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001 A000000 THE SHORT TERM BOND PORTFOLIO
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022 C000003 264840
022 D000003 182603
022 A000004 MORGAN STANLEY DEAN WITTER
022 C000004 194797
022 D000004 181348
022 A000005 GREENWICH CAPITAL
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022 A000006 CS FIRST BOSTON
022 C000006 128111
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<PAGE> PAGE 2
022 A000007 MERRILL LYNCH
022 C000007 61174
022 D000007 54465
022 A000008 PAINE WEBER INC
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022 D000008 53844
022 A000009 HSBC INVESTMENT BANK PLC
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022 C000010 36176
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<PAGE> PAGE 3
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<PAGE> PAGE 4
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<PAGE> PAGE 5
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SIGNATURE GEORGE A. RIO
TITLE ASST TREASURER
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial data extracted from the
annual report dated October 31, 1999 for the Short Term Bond Portfolio and is
qualified in its entirety by reference to such annual report.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1999
<PERIOD-END> OCT-31-1999
<INVESTMENTS-AT-COST> 448863
<INVESTMENTS-AT-VALUE> 446752
<RECEIVABLES> 4366
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<REALIZED-GAINS-CURRENT> (3791)
<APPREC-INCREASE-CURRENT> (3930)
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<NET-CHANGE-IN-ASSETS> 129338756
<ACCUMULATED-NII-PRIOR> 0
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[AVG-DEBT-OUTSTANDING] 0
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</TABLE>
2
Report of Independent Accountants
To the Trustees and Investors of
The Short Term Bond Portfolio
In planning and performing our audit of the financial statements of The Short
Term Bond Portfolio (the "Portfolio") for the year ended October 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 Portfolio 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, errors 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 controls may become inadequate
because of changes in conditions or that the effectiveness of their 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
October 31, 1999.
This report is intended solely for the information and use of the Trustees,
management and the Securities and Exchange Commission and is not intended to be
and should not be used by anyone other than these specified parties.
December 17, 1999
TRANSACTIONS SUBJECT TO RULE 10f-3 PROCEDURES
Portfolio: Short Term Bond Portfolio Security Description: Floating Rate
Senior Notes
Issuer: Associates Corp of North America FRN due 6/14/01
Type: U S Registered (US Registered,
Eligible Muni, Eligible Foreign,
Eligible 144A)
<TABLE>
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
In Compliance
REQUIRED INFORMATION ANSWER APPLICABLE RESTRICTION (Yes/No)
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
- -------- ------------------------------------------- ---------------- --------------------------------------
<S> <C> <C>
1. Offering Date June 9, 1999 N/A
2. Trade Date June 9, 1999 Must be the same as #1 Yes
------------ ---
3. Unit Price of Offering 100.00% None N/A
------- ---
4. Price Paid per Unit 100.00% Must not exceed #3 Yes
------- ---
5. Years of Issuer's Operations 6 Must be at least three years * Yes
- ---
6. Underwriting Type Firm Must be firm Yes
7. Underwriting Spread .10% Investment Adviser determination to Yes
---- ---
be made
8. Total Price paid by Portfolio $5,000,0000 None N/A
----------- ---
9. Total Size of Offering $1,000,000,000 None N/A
-------------- ---
10. Total Price Paid by Portfolio plus Total #10 divided by #9 must not exceed
Price Paid for same securities purchased 25% ** Yes
by the same investment adviser for other $5,000,000 ---
investment companies ----------
11. Underwriter(s) from whom the Portfolio
purchased (attach a prospectus or Credit Suisse Must not include Investment Adviser
offering circular for a list of all First Boston affiliates *** Yes
syndicate members)
12. If the affiliate was lead or co-lead N/A
manager, was the instruction listed below Must be "Yes" or "N/A" N/A
given to the broker(s) named in #11? ****
- -------- ------------------------------------------- ---------------- -------------------------------------- -----------------
</TABLE>
The Investment Adviser has no reasonable cause to believe that the underwriting
commission, spread or profit is NOT reasonable and fair compared to
underwritings of similar securities during a comparable period of time. In
determining which securities are comparable, the Investment Adviser has
considered the factors set forth in the Portfolio's 10f-3 procedures.
* Not applicable to munis. In the case of munis, (i) the issue must have
one investment grade rating or (ii) if the issuer or the revenue source
has been in operation for less than three years, the issue must have
one of the three highest ratings. Circle (i) or (ii), whichever is met.
** If an eligible Rule 144A offering, must not exceed 25% of the total
amount of same class sold to QIBs in the Rule 144A offering PLUS the
amount of the offering of the same class in any concurrent public
offering
*** For munis purchased from syndicate manager, check box to confirm that the
purchase was not designated as a group sale. [ ]
**** No credit for the purchase made for the Portfolio can be credited to the
Investment Adviser's affiliate.
