($000's omitted). ------------------------------------ $ 0
SCREEN NUMBER: 19
This page being
filed for series 0.
34. Did Registrant/Series impose a deferred or contingent
deferred sales load during the reporting period? (Y or N) ------
NOTE: If answer is 'N' (No), skip the remaining questions on this screen
and proceed to Screen Number 21.
35. Total deferred or contingent deferred sales loads collected
during current period from redemptions and repurchases of
Registrant's/Series' shares ($000's omitted) ------------------ $ 0
36.A) Did Registrant/Series retain all monies collected from the
deferred or contingent deferred sales loads during the
reporting period? (Y or N) -----------------------------------
B) If the answer to sub-item 36A is 'N' (No), state the net
amount Registrant/Series retained from deferred or
contingent deferred sales loads ($000's omitted) ------------ $ 0
SCREEN NUMBER: 20
This page being
filed for series 0.
37. Did Registrant/Series impose a redemption fee other than a deferred
or contingent sales load during the reporting period? (Y or N) ---
NOTE: If answer is 'N' (No), go to item 39.
38. Total amount of redemption fees other than deferred or contingent
deferred sales loads collected from redemptions and repurchases of
Registrant's/Series' shares during the current period.
($000's omitted) ------------------------------------------------- $ 0
39. Were any account maintenance fees or other administrative fees imposed
directly on shareholders during the current period? (Y or N) -----
40. During the period, did the Registrant/Series have a plan of
distribution adopted pursuant to rule 12b-1? (Y or N) ------------
NOTE: If answer is 'N' (No), jump to Screen 23 for your next screen.
41. During the period, did Registrant/Series use its assets directly
to make payments under the 12b-1 plan? (Y or N) ------------------
NOTE: If answer is 'N' (No), go to next screen (Screen 22)
and begin answering at question 44.
SCREEN NUMBER: 21
This page being
42. For the current period, indicate the filed for series 0.
percentage of total dollars paid directly
by Registrant/Series under the 12b-1 plan for each of the following:
(Round to the nearest whole percent)
A) Advertising ------------------------------------------------- 0%
B) Printing and mailing of prospectuses to other than
current shareholders ---------------------------------------- 0%
C) Payments to underwriters ------------------------------------ 0%
D) Payments to brokers or dealers ------------------------------ 0%
E) Direct payments to sales personnel -------------------------- 0%
F) Payments to banks and savings and loans --------------------- 0%
G) Other uses, incl. payments to investment adviser
separate from the advisory fee ------------------------------ 0%
H) Unallocated payments made for a combination of such services 0%
43. Total amount paid directly by Registrant/Series pursuant
to its 12b-1 plan ($000's omitted) ---------------------------- $ 0
44. If an investment adviser or other affiliated person of Registrant/Series
made unreimbursed payments pursuant to Registrant's/Series' 12b-1 plan,
state the total amount of such payments. ($000's omitted) ----- $ 0
SCREEN NUMBER: 22
Contracts This page being
filed for series 0.
45. Did Registrant/Series have an advisory contract during the period?
(If 'N' (No), jump to screen 26 for your next screen.) --------------- Y
46. Did Registrant/Series pay more than one investment adviser directly
for investment advice during the period? (If 'Y' (Yes), answer items
47-52 in the aggregate for all such investment advisers.) ------------ N
47. Was Registrant's/Series' advisory fee based solely on a percentage of
its assets? (Y or N) ------------------------------------------------- Y
48. If answer to 47 is 'Y' (Yes), fill in the table or the single fee rate
applied to Registrant's/Series' assets based on the advisory contract.
SINGLE FEE RATE ------- 0.650%
STEP: ASSET VALUE ($000's omitted) ANNUAL FEE RATE
A) first - $ 0 0.000%
B) of next - $ 0 0.000%
C) of next - $ 0 0.000%
D) of next - $ 0 0.000%
E) of next - $ 0 0.000%
F) of next - $ 0 0.000%
G) of next - $ 0 0.000%
H) of next - $ 0 0.000%
I) of next - $ 0 0.000%
J) of next - $ 0 0.000%
K) over - $ 0 0.000%
SCREEN NUMBER: 23
This page being
ADVISORY FEE filed for series 0.
(Y or N)
49. Was Registrant's/Series' advisory fee during the period based
solely on a percentage of its income? -------------------------- N
50. Was Registrant's/Series' advisory fee during the period based
on some combined percentage of its income & assets? ------------ N
51. Was Registrant's/Series' advisory fee during the period based
in whole or in part on its investment performance? ------------- N
52. Was Registrant's/Series' advisory fee during the period based
in whole or in part upon the assets, income or performance of
other registrants? --------------------------------------------- N
53.A) Were the expenses of the Registrant/Series limited or re-
duced at any time during the period by some agreement or
understanding other than by blue sky laws? ------------------- N
[ If 53A is 'Y' (Yes), was limitation that applied during
current period based upon: ]
B) Assets? C) Income? (Y or N)
SCREEN NUMBER: 24
This page being
filed for series 0.
54. Indicate below whether services were supplied or paid for wholly or in
substantial part by investment adviser(s) or administrator(s) in
connection with the advisory or administrative contract(s) but for which
the adviser(s) or administrator(s) are not reimbursed by the Registrant:
(Y or N)
A) Occupancy and office rental ------------------------------------------ Y
B) Clerical and bookkeeping services ------------------------------------ Y
C) Accounting services -------------------------------------------------- Y
D) Services of independent auditors ------------------------------------- N
E) Services of outside counsel ------------------------------------------ N
F) Registration and filing fees ----------------------------------------- N
G) Stationery, supplies and printing ------------------------------------ N
H) Salaries & compensation of Registrant's interested directors --------- Y
I) Salaries & compensation of Registrant's disinterested directors ------ N
J) Salaries & compensation of Registrant's officers who are not directors Y
K) Reports to current shareholders -------------------------------------- N
L) Determination of offering and redemption prices ---------------------- N
M) Trading department --------------------------------------------------- Y
N) Prospectus preparation and printing for current shareholders --------- N
O) Other ---------------------------------------------------------------- N
SCREEN NUMBER: 25
This page being
filed for series 0.
MISCELLANEOUS INFORMATION
55. Did Registrant/Series have any of the following
outstanding at any time during the current period (Y or N)
which exceeded 1% of aggregate net assets?
A) Overdrafts -------------------------------------------------- N
B) Bank Loans -------------------------------------------------- N
56. During the period did the Registrant's/Series' investment adviser(s)
have advisory clients other than investment companies? --------- Y
57. Did the Registrant/Series adjust the number of its shares
outstanding by means of a stock split or stock dividend? ------- N
SCREEN NUMBER: 26
This page being
CLASSIFICATION filed for series 0.
(Y or N)
58.A) Is Registrant/Series a separate account of an insurance company? N
If answer is 'Y' (Yes), are any of the following types
of contracts funded by the Registrant:
B) Variable annuity contracts? ---------------------------------
C) Scheduled premium variable life contracts? ------------------
D) Flexible premium variable life contracts? -------------------
E) Other types of insurance products registered under
the Securities Act of 1933? ---------------------------------
59. Is Registrant/Series a management investment company? ------------ Y
60.A) Was Registrant/Series a diversified investment company at any
time during the reporting period? ------------------------------ Y
B) Is Registrant/Series a diversified investment company as of the
end of the reporting period? ----------------------------------- Y
61. What is the lowest minimum initial investment required by
Registrant/Series from an investor that is not an employee or
otherwise affiliated with the Registrant/Series, its adviser,
principal underwriter or other affiliated entity? $ 0
SCREEN NUMBER: 27
62.A) Does the Registrant/Series invest primarily in This page being
debt securities, including convertible debt filed for series 0.
securities, options & futures on debt
securities or indices of debt securities? (Y or N) ----------- Y
NOTE: If answer is 'N' (No), jump to Screen Number 30.
If answer is 'Y' (Yes), state the percentage of net assets
in each type at the end of the current period:
SHORT-TERM MATURITIES
B) U.S. Treasury 0.0% C) U.S. Government Agency 0.0%
D) Repurchase agreements 1.5% F) Bank Certificates of
E) State and Municipal tax-free 0.0% deposit-Domestic 0.0%
G) Bank Certificates of deposit-Foreign 0.0% H) Bankers acceptances 0.0%
I) Commercial paper taxable 0.0% J) Time deposits 0.0%
K) Options 0.0% L) All other 0.0%
INTERMEDIATE & LONG-TERM MATURITIES
M) U.S. Treasury 0.0% N) U.S. Government Agency 65.9%
O) State and Municipal tax-free 10.5% P) Corporate 0.0%
Q) All other 68.5%
R) Investments other than debt securities 0.0%
SCREEN NUMBER: 28
This page being
filed for series 0.
