LIMITED TERM TAX EXEMPT BOND FUND OF AMERICA, DEF 14A, 1999-10-14

LIMITED TERM TAX EXEMPT BOND FUND OF AMERICA
DEF 14A, 1999-10-14

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(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant /X/
Filed by a Party other than the Registrant / /

CHECK THE APPROPRIATE BOX:
/ / Preliminary Proxy Statement
/X / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
/ / Confidential, for use of the Commission only (Rule 14a-6(e)(2))

Limited Term Tax-Exempt Bond Fund of America
(Name of Registrant as Specified In Its Charter)
Julie F. Williams
(Name of Person(s) Filing Proxy Statement)

PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11

1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filling fee is
calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:

/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number of
the Form or Schedule and the date of its filing.

1) Amount Previously paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:

<PAGE>

LIMITED TERM TAX-EXEMPT BOND FUND OF AMERICA

333 South Hope Street, Los Angeles, California 90071

------------------------------

Fellow Shareholders:

We are writing to inform you of the upcoming meeting of the shareholders of
Limited Term Tax-Exempt Bond Fund of America (the "Fund") to be held at the
offices of The Capital Group Companies, Inc., 11100 Santa Monica Boulevard, 15th
Floor, Los Angeles, California, on Wednesday, December 1, 1999 at 11:00 a.m.,
local time (the "Meeting"). At this meeting, you are being asked to vote on
important proposals affecting the Fund. THE BOARD OF TRUSTEES OF THE FUND
BELIEVES THAT THESE PROPOSALS ARE IN THE BEST INTERESTS OF THE FUND AND ITS
SHAREHOLDERS, AND UNANIMOUSLY RECOMMENDS THAT YOU APPROVE ALL PROPOSALS
PRESENTED FOR YOUR CONSIDERATION.

At the Meeting, you will be asked to vote on:

1. The election of a Board of 10 Trustees (Proposal 1).

2. A proposal to eliminate certain of the Fund's investment restrictions
(Proposal 2).

3. The ratification of the selection, by the Board of Trustees, of
PricewaterhouseCoopers LLP as independent accountants for the Fund for
the fiscal year 2000 (Proposal 3).

4. Any other business that may come before the Meeting (we are not
currently aware of any other items to be considered).

Some key points about Proposal 2 are described below. The proposal is
described in more detail in the full text of the Proxy Statement which you
should read before you vote.

ABOUT PROPOSAL 2:

Because the Fund was formed a number of years ago, it is subject to certain
investment restrictions that do not reflect current conditions, practices or
legal requirements. Two restrictions, although described as "fundamental"
because they require shareholder approval to modify, were originally adopted in
response to state regulation that no longer applies to the Fund. Accordingly, we
believe the restrictions should be eliminated to reflect current standards. You
may vote for any or all of the changes that are the subject of Proposal 2 by so

[43-LTEX]

<PAGE>

indicating on your Proxy card. THIS PROPOSAL WILL NOT AFFECT THE FUND'S
INVESTMENT OBJECTIVE, WHICH REMAINS UNCHANGED. MOREOVER, THE BOARD DOES NOT
ANTICIPATE THAT THESE CHANGES WILL INCREASE TO A MATERIAL DEGREE THE LEVEL OF
INVESTMENT RISK ASSOCIATED WITH AN INVESTMENT IN THE FUND.

THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU VOTE TO APPROVE THIS
PROPOSAL.

* * *

We are sure that you, like most people, lead a busy life and are tempted to
put this Proxy aside for another day. Please don't delay. When shareholders do
not return their Proxies, additional expenses are incurred to pay for follow-up
mailings and telephone calls.

PLEASE TAKE A FEW MINUTES TO REVIEW THIS PROXY STATEMENT AND SIGN AND
RETURN THE ENCLOSED PROXY CARD TODAY. YOU MAY ALSO VOTE YOUR PROXY BY TELEPHONE
OR THE INTERNET BY FOLLOWING INSTRUCTIONS THAT APPEAR ON THE ENCLOSED PROXY
INSERT. Please be sure to sign and return each Proxy card regardless of how many
you receive.

If you have any questions regarding the issues to be voted on or need
assistance in completing your Proxy card, please contact us at (800) 421-0180.
Thank you for investing with us and for your continuing support.