63. State the dollar weighted average portfolio maturity at the end of the
period covered by this report in days or, if longer than 1 yr.,
in years to one decimal place: A: 0 days
B: 4.7 years
64.A) Is the timely payment of principal and interest on any of the
instruments listed in item 62 insured or guaranteed by an entity
other than the issuer? (Y or N) ----------------------------------- Y
B) Is the issuer of any instrument covered in item 62 delinquent or
in default as to payment of principal or interest at the end of
the current period? (Y or N) -------------------------------------- N
[If answer is 'N' (No), jump to screen 30 for your next screen.]
65. In computations of NAV per share, is any part of the value
attributed to instruments identified in sub-item 64B derived
from insurance or guarantees? (Y or N) ------------------------------
SCREEN NUMBER: 29
66.A) Is the Registrant/Series a fund that This page being
usually invests in equity securities, filed for series 0.
options & futures on equity securities,
indices of equity securities or securities
convertible into equity securities? ----------------------------- N
If answer is 'N', go to item 67. Otherwise place a 'Y' on the line below which
best describes its primary investment objective (place an 'N' on other lines).
B) Aggressive capital appreciation ---------------------------
C) Capital appreciation --------------------------------------
D) Growth ----------------------------------------------------
E) Growth and income -----------------------------------------
F) Income ----------------------------------------------------
G) Total return ----------------------------------------------
67. Is the Registrant/Series a balanced fund? (Y or N) ---------------- N
68. Does the Registrant/Series have more than 50% of its net assets
at the end of the current period invested in:
A) The securities of issuers engaged primarily in the pro-
duction or distribution of precious metals? (Y or N) ------ N
B) The securities of issuers located primarily in countries
other than the United States? (Y or N) -------------------- N
69. Is the Registrant/Series an index fund? (Y or N) ------------------ N
SCREEN NUMBER: 30
This page being
INVESTMENT PRACTICES filed for series 0.
70. Activity Permitted by invest- Engaged in
ment policies? this period?
(Y or N) (Y or N)
A) Writing or investing in repurchase agreements Y Y
B) Writing or investing in options on equities N N
C) Writing or investing in options on debt securities Y N
D) Writing or investing in options on stock indices N N
E) Writing or investing in interest rate futures Y N
F) Writing or investing in stock index futures N N
G) Writing or investing in options on futures Y N
H) Writing or investing in options on stock index futures N N
I) Writing or investing in other commodity futures N N
J) Investments in restricted securities Y Y
K) Investments in shares of other investment companies N N
L) Investments in securities of foreign issuers Y N
M) Currency exchange transactions N N
N) Loaning portfolio securities Y N
O) Borrowing of money Y Y
P) Purchases/sales by certain exempted affiliated persons Y N
Q) Margin purchases N N
R) Short selling Y N
SCREEN NUMBER: 31
This page being
71. Portfolio turnover rate for the current filed for series 0.
reporting period
A) Purchases ($000's omitted) ---------------------------------- $ 77393
B) Sales [including all maturities] ($000's omitted) ----------- $ 85538
C) Monthly average value of portfolio ($000's omitted) --------- $ 237423
D) Percent turnover (use lesser of 71A) or 71B) divided by 71C)) 33%
NOTE: Item 71D) should be a whole number; round if necessary.
FINANCIAL INFORMATION
72.A) How many months do the answers to 72 and 73 cover? ----------- 12 months
INCOME (000's omitted)
B) Net interest income ----------------------------------------- $ 14745
C) Net dividend income ----------------------------------------- $ 0
D) Account maintenance fees ------------------------------------ $ 0
E) Net other income -------------------------------------------- $ 0
EXPENSES
F) Advisory fees ----------------------------------------------- $ 1045
G) Administrator(s) fees --------------------------------------- $ 258
(Negative answers are allowed)
H) Salaries and other compensation ----------------------------- $ 0
SCREEN NUMBER: 32
This page being
FINANCIAL INFORMATION (Cont. from Screen 32) filed for series 0.
EXPENSES (Negative answers are allowed) For the period covered by this form
($000's omitted)
72.I) Shareholder servicing agent fees ------------------- $ 23
J) Custodian fees ------------------------------------- $ 61
K) Postage -------------------------------------------- $ 0
L) Printing expenses ---------------------------------- $ 31
M) Directors' fees ------------------------------------ $ 76
N) Registration fees ---------------------------------- $ 24
O) Taxes ---------------------------------------------- $ 0
P) Interest ------------------------------------------- $ 4222
Q) Bookkeeping fees paid to anyone
performing this service ---------------------------- $ 0
R) Auditing fees -------------------------------------- $ 52
S) Legal fees ----------------------------------------- $ 37
T) Marketing/distribution payments including
payments pursuant to a rule 12b-1 plan ------------- $ 0
U) Amortization of organization expenses -------------- $ 0
V) Shareholder meeting expenses ----------------------- $ 0
W) Other expenses ------------------------------------- $ 154
X) Total expenses ------------------------------------- $ 5983
SCREEN NUMBER: 33
This page being
FINANCIAL INFORMATION (Cont. from Screen 33) filed for series 0.
EXPENSES (Negative answers are allowed For the period covered by this form
on this screen for 72Z only) ($000's omitted)
72.Y) Expense reimbursements ----------------------------- $ 0
Z) Net investment income ------------------------------ $ 8762
AA) Realized capital gains ----------------------------- $ 0
BB) Realized capital losses ---------------------------- $ 880
CC) 1. Net unrealized appreciation during the period --- $ 0
2. Net unrealized depreciation during the period --- $ 10263
DD) 1. Total income dividend~ for which record date
passed during the period ------------------------ $ 9127
2. Dividends for a second class of open-end
company shares -----------------------------------$ 0
EE) Total capital gains distributions for which
record date passed during the period --------------- $ 0
73. Distributions per share for which record date passed during the period:
NOTE: Show in fractions of a cent if so declared.
A) 1. Dividends from net investment income ------------ $ 0.5354
2. Dividends for a second class of open-end
company shares ---------------------------------- $ 0.0000
B) Distribution of capital gains ---------------------- $ 0.0000
C) Other distributions -------------------------------- $ 0.0000
SCREEN NUMBER: 34
This page being
filed for series 0.
As of the end of current reporting
74. Condensed balance sheet data: period (000's omitted except
for per share amounts)
A) Cash ----------------------------------------------- $ 1
B) Repurchase agreements ------------------------------ $ 2267
C) Short-term debt securities other than
repurchase agreements ------------------------------ $ 0
D) Long-term debt securities including
convertible debt------------------------------------ $ 223187
E) Preferred, convertible preferred, and
adjustable rate preferred stock -------------------- $ 0
F) Common stock --------------------------------------- $ 0
G) Options on equities -------------------------------- $ 0
H) Options on all futures ----------------------------- $ 0
I) Other investments ---------------------------------- $ 0
J) Receivables from portfolio instruments sold -------- $ 0
K) Receivables from affiliated persons ---------------- $ 0
L) Other receivables ---------------------------------- $ 1307
M) All other assets ----------------------------------- $ 90
N) Total assets --------------------------------------- $ 226852
SCREEN NUMBER: 35
This page being
(Continued from Screen 35) filed for series 0.
Condensed balance sheet data: As of the end of current reporting
period (000's omitted except for per
share amounts and number of accounts)
74.O) Payables for portfolio instruments purchased ----------------- $ 0
P) Amounts owed to affiliated persons --------------------------- $ 0
Q) Senior long-term debt ---------------------------------------- $ 0
R) Other liabilities: 1. Reverse repurchase agreements --------- $ 71905
2. Short sales --------------------------- $ 0
3. Written options ----------------------- $ 0
4. All other liabilities ----------------- $ 923
S) Senior equity ------------------------------------------------ $ 0
T) Net assets of common shareholders ---------------------------- $ 154024
U) 1. Number of shares outstanding ------------------------------ 17037
2. Number of shares outstanding of a second class of shares
of open-end company --------------------------------------- 0
V) 1. Net asset value per share (to nearest cent) --------------- $ 9.04
2. Net asset value per share of a second class of open-end
company shares (to nearest cent) -------------------------- $ 0.00
W) Mark-to-market net asset value per share
for money market funds only (to 4 decimals) ------------------ $ 0.0000
X) Total number of shareholder accounts ------------------------- 7894
Y) Total value of assets in segregated accounts ----------------- $ 89074
SCREEN NUMBER: 36
This page being
filed for series 0.
75. Average net assets during the current reporting period
($000's omitted). Answer only one:
A) Daily average (for money market funds) ----------------------- $ 0
B) Monthly average (for all other funds) ----------------------- $ 160725
76. Market price per share at end of period (closed-end funds only) $ 7.94
SCREEN NUMBER: 37
77.A) Is the Registrant filing any of the following attachments
with the current filing of Form N-SAR? (ANSWER FOR ALL
SERIES AS A GROUP) (Y or N) ------------------------------- Y
NOTE: If answer is 'Y' (Yes), mark those items
below being filed as an attachment to this Filed as
form or incorporated by reference. Attachment
B) Accountant's report on internal control ------------------- Y
C) Matters submitted to a vote of security holders -----------
D) Policies with respect to security investment --------------
E) Legal proceedings -----------------------------------------
F) Changes in security for debt ------------------------------
G) Defaults and arrears on senior securities -----------------
H) Changes in control of Registrant --------------------------
I) Terms of new or amended securities ------------------------
J) Revaluation of assets or restatement of
capital share account -------------------------------------
K) Changes in Registrant's certifying account ----------------
L) Changes in accounting principles and practices ------------
M) Mergers ---------------------------------------------------
N) Actions required to be reported pursuant to Rule 2a-7 -----
O) Transactions effected pursuant to Rule 10f-3 --------------
P) Information required to be filed pursuant
to exemptive orders ---------------------------------------
(Item 77 continued on next screen)
SCREEN NUMBER: 38
77. (Continued) Mark those items below being filed as
an attachment to this form or incorporated form Filed as
or incorporated by reference. Attachment
Q1) Exhibits -------------------------------------------------- Y
Q2) Any information called for by instructions to
sub-item 77Q2 --------------------------------------------- N
Q3) Any information called for by instructions to
sub-item 77Q3 --------------------------------------------- N
78. Does the Registrant have any wholly-owned investment company
subsidiaries whose operating & financial data are consolidated
with that of Registrant in this report? (Y or N) N
NOTE: If answer is 'N' (No), jump to Screen 41.
SCREEN NUMBER: 39
79. List the '811' numbers and names of Registrant's wholly owned
investment company subsidiaries consolidated in this report.
811 Number Subsidiary Name
811-
811-
811-
811-
811-
811-
811-
811-
811-
811-
Press Ctrl-Left Arrow for previous, Ctrl-Right Arrow for next/more.
SCREEN NUMBER: 40
ANNUAL SUPPLEMENT This page being
filed for series 0.
Screens 41 & 42 are to be filed only once each
year, at the end of Registrant's/Series' fiscal year.
80. Fidelity bond(s) in effect at the end of the period:
A) Insurer name: RELIANCE INSURANCE COMPANY
B) Second insurer:
C) Aggregate face amount of coverage for Registrant/Series on
all bonds on which it is named as an insured (000's omitted): $ 4000
81. A) Is the bond part of a joint fidelity bond(s) shared
with other investment companies, or other entities? (Y or N) - Y
B) If answer to 81A is 'Y' (Yes), how many other
investment companies, or other entities are covered by the bond?
(Count each series as a separate investment company.) -------- 3
82. A) Does the mandatory coverage of the fidelity bond
have a deductible? (Y or N) ---------------------------------- Y
B) If the answer to 82A is 'Y' (Yes), what is the
amount of the deductible? ($000's omitted) ------------------ $ 25
SCREEN NUMBER: 41
ANNUAL SUPPLEMENT (Continued) This page being
filed for series 0.
83.A) Were any claims with respect to this Registrant/
Series filed under the bond during the period? (Y or N) -------- N
B) If the answer to 83 A) is 'Y' (Yes), what was the
total amount of such claims? ($000's omitted) ----------------- $ 0
84.A) Were any losses incurred with respect to this
Registrant/Series that could have been filed as a
claim under the fidelity bond but were not? (Y or N) ----------- N
B) If the answer to 84 A) is 'Y' (Yes), what was the
total amount of such losses? ($000's omitted) ----------------- $ 0
85.A) Are Registrant's/Series' officers and directors
covered as officers and directors of Registrant/Series
under any errors and omissions insurance policy
owned by the Registrant/Series or anyone else (Y or N) --------- Y
B) Were any claims filed under such policy during the
period with respect to the Registrant/Series? (Y or N) --------- N
SCREEN NUMBER: 42
Closed-End Investment Companies Only
86. Sales, repurchases, and redemptions of
Registrant's securities:
Number of Shares Net
or Principal Consideration
Amount of Debt Received or Paid
($000's omitted) ($000's omitted)
Common Stock:
A) Sales 0 $ 0
B) Repurchases 69 $ 592
Preferred Stock:
C) Sales 0 $ 0
D) Repurchases and Redemptions 0 $ 0
Debt Securities
E) Sales $ 0 $ 0
F) Repurchases and Redemptions $ 0 $ 0
SCREEN NUMBER: 43
Closed-End Investment Companies Only
87. Securities of Registrant registered on a
national securities exchange or listed
on NASDAQ:
CUSIP or Ticker
Title of each class of securities NASDAQ No. Symbol
A) COMMON STOCK 448918102 HTO
B)
C)
88. Did Registrant have any of the following outstanding which exceeded 1%
of aggregate net assets at any time during the period?
(Y or N)
A) Notes or bonds ------------------------------ N
B) Uncovered options --------------------------- N
C) Margin loans -------------------------------- N
D) Preferred stock ----------------------------- N
SCREEN NUMBER: 44
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000895415
<NAME> HYPERION 2005 INVESTMENT GRADE OPPORTUNITY TERM TRUST, INC.
<SERIES>
<NUMBER> 0
<NAME> HYPERION 2005 INVESTMENT GRADE OPPORTUNITY TERM TRUST, INC.
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<INVESTMENTS-AT-COST> 232908
<INVESTMENTS-AT-VALUE> 225454
<RECEIVABLES> 1307
<ASSETS-OTHER> 91
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 226852
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 72828
<TOTAL-LIABILITIES> 72828
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 165382
<SHARES-COMMON-STOCK> 17037
<SHARES-COMMON-PRIOR> 17106
<ACCUMULATED-NII-CURRENT> 1678
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (5582)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (7454)
<NET-ASSETS> 154024
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 14745
<OTHER-INCOME> 0
<EXPENSES-NET> 5983
<NET-INVESTMENT-INCOME> 8762
<REALIZED-GAINS-CURRENT> (880)
<APPREC-INCREASE-CURRENT> (10263)
<NET-CHANGE-FROM-OPS> (2381)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (9127)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 69
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (12100)
<ACCUMULATED-NII-PRIOR> 2027
<ACCUMULATED-GAINS-PRIOR> (4705)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1045
<INTEREST-EXPENSE> 4222
<GROSS-EXPENSE> 5983
<AVERAGE-NET-ASSETS> 160725
<PER-SHARE-NAV-BEGIN> 9.71
<PER-SHARE-NII> 0.51
<PER-SHARE-GAIN-APPREC> (0.64)
<PER-SHARE-DIVIDEND> (0.54)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.04
<EXPENSE-RATIO> 1.10
[AVG-DEBT-OUTSTANDING] 79021
[AVG-DEBT-PER-SHARE] 4.63
</TABLE>
HYPERION 2005 INVESTMENT GRADE OPPORTUNITY
TERM TRUST, INC.
One Liberty Plaza o New York, New York 10006-1404
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
February 25, 2000
To the Stockholders:
The Annual Meeting of Stockholders of Hyperion 2005 Investment
Grade Opportunity Term Trust, Inc. (the "Trust") will be held at The
Downtown Association, 60 Pine Street (between William Street and Pearl
Street), New York, New York 10005, on Tuesday, April 18, 2000, at 10:30
a.m., for the following purposes:
1. To elect directors (Proposal 1).
2. To ratify or reject the selection of
PricewaterhouseCoopers LLP as the independent accountants of
the Trust for the fiscal year ending December 31, 2000
(Proposal 2).
3. Shareholder proposal to request the Directors of the Trust to
immediately begin the orderly liquidation of the Trust's assets
(Note: The Board of Directors unanimously recommend a vote
AGAINST this proposal) (Proposal 3).
4. To transact any other business that may properly come
before the meeting.
The close of business on February 17, 2000 has been fixed as
the record date for the determination of stockholders entitled to notice
of and to vote at the meeting.
By Order of the Board of Directors,
Patricia A. Sloan
Secretary
WE NEED YOUR PROXY VOTE IMMEDIATELY.