Sincerely,

/s/ PAUL G. HAAGA, JR. /s/ ABNER D. GOLDSTINE
Paul G. Haaga, Jr. Abner D. Goldstine
Chairman of the Board President
</TABLE>

<PAGE>

LIMITED TERM TAX-EXEMPT BOND FUND OF AMERICA
------------------------------

NOTICE OF MEETING OF SHAREHOLDERS
DECEMBER 1, 1999
------------------------------

TO THE SHAREHOLDERS OF
LIMITED TERM TAX-EXEMPT BOND FUND OF AMERICA:

A Meeting of Shareholders of Limited Term Tax-Exempt Bond Fund of America
(the "Fund") will be held at the offices of The Capital Group Companies, Inc.,
11100 Santa Monica Boulevard, 15th Floor, Los Angeles, California, on Wednesday,
December 1, 1999 at 11:00 A.M., local time, to consider and vote on the
following matters described under the corresponding numbers in the accompanying
Proxy Statement:

(1) election of a Board of 10 Trustees;

(2) approval of the elimination of certain of the Fund's fundamental
investment policies;

(3) ratification of the selection of PricewaterhouseCoopers LLP as the
independent accountant for the Fund for the fiscal year 2000; and

(4) such other matters as may properly come before the meeting.

You are entitled to vote if you held shares of the Fund at the close of
business on September 3, 1999.

<PAGE>

THE PROPOSED BUSINESS CANNOT BE CONDUCTED AT THE MEETING UNLESS THE HOLDERS
OF A MAJORITY OF THE SHARES OF THE FUND OUTSTANDING ON THE RECORD DATE ARE
PRESENT IN PERSON OR BY PROXY. THEREFORE, PLEASE MARK, DATE, SIGN AND RETURN THE
ENCLOSED PROXY, WHICH IS SOLICITED BY THE BOARD OF TRUSTEES. THE PROXY IS
REVOCABLE AND WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE
MEETING.

By order of the Board of Trustees,

JULIE F. WILLIAMS
Secretary

October 12, 1999

IMPORTANT

YOU CAN HELP THE FUND AVOID THE NECESSITY AND EXPENSE OF SENDING FOLLOW-UP
LETTERS TO ENSURE A QUORUM BY PROMPTLY RETURNING THE ENCLOSED PROXY. PLEASE
MARK, DATE, SIGN AND RETURN THE ENCLOSED PROXY SO WE HAVE A QUORUM AT THE
MEETING. THE ENCLOSED ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES. YOU MAY ALSO VOTE BY TELEPHONE OR THE INTERNET BY FOLLOWING INSTRUCTIONS
THAT APPEAR ON THE ENCLOSED PROXY INSERT.

<PAGE>

LIMITED TERM TAX-EXEMPT BOND FUND OF AMERICA

333 South Hope Street, Los Angeles, California 90071
------------------------------

PROXY STATEMENT
MEETING OF SHAREHOLDERS
DECEMBER 1, 1999
------------------------------

The enclosed Proxy is solicited by the Board of Trustees of the Fund in
connection with the Meeting of Shareholders to be held on Wednesday, December 1,
1999. Every Proxy returned in time to be voted at the meeting will be voted and,
if you specify how to vote on any proposal, the Proxy will be voted accordingly.
Unless you specify otherwise, the Proxy will be voted in favor of the proposal.
You can revoke a Proxy prior to its exercise, either by filing with the Fund a
written notice of revocation, by delivering a duly executed Proxy bearing a
later date, or by attending the meeting and voting in person. This Proxy was
first mailed to shareholders on or about October 12, 1999.

At the close of business on September 3, 1999, the record date fixed by the
Board of Trustees for the determination of shareholders entitled to notice of
and to vote at the meeting, there were outstanding 19,117,262 shares of
beneficial interest, the only authorized class of voting securities of the Fund
(the "Shares"). Each Share is entitled to one vote. There is no provision for
cumulative voting. No person owned of record or was known by the Fund to own
beneficially 5% or more of the outstanding Shares of the Fund.

With respect to the election of Trustees (Item 1), the 10 nominees
receiving the highest number of votes will be elected. The vote required to
approve Item 2 is the affirmative vote of the lesser of (a) 67% or more of all
Shares present and entitled to vote at the meeting, provided the holders of more
than 50% of all outstanding Shares are present or represented by proxy, or (b)
more than 50% of all outstanding Shares on the record date. The vote required to
approve Item 3 is the affirmative vote of a majority of the Shares present or
represented by Proxy.

If sufficient votes are not received by the meeting date, a person named as
proxy may propose one or more adjournments of the meeting for up to 120 days in
the aggregate to permit further solicitation of Proxies. The persons named as
proxies may vote all Proxies in favor of such adjournment. Signed but unmarked
Proxies will be voted for the Trustees nominated below and in favor of all
proposals. Shareholders who return Proxies marked as abstaining from voting on
one or more proposals are treated as being present at the meeting for purposes
of obtaining the quorum necessary to hold the meeting, but are not counted as
part of the vote necessary to approve the proposal(s). If brokers holding Shares
for their customers in Street Name have not received instruc-

<PAGE>

tions and are not authorized to vote without instruction, those Shares also will
be treated as abstentions.