YOU MAY THINK YOUR VOTE IS NOT IMPORTANT, BUT IT IS VITAL. THE MEETING
OF STOCKHOLDERS OF THE TRUST WILL BE UNABLE TO CONDUCT ANY BUSINESS IF
LESS THAN A MAJORITY OF THE SHARES ELIGIBLE TO VOTE IS REPRESENTED. IN
THAT EVENT, THE TRUST, AT STOCKHOLDERS' EXPENSE, WOULD CONTINUE TO
SOLICIT VOTES IN AN ATTEMPT TO ACHIEVE A QUORUM. CLEARLY, YOUR VOTE
COULD BE CRITICAL TO ENABLE THE TRUST TO HOLD THE MEETING AS SCHEDULED,
SO PLEASE RETURN YOUR PROXY CARD IMMEDIATELY. YOU AND ALL OTHER
STOCKHOLDERS WILL BENEFIT FROM YOUR COOPERATION.
Instructions for Signing Proxy Cards
The following general rules for signing proxy cards may be of
assistance to you and avoid the time and expense to the Trust involved
in validating your vote if you fail to sign your proxy card properly.
1. Individual Accounts. Sign your name exactly as it appears
in the registration on the proxy card.
2. Joint Accounts. Either party may sign, but the name of the
party signing should conform exactly to the name shown in the
registration.
3. All Other Accounts. The capacity of the individual signing
the proxy card should be indicated unless it is reflected in the form of
registration. For example:
<TABLE>
<S> <C>
Registration Valid Signature
Corporate Accounts
(1) ABC Corp. ABC Corp.
(2) ABC Corp. John Doe, Treasurer
(3) ABC Corp.
c/o John Doe, Treasurer John Doe
(4) ABC Corp. Profit Sharing Plan John Doe, Trustee
Trust Accounts
(1) ABC Trust John B. Doe, Trustee
(2) Jane B. Doe, Trustee
u/t/d 12/28/78 Jane B. Doe
Custodial or Estate Accounts
(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr.
UGMA John B. Smith
(2) John B. Smith John B. Smith, Jr., Executor
</TABLE>
HYPERION 2005 INVESTMENT GRADE OPPORTUNITY
TERM TRUST, INC.
One Liberty Plaza o New York, New York 10006-1404
PROXY STATEMENT
This proxy statement is furnished in connection with a
solicitation by the Board of Directors of Hyperion 2005 Investment Grade
Opportunity Term Trust, Inc. (the "Trust") of proxies to be used at the
Annual Meeting of Stockholders of the Trust to be held at The Downtown
Association, 60 Pine Street (between William Street and Pearl Street),
New York, New York 10005, at 10:30 a.m. on Tuesday, April 18, 2000 (and
at any adjournment or adjournments thereof) for the purposes set forth
in the accompanying Notice of Annual Meeting of Stockholders. This
proxy statement and the accompanying form of proxy are first being
mailed to stockholders on or about February 25, 2000. Stockholders who
execute proxies retain the right to revoke them by written notice to the
Secretary of the Trust at any time before they are voted. Unrevoked
proxies will be voted in accordance with the specifications thereon and,
unless specified to the contrary, will be voted FOR the election of the
three nominees for director, FOR the ratification of the selection of
PricewaterhouseCoopers LLP as the independent accountants of the Trust
for the fiscal year ending December 31, 2000 and AGAINST the shareholder
proposal to request the Directors of the Trust to immediately begin the
orderly liquidation of the Trust's assets. The close of business on
February 17, 2000 has been fixed as the record date for the
determination of stockholders entitled to notice of and to vote at the
meeting. Each stockholder is entitled to one vote for each share held.
Abstentions will be treated as shares that are present and entitled to
vote for purposes of determining the presence of a quorum but as unvoted
for purposes of determining the approval of any matters submitted to
stockholders for a vote. Broker non-votes will not be counted for
purposes of determining the presence of a quorum or determining whether
a proposal has been approved. On the record date there were 17,021,573
shares outstanding.
PROPOSAL 1: ELECTION OF DIRECTORS
The Trust's Articles of Incorporation provide that the Trust's
Board of Directors shall be divided into three classes: Class I, Class
II and Class III. The terms of office of the present directors in each
class expire at the Annual Meeting in the year indicated or thereafter
in each case when their respective successors are elected and qualified:
Class I, 2001; Class II, 2002; and Class III, 2000. At each subsequent
annual election, Directors chosen to succeed those whose terms are
expiring will be identified as being of that same class and will be
elected for a three-year term. The effect of these staggered terms is
to limit the ability of other entities or persons to acquire control of
the Trust by delaying the replacement of a majority of the Board of
Directors.
The terms of Harry E. Petersen, Jr., Lewis S. Ranieri, and
Kenneth C. Weiss, the members of Class III currently serving on the
Board of Directors, expire at this year's Annual Meeting. The persons
named in the accompanying form of proxy intend to vote at the Annual
Meeting (unless directed not to so vote) for the re-election of Messrs.
Petersen and Ranieri, and for the election of Mr. John W. English. Each
nominee has indicated that he will serve if elected, but if any nominee
should be unable to serve, the proxy or proxies will be voted for any
other person or persons, as the case may be, determined by the persons
named in the proxy in accordance with their judgment.
As described above, there are three nominees for election to
the Board of Directors at this time. Proxies cannot be voted for a
greater number of persons than the three nominees currently proposed to
serve on the Board of Directors.
The following table provides information concerning each of the
eight members and nominees of the Board of Directors of the Trust:
<TABLE>
<S> <C> <C> <C>
Shares of Common
Stock
Beneficially
Owned Directly or
Indirectly, on
Name and Office Principal Occupation During Past Five Years, Director December 31,
with the Trust Other Directorships and Age Since 1999(**)
Class III Nominees to serve until 2003 Annual Meeting of Stockholders:
Harry E. Petersen, Jr.
Director, Member of the Director and/or Trustee of several investment companies advised by
Audit Committee Hyperion Capital Management, Inc. or by its affiliates (1992-Present).
Senior Advisor to Cornerstone Equity Advisors, Inc. (1998-Present).
Formerly, Senior Advisor to Potomac Babson Inc. (1995-1998); Director
of Equitable Real Estate Hyperion Mortgage Opportunity Fund, Inc. and
Equitable Real Estate Hyperion High Yield Commercial Mortgage Fund,
Inc. (1995-1997); Director of Lexington Corporate Properties, Inc.
(1993-1997); Consultant to Advisers Capital Management, Inc.
(1992-1995); Consultant on public and private pension funds
(1991-1993); President of Lepercq Realty Advisors (1988-1990). Member
of Advisory Council of Polytechnic University.
Age 75 October 1993 200
Lewis S. Ranieri*
Director Chairman and Chief Executive Officer of Ranieri & Co., Inc. (since
1988); in addition, President of LSR Hyperion Corp., a general partner
of the limited partnership that is the general partner of Hyperion
Partners L.P. ("Hyperion Partners") (since 1988). Director and Vice
Chairman of the Board of Hyperion Capital Management, Inc. (since
December 1998); Director and Chairman of the Board of Hyperion Capital
Management, Inc. (1989-November 1998); Chairman of the Board
(1989-December 1998) and/or Director (since 1989) of several investment
companies advised by Hyperion Capital Management, Inc. or by its
affiliates; Director and Chairman of Bank United Corp., and Director of
Bank United (since 1988); Director and President of Hyperion Funding
1993 Corp., the general partner of the limited partnership that is the
general partner of Hyperion 1993 Fund L.P.; and also Chairman and
President of various other direct and indirect subsidiaries of Hyperion
Partners (since 1989). Formerly, Director of Lend Lease Hyperion
Mortgage Opportunity Fund, Inc. (formerly, Equitable Real Estate
Hyperion Mortgage Opportunity Fund, Inc.) and Lend Lease Hyperion High
Yield Commercial Mortgage Fund, Inc. (formerly, Equitable Real Estate
Hyperion High Yield Commercial Mortgage Fund, Inc.) (1995-1999);
Formerly Vice Chairman of Salomon Brothers Inc. (until 1987).
Age 53 June 1989 -
Shares of Common
Stock
Beneficially
Owned Directly or
Indirectly, on
Name and Office Principal Occupation During Past Five Years, Director December 31,
with the Trust Other Directorships and Age Since 1999(**)
John W. English
Director, Member of the Chairman of the Board of HSBC's China Fund, Inc. (1993-Present), First
Audit Committee Asia Financial Services Ltd.'s First Asia Agri-industry Fund
(1999-Present), and State Street Bank's Select Sector SPDR Trust
(1999-Present). Director of A.L.T. Films, Inc. (1999-Present). Trustee
of Northern Trust Company's Institutional Funds (1993-Present). Trustee
of Washington Mutual's WM Group of Funds (1994-Present).
Age 66 September 1999 100
Class II Directors to serve until 2002 Annual Meeting of Stockholders:
Robert F. Birch
Director, Member of the Chairman and President, New America High Income Fund (1992-Present).
Audit Committee Chairman of the Board and Co-Founder, The China Business Group, Inc.
(1996-Present). Formerly, Director and Strategic Planning Consultant,
Dewe Rogerson, Ltd. (1994-1998); Chairman And Chief Executive Officer,
Memtek Corporation (1990-1991); Associated with Finn Wishengrad Warnke
& Gayton, a Consulting firm specializing in work-outs of financially
distressed companies (1988-1989); President and Chief Executive
Officer, Gardner and Preston Moss, Inc. (1969-1987).
Age 63 December 1998 1,000
Andrew M. Carter*
Director Chairman and Chief Executive Officer, Hyperion Capital Management, Inc.
(November 1998-Present). Vice Chairman and Director of The China
Business Group (1996-Present). Director, Manchester Capital Management
(1997-Present). Director, BioSignia (1999-Present). Presently officer
of four charitable boards: The New England Conservatory, The Loomis
Chaffee School, The William E. Simon Graduate School of Business
Administration at the University of Rochester, and The Big Brother
Association of Boston. Director of several investment companies
advised by Hyperion Capital Management, Inc. (1998-Present). Formerly
President and Founding Principal, Andrew M. Carter & Company
(1994-1995); Director and Senior Vice President, Jennison Associates
Capital Corp. (1975-1993); Founder, Standard & Poor's/Carter, Doyle
(1972-1975); Vice President, Head of Fixed Income Group, Wellington
Management Co. (1968-1972); and Manager of the Harvard Endowment bond
portfolio, Harvard Treasurer's Office (1964-1968).
Age 59 July 1998 -
Shares of Common
Stock
Beneficially
Owned Directly or
Indirectly, on
Name and Office Principal Occupation During Past Five Years, Director December 31,
with the Trust Other Directorships and Age Since 1999(**)
Leo M. Walsh, Jr.
Director, Chairman of Director and/or Trustee of several investment companies advised by
the Audit Committee Hyperion Capital Management, Inc. or by its affiliates (1989-Present).
Financial Consultant for Merck-Medco Managed Care LLC (formerly Medco
Containment Services Inc.) (1994-Present). Director of Lend Lease
Hyperion Mortgage Opportunity Fund, Inc. (formerly, Equitable Real
Estate Hyperion Mortgage Opportunity Fund, Inc.) and Lend Lease
Hyperion High Yield Commercial Mortgage Fund, Inc. (formerly, Equitable
Real Estate Hyperion High Yield Commercial Mortgage Fund, Inc.)
(1999-Present). Formerly, Director of Equitable Real Estate Hyperion
Mortgage Opportunity Fund, Inc. and Equitable Real Estate Hyperion High
Yield Commercial Mortgage Fund, Inc. (1995-1997); Financial Consultant
for Synetic Inc., manufacturer of porous plastic materials for health
care uses (1989-1994); President, WW Acquisitions Corp. (1989-1990);
Senior Executive Vice President and Chief Operating Officer of The
Equitable Life Assurance Society of the United States ("The Equitable")
(1986-1988); Director of The Equitable and Chairman of Equitable
Investment Corporation, a holding company for The Equitable's
investment oriented subsidiaries (1983-1988); Chairman and Chief
Executive Officer of EQUICOR-Equitable HCA Corporation (1987-1988).
Age 67 June 1989 6,000
Class I Directors to serve until 2001 Annual Meeting of Stockholders:
Rodman L. Drake
Director, Member of the President, Continuation Investments Group Inc. (1997-Present).
Audit Committee Director, Alliance Group Services, Inc. (1998-Present). Director,
Hotelevision, Inc. (1999-Present). Chairman, Metro Cash Card
International (1999-Present). Parsons Brinckerhoff, Inc.
(1995-Present). Trustee of Excelsior Funds (1994-Present). Director
and/or Trustee of several investment companies advised by Hyperion
Capital Management, Inc. (1989-Present). Formerly, Co-Chairman of KMR
Power Corporation (1993-1997); President, Mandrake Group (1993-1997);
Managing Director and Chief Executive Officer of Cresap (1980-1990).
Age 56 June 1992 204
Patricia A. Sloan*
Director, Secretary Managing Director of Ranieri & Co., Inc. (1988-Present). Secretary,
Director and/or Trustee of several investment companies advised by
Hyperion Capital Management, Inc. or by its affiliates (1989-Present).
Director of Bank United Corp., the parent of Bank United (formerly Bank
United of Texas FSB) (1988-Present). Formerly Director of the Financial
Institutions Group of Salomon Brothers Inc (1972-1988).
Age 56 February 1993 300
</TABLE>
* Interested persons as defined in the Investment Company Act of 1940,
as amended (the "1940 Act"), because of affiliations with Hyperion
Capital Management, Inc., the Trust's Investment Advisor.
** The holdings of no director or nominee represented more than 1% of
the outstanding shares of the Trust.
Officers of the Trust. The officers of the Trust are chosen each
year at the first meeting of the Board of Directors of the Trust following the
Annual Meeting of Stockholders, to hold office at the discretion of the Board
of Directors until the meeting of the Board following the next Annual Meeting
of Stockholders and until their successors are chosen and qualified. The
Board of Directors has elected six officers of the Trust. Except where dates
of service are noted, all officers listed below served as such throughout the
1999 fiscal year. The following sets forth information concerning each
officer of the Trust who served during all or part of the last fiscal year of
the Trust:
<TABLE>
<S> <C> <C> <C>
Name and
Principal Occupation Office Age Officer Since
Andrew M. Carter Chairman 59 December 1998
See information under "ELECTION OF DIRECTORS."
Clifford E. Lai President 46 April 1993
President (since November 1998) and Chief Investment Officer, Hyperion Capital
Management, Inc. (March 1993-Present). President of several investment
companies advised by Hyperion Capital Management, Inc. or by its affiliates
(1993-Present). Formerly Managing Director and Chief Investment Strategist for
Fixed Income, First Boston Asset Management (1989-1993); Vice President, Morgan
Stanley & Co. (1987-1989).
Patricia A. Botta Vice President 42 December 1996
Director of Hyperion Capital Management, Inc. (1989-Present). Formerly with
the Davco Group (1988-1989) and Salomon Brothers Inc. (1986-1988).
John H. Dolan Vice President 46 March 1998
Chief Investment Strategist of Hyperion Capital Management (1998-Present).
Formerly Managing Director at Bankers Trust (1995-1997); Managing Director of
Salomon Brothers Inc. (1987-1995); Manager of mortgage-backed securities desk
at Citibank (1979-1987).
Patricia A. Sloan
See information under "ELECTION OF DIRECTORS." Secretary 56 February 1993
Thomas F. Doodian Treasurer 40 February 1999
Director of Finance and Operations, Hyperion Capital Management, Inc. (July
1995-Present). Treasurer of several investment companies advised by Hyperion
Capital Management, Inc. (February 1999-Present). Formerly, Vice President in
Mortgage Backed Trading at Mabon Securities Corporation (1994-1995); fixed
income analyst, trader, and Vice President and Controller at Credit Suisse
First Boston (1984-1994).
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
Security Ownership of Certain Beneficial Owners at December 31, 1999
- ------------------- -------------------------------------------- ------------------------------- -------------------- --------------
Title of Name and Address of Amount and Nature of
Class Beneficial Owner Beneficial Ownership Percent of Class Source
- ------------------- -------------------------------------------- ------------------------------- -------------------- --------------
Common Karpus Investment Management 2,366,478 shares 13.89% 13D
Stock 14 Tobey Village Office Park
Pittsford, NY 14534
- ------------------- -------------------------------------------- ------------------------------- -------------------- --------------
</TABLE>
At December 31, 1999, directors and officers of the Trust as a group
owned beneficially less than 1% of the outstanding shares of the Trust. No
person, other than those listed above, to the knowledge of management, owned
beneficially more than 5% of the Trust's outstanding shares at that date. The
business address of the Trust, its officers and directors is One Liberty
Plaza, New York, New York 10006-1404.
Interested Persons. Mr. Ranieri serves as a Director of the Advisor
and Mr. Carter serves as Chairman and Chief Executive Officer of the Advisor.
Ms. Sloan is a special limited partner of Hyperion Ventures, the sole general
partner of Hyperion Partners L.P., of which the Advisor is a wholly-owned
subsidiary. As a result of their service with the Advisor and certain
affiliations with the Advisor as described below, the Trust considers
Messrs. Ranieri and Carter and Ms. Sloan to be "interested persons" of the
Trust within the meaning of Section 2(a)(19) of the 1940 Act.