1. ELECTION OF TRUSTEES

Ten Trustees are to be elected at the meeting, each to hold office until
their resignation or removal and until a successor is elected and qualified.
Because we do not expect meetings of shareholders to be held each year, the
Trustees' terms will be indefinite in length. All of the nominees for Trustee
except Richard G. Capen, Jr., Don R. Conlan, Diane C. Creel, Leonard R. Fuller
and Frank M. Sanchez were elected by the sole shareholder, Capital Research and
Management Company, at the Special Meeting on September 23, 1993. Diane C. Creel
and Leonard R. Fuller were elected by the Trustees on September 22, 1994; Don R.
Conlan was elected by the Trustees effective December 16, 1996. Richard G.
Capen, Jr. and Frank M. Sanchez have been nominated by the Trustees. Herbert
Hoover III, a Trustee since 1993, has reached the Fund's retirement age and is
not seeking re-election.

Each of the nominees has agreed to serve as Trustee if elected. If, due to
presently unforeseen circumstances, any nominee is not available for election,
the persons named as proxies will vote the signed but unmarked Proxies and those
marked for the nominated Trustees for such other nominee as the present Trustees
may recommend. The table below sets forth certain information regarding the
nominees.

MEMBERSHIPS ON BOARD
NAME OF NOMINEE CURRENT PRINCIPAL OCCUPATION AND YEAR FIRST OF OTHER REGISTERED INVESTMENT
(POSITION WITH FUND) PRINCIPAL EMPLOYMENT ELECTED A COMPANIES AND PUBLICLY
AND AGE DURING PAST FIVE YEARS TRUSTEE HELD COMPANIES
-------------------- -------------------------------- ---------- ------------------------------
<S> <C> <C> <C>
Richard G. Capen, Jr. Corporate Director and author; former Nominee The American Funds Group:
(Nominee) United States Ambassador to Spain; (Director/Trustee -- 5 other funds)
63 former Vice Chairman of the Board,
Knight Ridder, Inc.; former Chairman
and Publisher, The Miami Herald
H. Frederick Christie Private investor. Former President 1993 The American Funds Group:
(Trustee) and Chief Executive Officer, The (Director/Trustee -- 18 other funds)
66 Mission Group (non-utility holding The American Variable Insurance
company, subsidiary of Southern Series
California Edison Company)
Don R. Conlan* President (retired), The Capital 1996 The American Funds Group:
(Trustee) Group Companies, Inc. (Director/Trustee -- 11 other funds)
63
Diane C. Creel CEO and President, The Earth 1994 The American Funds Group:
(Trustee) Technology Corporation (Director/Trustee -- 11 other funds)
50 (international consulting Allegheny Teledyne Incorporated
engineering) B. F. Goodrich
Martin Fenton Chairman, Senior Resource Group, LLC 1993 The American Funds Group:
(Trustee) (development and management of (Director/Trustee -- 13 other funds)
64 senior living communities) The American Variable Insurance
Series Raintree Healthcare
Corporation
Leonard R. Fuller President, Fuller Consulting 1994 The American Funds Group:
(Director) (financial management consulting (Director/Trustee -- 11 other funds)
52 firm) The American Variable Insurance
Series
Abner D. Goldstine* Senior Vice President and Director, 1993 The American Funds Group:
(President and Trustee) Capital Research and Management (Director/Trustee -- 11 other funds)
69 Company
Paul G. Haaga, Jr.* Executive Vice President and 1993 The American Funds Group:
(Chairman of the Board) Director, Capital Research and (Director/Trustee -- 13 other funds)
50 Management Company

<CAPTION>
SHARES OF THE FUND
BENEFICIALLY OWNED,
DIRECTLY OR INDIRECTLY,
AT SEPTEMBER 3, 1999
------------------------
NAME OF NOMINEE THE
(POSITION WITH FUND) AMERICAN
AND AGE FUND FUNDS GROUP
-------------------- ---- -----------
<S> <C> <C>
Richard G. Capen, Jr. 69 33,293
(Nominee)
63
H. Frederick Christie 2,761 382,629
(Trustee)
66
Don R. Conlan* 323,784 1,733,463+
(Trustee)
63
Diane C. Creel 69 2,774
(Trustee)
50
Martin Fenton 344 28,754
(Trustee)
64
Leonard R. Fuller 69 6,408
(Director)
52
Abner D. Goldstine* 2,759 2,805,762+
(President and Trustee)
69
Paul G. Haaga, Jr.* 11,114 463,067+
(Chairman of the Board)
50
</TABLE>

- ------------------------------
* Is considered an "interested person" of the Fund within the meaning of the
Investment Company Act of 1940 (the "1940 Act"), on the basis of affiliation
with Capital Research and Management Company (the "Investment Adviser"). The
Investment Adviser is a wholly owned subsidiary of The Capital Group
Companies, Inc.

+ Includes Shares beneficially held under a master retirement plan.