Committees and Board of Directors Meetings. The Trust has a standing
Audit Committee presently consisting of Messrs. Walsh, Birch, Drake, English
and Petersen, all of whom are members of the Board of Directors and are
currently non-interested persons of the Trust. The principal functions of the
Trust's Audit Committee are to recommend to the Board the appointment of the
Trust's auditors, to review with the auditors the scope and anticipated costs
of their audit and to receive and consider a report from the auditors
concerning their conduct of the audit, including any comments or
recommendations they might want to make in that connection. During the last
fiscal year of the Trust, the full Board of Directors met four times, and the
Audit Committee met one time. All of the members of the Audit Committee,
except Mr. English, attended the Audit Committee meeting and all of the
directors attended at least 75% of the aggregate of the Board meetings and the
Audit Committee meeting. The Trust has a Nominating and a Compensation
Committee.
Compensation of Directors and Executive Officers. No remuneration
was paid by the Trust to persons who were directors, officers or employees of
Hyperion Capital Management, Inc. or any affiliate thereof for their services
as directors or officers of the Trust. Each director of the Trust, other than
those who are officers or employees of Hyperion Capital Management, Inc. or
any affiliate thereof, is entitled to receive a fee of $7,500 per year plus
$1,000 for each Board of Directors meeting attended. Members of the Audit
Committee receive $750 for each Audit Committee meeting attended, other than
meetings held on days when there is also a directors' meeting.
Directors' Compensation Table For The Twelve Month Period Ended 12/31/99
<TABLE>
<S> <C> <C>
Directors' Compensation Total Directors' Compensation
from the Trust from the Trust and the Fund
Complex
Robert F. Birch........................................................ $11,500 $43,125
Rodman Drake........................................................... $11,500 $43,125
John W. English........................................................ $ 2,875 $ 5,750
Harry E. Petersen, Jr.................................................. $11,500 $43,125
Leo M. Walsh, Jr....................................................... $11,500 $43,125
Kenneth C. Weiss....................................................... $11,500 $37,375
Garth Marston (Director Emeritus)...................................... $ 5,750 $21,563
$66,125 $237,188
</TABLE>
Required Vote
Election of the listed nominees for director requires the affirmative
vote of the holders of a majority of the shares of Common Stock of the Trust
present or represented by proxy at the Annual Meeting.
PROPOSAL 2: RATIFICATION OR REJECTION OF
SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors of the Trust will consider, and it is expected
that they will recommend, the selection of PricewaterhouseCoopers LLP as
independent accountants of the Trust for the fiscal year ending December 31,
2000 at a meeting scheduled to be held on March 7, 2000. The appointment of
accountants is approved annually by the Audit Committee of the Board of
Directors and is subsequently submitted to the stockholders for ratification
or rejection. The Trust has been advised by PricewaterhouseCoopers LLP that
at December 31, 1999 neither that firm nor any of its partners had any direct
or material indirect financial interest in the Trust. A representative of
PricewaterhouseCoopers LLP will be at the meeting to answer questions
concerning the Trust's financial statements and will have an opportunity to
make a statement if he or she chooses to do so.
Required Vote
Ratification of the selection of PricewaterhouseCoopers LLP as
independent accountants of the Trust requires the affirmative vote of the
holders of a majority of the outstanding shares of Common Stock of the Trust
present or represented by proxy at the Annual Meeting.
PROPOSAL 3: SHAREHOLDER PROPOSAL TO REQUEST
THE DIRECTORS OF THE TRUST TO IMMEDIATELY BEGIN THE
ORDERLY LIQUIDATION OF THE TRUST'S ASSETS
The Trust has been informed by Gilbert Held, 4736 Oxford Road, Macon,
Georgia 31210, a shareholder of record who owned approximately 1200 shares on
May 19, 1999 (the "Proponent"), that he intends to submit the following
proposal at the Meeting:
"For the past several years the share price of Hyperion 2005
Investment Grade Opportunity Term Trust has traded at a significant discount
to its net asset value. If the Trust was orderly liquidated, investors could
receive an immediate gain above the share market price. Thus, it is proposed
that shareholders vote to request the Directors of the Trust to immediately
begin the orderly liquidation of Trust assets. Directors should ensure the
assets of the Trust are liquidated and all proceeds are distributed to
shareholders within six months of the annual meeting."
THE BOARD OF DIRECTORS OF THE TRUST URGES YOU TO VOTE AGAINST THE
STOCKHOLDER PROPOSAL.
The Board of Directors recommends against an early termination of the
Trust. Although the Board of Directors shares the concerns about the discount
of the stock price to the Net Asset Value ("NAV") of the Trust, it is only one
of many factors it considers in maximizing the value of the Trust's shares.
The Board of Directors believes that the early termination of the Trust may
deprive investors of the opportunity to earn superior returns versus
comparable fixed income investments.
The following summarizes why the Board of Directors' STRONGLY
RECOMMENDS VOTING AGAINST the shareholder proposal.
1. As stated in the prospectus, the primary objective of the Trust
is to "provide a high level of current income and to return
$10.00 per Share to investors on or shortly before November 30,
2005, consistent with investing in investment grade
securities." The Trust will not achieve this objective if there
is an early termination of the Trust.
2. The Trust's shareholders will recover any discount between the
stock price and the NAV when the Trust matures in 2005. In
general, the discount between the stock price and the NAV on all
closed-end Term Trusts decreases as the maturity date
approaches.
The Trust is structured to terminate in 2005. In the Board of
Directors view, allowing the Trust to operate to its scheduled
maturity date offers the greatest opportunity to maximize
shareholder return. At maturity, in 2005, shareholders would
receive the full NAV of the Trust, not only capturing any
discount to the NAV, but also the accretion between the NAV and
book value of the Trust assets, which today is significant.
This accretion to book value would be lost were the Trust
liquidated before its maturity date.
3. The performance of the Trust versus comparable fixed income
strategies has been excellent.
Over the last 3 and 5 years, the Trust has been one of the top
performing strategies in the universe of fixed income
portfolios. The Board of Directors believes the Trust should
continue to generate excellent returns until its maturity in
2005. Over the last 3 and 5 years, the Trust has outperformed a
number of fixed income indices on both a stock price and NAV
basis, as the following table indicates.
<TABLE>
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------
Annualized Total Return of the Trust and Other Fixed Income Indices (12/31/99)
- -------------------------------------------------------------------------------------------
5-year 10-year Lehman Lehman
HTO Treasury Treasury Aggregate1 Govt/Corp2
Market Value Return
1 year -2.29% -2.49% -8.43% -0.83% -2.15%
3 years +8.94% +4.93% +4.77% +5.73% +5.54%
5 years +10.37% +6.72% +7.33% +7.73% +7.60%
NAV Return
1 year -0.83% -2.49% -8.43% -0.83% -2.15%
3 years +7.74% +4.93% +4.77% +5.73% +5.54%
5 years +10.06% +6.72% +7.33% +7.73% +7.60%
- ------------------------ ------------- ---------- ------------ ------------ ---------------
</TABLE>
As can be seen, the Trust has provided annualized total returns
in excess of 2.0% versus a range of fixed income strategies over
the last 3 and 5 years.
1 The Lehman Brothers Aggregate Index represents securities that are U.S.
domestic, taxable and dollar denominated. The index covers the U.S.
investment grade fixed rate bond market, with index components for government
and corporate securities, mortgage pass-through securities, and asset-backed
securities. These major sectors are subdivided into more specific indices
that are calculated and reported on a regular basis. (Source: Lehman Brothers,
Inc.)
2 The Lehman Brothers Government/Corporate Index includes securities in the
Government and Corporate indices. The Government Index includes treasuries
(i.e., public obligations of the U.S. Treasury that have remaining maturities
of more than one year) and agencies (i.e., publicly issued debt of U.S.
Government agencies, quasi-federal corporations, and corporate or foreign debt
guaranteed by the U.S. Government). The Corporate Index includes publicly
issued U.S. corporate and Yankee debentures and secured notes that meet
specified maturity, liquidity, and quality requirements. (Source: Lehman
Brothers, Inc.)
Additionally, the Trust's returns over the last three and five
years rank in the top 5 percent (5%) of the universe of all
fixed income funds, according to the most recently available
Nelson's directory. While past performance is not an indication
of future performance, the investment advisor has thus far done
an excellent job in managing the Trust's assets and the Board of
Directors has every confidence that it will continue to do so in
the future.
4. The Trust has benefited from the professional management of the
investment advisor. Without taking additional levels of risk,
it would be difficult for an individual investor to replicate
the future expected return of the Trust.
5. Finally, the Trust offers investors the opportunity to
participate in certain asset classes, such as Agency and
non-Agency Mortgage-Backed Securities, Commercial
Mortgage-Backed Securities, and Asset-Backed Securities, that
offer higher yield versus comparable securities with similar
risk profiles and that are not normally available to the fixed
income investor.
In summary, the Board of Directors strongly recommends voting against
the stockholder proposal. Early termination of the Trust will prevent the
Trust from achieving its primary objective and prevent shareholders from
benefiting from the full implementation of the Trust's investment strategy.
Required Vote
The affirmative vote of the holders of a majority of the shares
outstanding and entitled to vote at the Meeting is required for the approval
of the shareholder proposal.
ADDITIONAL INFORMATION
Investment Advisor
The Trust has engaged Hyperion Capital Management, Inc. (the
"Advisor") to provide professional investment management for the Trust pursuant
to an Advisory Agreement dated February 17, 1993. The Advisor is a Delaware
corporation which was organized in February 1989. The Advisor is a registered
investment advisor under the Investment Advisers Act of 1940, as amended
("1940 Act"). The business address of the Advisor, its officers, and directors
is One Liberty Plaza, New York, New York 10006-1404. The Trust has also
engaged Hyperion Capital Management, Inc. as the Trust's administrator. The
administrator's address is the same as that of the Advisor.
The Advisor is a subsidiary of Hyperion Partners L.P., a Delaware
limited partnership ("Hyperion Partners"). The sole general partner of
Hyperion Partners is Hyperion Ventures L.P., a Delaware limited partnership
("Hyperion Ventures"). Corporations owned principally by Lewis S. Ranieri,
Salvatore A. Ranieri and Scott A. Shay are the general partners of Hyperion
Ventures. Lewis S. Ranieri, a former Vice Chairman of Salomon Brothers Inc
("Salomon Brothers"), is the Vice Chairman of the Board of the Advisor and a
Director of the Trust. Messrs. Salvatore Ranieri and Shay are directors of the
Advisor, but have no other positions with either the Advisor or the Trust.
Messrs. Salvatore Ranieri and Shay are principally engaged in the management
of the affairs of Hyperion Ventures and its affiliated entities. Mr. Carter
is the Chairman and Chief Executive Officer of the Advisor and Chairman of the
Trust. Since January 1, 1990, Patricia A. Sloan, Secretary of the Trust, has
been a special limited partner of Hyperion Ventures and since July 1993 she
has been a limited partner of Hyperion Partners. Mr. Lai, the President of
the Trust and the Advisor, is an employee of the Advisor, and may be entitled,
in addition to receiving a salary from the Advisor, to receive a bonus based
upon a portion of the Advisor's profits, including any profit from a sale of
the Advisor. Ms. Botta and Mr. Dolan, Vice Presidents of the Trust, and Mr.
Doodian, Treasurer of the Trust, are also employees of the Advisor. The
business address of Hyperion Partners and Hyperion Ventures is 50 Charles
Lindbergh Boulevard, Suite 500, Uniondale, New York 11553.
The Advisor provides advisory services to several other registered
investment companies and one offshore Trust, all of which invest in
mortgage-backed securities. Its management includes several individuals with
extensive experience in creating, evaluating and investing in Mortgage-Backed
Securities, Derivative Mortgage-Backed Securities and Asset-Backed Securities,
and in using hedging techniques. Lewis S. Ranieri, Vice Chairman of the
Advisor and a Director of the Trust, was instrumental in the development of
the secondary mortgage-backed securities market and the creation and
development of secondary markets for conventional mortgage loans, CMOs and
other mortgage-related securities. While at Salomon Brothers, Mr. Ranieri
directed that firm's activities in the mortgage, real estate and government
guaranteed areas. Mr. Carter is the Chairman and Chief Executive Officer of
the Advisor and Chairman of the Trust, and is Vice Chairman of The China
Business Group. Clifford E. Lai, President of the Advisor and of the Trust,
was Managing Director and Chief Investment Strategist for Fixed Income for
First Boston Asset Management Corporation.
Investment Advisory Agreement
On March 9, 1999, the Board of Directors of the Trust, including
those persons identified as interested persons and a majority of the directors
who are not parties to the Advisory Agreement or interested persons (as such
term is defined in the 1940 Act) of any such party (the "Disinterested
Directors"), approved extension of the Advisory Agreement through March 31,
2000. At the time of the Board's approval of the latest extension of the
Advisory Agreement, Messrs. Lewis Ranieri, Carter and Ms. Sloan were
interested persons of the Trust. The Advisory Agreement was last submitted to
a vote of the Stockholders of the Trust at the Annual Meeting of the
Stockholders of the Trust held on May 23, 1995. At that meeting, the
Stockholders approved the continuance of the revised Advisory Agreement. The
Advisory Agreement provides that it will continue from year to year, but only
so long as such continuation is specifically approved at least annually by
both (1) the vote of a majority of the Board of Directors or the vote of a
majority of the outstanding voting securities of the Trust (as provided in the
1940 Act) and (2) by the vote of a majority of the Disinterested Directors
cast in person at a meeting called for the purpose of voting on such approval.
The Advisory Agreement may be terminated at any time without the payment of
any penalty, upon the vote of a majority of the Board of Directors or a
majority of the outstanding voting securities of the Trust or by the Advisor,
on 60 days' written notice by either party to the other. The Agreement will
terminate automatically in the event of its assignment (as such term is
defined in the 1940 Act and the rules thereunder). The Board of Directors
will consider continuance of the Advisory Agreement until March 31, 2001 at a
meeting scheduled for March 7, 2000.
Pursuant to the Advisory Agreement, the Trust has retained the
Advisor to manage the investment of the Trust's assets and to provide such
investment research, advice and supervision, in conformity with the Trust's
investment objective and policies, as may be necessary for the operations of
the Trust.
The Advisory Agreement provides, among other things, that the Advisor
will bear all expenses of its employees and overhead incurred in connection
with its duties under the Advisory Agreement, and will pay all salaries of the
Trust's directors and officers who are affiliated persons (as such term is
defined in the 1940 Act) of the Advisor. The Advisory Agreement provides that
the Trust shall pay to the Advisor a monthly fee for its services which is
equal to .65% per annum of the Trust's average weekly net assets, which, for
purposes of determining the Advisor's fee, shall be the average weekly value
of the total assets of the Trust, minus the sum of accrued liabilities
(including accrued expenses) of the Trust and any declared but unpaid
dividends on the Common Shares and any Preferred Shares (if such shares are
issued in the future) and any accumulated dividends on any Preferred Shares
(but without deducting the aggregate liquidation value of any Preferred
Shares). Investment advisory fees paid by the Trust to the Advisor during the
last fiscal year of the Trust amounted to $1,044,715.
Administration Agreement
The Trust has entered into an Administration Agreement with Hyperion
Capital Management, Inc. (the "Administrator"). The Administrator performs
administrative services necessary for the operation of the Trust, including
maintaining certain books and records of the Trust, and preparing reports and
other documents required by federal, state, and other applicable laws and
regulations, and provides the Trust with administrative office facilities.
For these services, the Trust pays a monthly fee at an annual rate of 0.17% of
the first $100 million of the Trust's average weekly net assets, 0.145% of the
next $150 million and 0.12% of any amounts above $250 million. For the twelve
month period ended December 31, 1999, the Administrator earned $258,052 in
Administration fees. In addition, the Administrator has entered into
Administration Agreements with the other investment companies listed below,
generally under the same fee structure as noted above. The only exception is
the fee structure for services rendered to The Hyperion Total Return Fund,
Inc., which stipulates a fee paid monthly at an annual rate of 0.20% of its
average weekly assets.
Investment Companies Managed by Hyperion Capital Management, Inc.
In addition to acting as advisor to the Trust, Hyperion Capital
Management, Inc. acts as investment advisor to the following other investment
companies at the indicated annual compensation.
<TABLE>
<S> <C> <C>
Name of Fund Investment Advisory Fee Approximate Net Assets at December
31, 1999
(in Millions)
The Hyperion Total Return Fund, Inc.* 0.65% of the Fund's average weekly net assets $209,076
Hyperion 1999 Term Trust, Inc.** 0.50% of the Trust's average weekly net assets $ 0
Hyperion 2002 Term Trust, Inc. 0.50% of the Trust's average weekly net assets $268,803
</TABLE>
* The Advisor and The Hyperion Total Return Fund, Inc. (the "Fund") have
entered into a sub-advisory agreement with Pacholder Associates, Inc., an Ohio
corporation organized in 1983, to serve as an investment advisor with respect
to a portion of this Fund's assets.
**Hyperion 1999 Term Trust, Inc. was terminated on November 30, 1999.
Brokerage Commissions
Because it buys its portfolio securities in dealer markets, the Trust
did not pay any brokerage commissions on its securities purchases during its
last fiscal year. The Trust did not pay any futures or options commissions
during the last fiscal year.
The Advisor has discretion to select brokers and dealers to execute
portfolio transactions initiated by the Advisor and to select the markets in
which such transactions are to be executed. The Advisory Agreement provides,
in substance, that in executing portfolio transactions and selecting brokers
or dealers, the primary responsibility of the Advisor is to seek the best
combination of net price and execution for the Trust. It is expected that
securities will ordinarily be purchased in primary markets, and that in
assessing the best net price and execution available to the Trust, the Advisor
will consider all factors they deem relevant, including the price, dealer
spread, the size, type and difficulty of the transaction involved, the firm's
general execution and operation facilities and the firm's risk in positioning
the securities involved. Transactions in foreign securities markets may
involve the payment of fixed brokerage commissions, which are generally higher
than those in the United States.
In selecting brokers or dealers to execute particular transactions
and in evaluating the best net price and execution available, the Advisor is
authorized to consider "brokerage and research services" (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934). The Advisor
is also authorized to cause the Trust to pay to a broker or dealer who
provides such brokerage and research services a commission for executing a
portfolio transaction which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction. The
Advisor must determine in good faith, however, that such commission was
reasonable in relation to the value of the brokerage and research services
provided, viewed in terms of that particular transaction or in terms of all
the accounts over which the Advisor exercises investment discretion. Research
services furnished by brokers through whom the Trust effects securities
transactions may be used by the Advisor in servicing all of the accounts for
which investment discretion is exercised by the Advisor, and not all such
services may be used by the Advisor in connection with the Trust.
Compliance With Section 16 Reporting Requirements
Section 16(a) of the Securities Exchange Act of 1934 requires the
Trust's officers and directors and persons who own more than ten percent of a
registered class of the Trust's equity securities to file reports of ownership
and changes in ownership with the Securities and Exchange Commission and the
New York Stock Exchange. Officers, directors and greater than ten-percent
shareholders are required by SEC regulations to furnish the Trust with copies
of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by
the Trust and written representations from certain reporting persons that all
applicable filing requirements for such persons had been complied with, the
Trust believes that, during the fiscal year ended December 31, 1999, all
filing requirements applicable to the Fund's officers, directors, and greater
than ten-percent beneficial owners were complied with.
OTHER BUSINESS
The Board of Directors of the Trust does not know of any other matter
which may come before the meeting. If any other matter properly comes before
the meeting, it is the intention of the persons named in the proxy to vote the
proxies in accordance with their judgment on that matter.
PROPOSALS TO BE SUBMITTED BY STOCKHOLDERS
All proposals by stockholders of the Trust that are intended to be
presented at the Trust's next Annual Meeting of Stockholders to be held in
2001 must be received by the Trust for inclusion in the Trust's proxy
statement and proxy relating to that meeting no later than November 1, 2000.
EXPENSES OF PROXY SOLICITATION
The cost of preparing, assembling and mailing material in connection
with this solicitation of proxies will be borne by the Trust. In addition to
the use of the mails, proxies may be solicited personally by regular employees
of the Trust, Hyperion Capital Management, Inc., or Corporate Investor
Communications Inc., paid solicitors for the Trust, or by telephone or
telegraph. The anticipated cost of solicitation by the paid solicitors will
be nominal. The Trust's agreement with Corporate Investor Communications, Inc.
provides that such paid solicitors will perform a broker search and deliver
proxies in return for the payment of their fee plus the expenses associated
with this proxy solicitation. Brokerage houses, banks and other fiduciaries
will be requested to forward proxy solicitation material to their principals
to obtain authorization for the execution of proxies, and they will be
reimbursed by the Trust for out-of-pocket expenses incurred in this connection.
February 25, 2000
HYPERION 2005 INVESTMENT GRADE OPPORTUNITY
TERM TRUST, INC.
PROXY SOLICITED ON BEHALF OF THE DIRECTORS
The undersigned hereby appoints Andrew M. Carter and Clifford E. Lai,
and each of them, attorneys and proxies for the undersigned, with full power
of substitution and revocation to represent the undersigned and to vote on
behalf of the undersigned all shares of Hyperion 2005 Investment Grade
Opportunity Term Trust, Inc. (the "Trust") which the undersigned is entitled
to vote at the Annual Meeting of Stockholders of the Trust to be held at The
Downtown Association, 60 Pine Street (between William and Pearl Streets), New
York, New York 10005, on Tuesday, April 18, 2000 at 10:30 a.m., and at any
adjournments thereof. The undersigned hereby acknowledges receipt of the
Notice of Meeting and accompanying Proxy Statement and hereby instructs said
attorneys and proxies to vote said shares as indicated hereon. In their
discretion, the proxies are authorized to vote upon such other business as may
properly come before the Meeting. A majority of the proxies present and
acting at the Meeting in person or by substitute (or, if only one shall be so
present, then that one) shall have and may exercise all of the power of
authority of said proxies hereunder. The undersigned hereby revokes any proxy
previously given.
NOTE: Please sign exactly as your name
appears on the Proxy. If joint
owners, EITHER may sign this
Proxy. When signing as attorney,
executor, administrator, trustee,
guardian or corporate officer,
please give full title.
Date, 2000
Signature(s), (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN THE ENCLOSED ENVELOPE
I PLAN DO NOT PLAN TO ATTEND THE ANNUAL MEETING OF STOCKHOLDERS ON April 18,
2000
Please indicate your vote by an "X" in the appropriate box below.
This Proxy, if properly executed, will be voted in the manner directed by the
stockholder. If no direction is made, this Proxy will be voted FOR election
of the nominees as Directors in Proposal 1, FOR Proposal 2 and AGAINST
Proposal 3. Please refer to the Proxy Statement for a discussion of the
Proposals.
1. ELECTION OF DIRECTORS: FOR all nominees listed (except
as marked to the contrary below)
WITHHOLD authority to vote for
all nominees
Class III:
Harry E. Petersen, Jr.
Lewis S. Ranieri
John W. English
The Board of Directors recommends that you vote "FOR" all nominees.
(Instruction: To withhold authority to vote for any individual nominee(s),
write the name(s) of the nominee(s) on the line below.)
2. Ratification or rejection of the
selection of independent accountants
(a vote "FOR" is a vote for ratification) FOR AGAINST ABSTAIN
The Board of Directors recommends that you vote "FOR" Proposal 2.
3. Shareholder proposal to request the Directors
of the Trust to immediately begin the orderly
liquidation of the Trust's assets. FOR AGAINST ABSTAIN
The Board of Directors recommends that you vote "AGAINST" Proposal 3.
PLEASE SIGN AND DATE THIS PROXY ON THE REVERSE SIDE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE.
Report of Independent Accountants
To the Board of Directors and Shareholders of
Hyperion 2005 Investment Grade Opportunity Term Trust, Inc.
In planning and performing our audit of the financial statements of Hyperion
2005 Investment Grade Opportunity Term Trust, Inc. (the "Fund") for the year
ended December 31, 1999, we considered its internal control, including
control activities for safeguarding securities, in order to determine our
auditing procedures for the purpose of expressing our opinion on the financial
statements and to comply with the requirements of Form N-SAR, not to provide
assurance on internal control.
The management of the Fund is responsible for establishing and maintaining
internal control. In fulfilling this responsibility, estimates and judgments
by management are required to assess the expected benefits and related costs
of controls. Generally, controls that are relevant to an audit pertain to the
entity's objective of preparing financial statements for external purposes
that are fairly presented in conformity with generally accepted accounting
principles. Those controls include the safeguarding of assets against
unauthorized acquisition, use or disposition.
Because of inherent limitations in internal control, error or fraud may occur
and not be detected. Also, projection of any evaluation of internal control
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 internal control would not necessarily disclose all
matters in internal control 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 one or
more of the internal control components does not reduce to a relatively low
level the risk that misstatements caused by error or fraud 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 internal control and its operation, including controls for
safeguarding securities, that we consider to be material weaknesses as defined
above as of December 31, 1999.
This report is intended solely for the information and use of management and
the Board of Directors of the Fund and the Securities and Exchange Commission,
and is not intended to be and should not be used by anyone other than these
specified parties.
PricewaterhouseCoopers LLP
New York, NY 10036
February 23, 2000
HYPERION 2005 INVESTMENT GRADE OPPORTUNITY TERM TRUST, INC.
(the "Registrant") Form N-SAR for the period ending December 31, 1999
File Number 811-07386
This report is signed on behalf of the Registrant in the City of New
York and the State of New York on the 28th day of February, 2000.
HYPERION 2005 INVESTMENT GRADE
OPPORTUNITY TERM TRUST, INC.
By: /s/ Clifford E. Lai
Clifford E. Lai
President
Witness: /s/ Joseph Tropeano
Joseph Tropeano
Assistant Secretary