Capital Research and Management Company manages The American Funds Group
consisting of 29 funds: AMCAP Fund, American Balanced Fund, Inc., American
High-Income Municipal Bond Fund, Inc., American High-Income Trust, American
Mutual Fund, Inc., The Bond Fund of America, Inc., The Cash Management Trust
of America, Capital Income Builder, Inc., Capital World Growth and Income
Fund, Inc., Capital World Bond Fund, Inc., EuroPacific Growth Fund,
Fundamental Investors, Inc., The Growth Fund of America, Inc., The Income
Fund of America, Inc., Intermediate Bond Fund of America, The Investment
Company of America, Limited Term Tax-Exempt Bond Fund of America, The New
Economy Fund, New Perspective Fund, Inc., New World Fund, Inc., SMALLCAP
World Fund, Inc., The Tax-Exempt Bond Fund of America, Inc., The Tax-Exempt
Fund of California, The Tax-Exempt Fund of Maryland, The Tax-Exempt Fund of
Virginia, The Tax-Exempt Money Fund of America, The U.S. Treasury Money Fund
of America, U.S. Government Securities Fund and Washington Mutual Investors
Fund, Inc. Capital Research and Management Company also manages American
Variable Insurance Series and Anchor Pathway Fund which serve as the
underlying investment vehicle for certain variable insurance contracts; and
Endowments, whose shareholders are limited to (i) any entity exempt from
taxation under Section 501(c)(3) of the Internal Revenue Code of 1986, as
amended ("501(c)(3) organization"); (ii) any trust, the present or future
beneficiary of which is a 501(c)(3) organization; and (iii) any other entity
formed for the primary purpose of benefiting a 501(c)(3) organization. An
affiliate of Capital Research and Management Company, Capital International,
Inc., manages Emerging Markets Growth Fund, Inc.

<PAGE>

The Fund has an Audit Committee composed of Diane C. Creel, Martin Fenton
and Richard G. Newman. The Committee's functions include such specific matters
as recommending the independent accountant to the Board of Trustees, reviewing
the audit plan and results of the audits and considering other matters deemed
appropriate for consideration by the Board of Trustees and/or the Committee.

The Fund has a Nominating Committee composed of all Trustees who are not
considered to be "interested persons" of the Fund within the meaning of the 1940
Act. The Committee's functions include selecting and recommending to the Board
of Trustees nominees for election as Trustees of the Fund. While the Committee
normally is able to identify from its own resources an ample number of qualified
candidates, it will consider shareholder suggestions of persons to be considered
as nominees to fill future vacancies on the Board. Such suggestions must be sent
in writing to the Nominating Committee of the Fund, c/o the Fund's Secretary,
and must be accompanied by complete biographical and occupational data on the
prospective nominee, along with a written consent of the prospective nominee to
consideration of his or her name by the Committee.

The Fund has a Contracts Committee composed of all Trustees who are not
considered to be "interested persons" of the Fund within the meaning of the 1940
Act. The Contracts Committee's function is to request, review and consider the
information deemed necessary to evaluate the terms of the investment advisory
and principal underwriting agreements and the Plan of Distribution under rule
12b-1 that the Fund proposes to enter into, renew or continue and to make its
recommendations to the full Board of Trustees on these matters.

Each Trustee is paid a fee of $900 per annum plus $200 for each Board of
Trustees meeting attended and $200 for each meeting attended as a member of a
committee of the Board of Trustees.

There were four Board of Trustees, two Audit Committee, one Nominating
Committee and one Contracts Committee meetings during the year ended July 31,
1999. All incumbent Trustees attended at least 75% of all Board meetings and
meetings of the committees of which they were members.

<PAGE>

The Fund pays no salaries or other compensation to its Trustees other than
Trustees' fees, which are paid to those Trustees who are unaffiliated with the
Investment Adviser as described below.

TRUSTEE COMPENSATION

<TABLE>
<CAPTION>
TOTAL COMPENSATION
(INCLUDING VOLUNTARILY
AGGREGATE COMPENSATION DEFERRED COMPENSATION) FROM TOTAL NUMBER
(INCLUDING VOLUNTARILY ALL FUNDS MANAGED BY CAPITAL OF FUND
DEFERRED COMPENSATION(1)) RESEARCH AND MANAGEMENT BOARDS ON
FROM THE FUND DURING FISCAL COMPANY DURING THE FISCAL WHICH
TRUSTEE OR NOMINEE YEAR ENDED 7/31/99 YEAR ENDED 7/31/99 TRUSTEE SERVES(2)
------------------ ------------------ ------------------ -----------------
<S> <C> <C> <C>
Richard G. Capen,
Jr................... none(3) $42,700 5
H. Frederick
Christie............. $2,500(4) 203,600 19
Don R. Conlan.......... none(5) none(5) 12
Diane C. Creel......... 2,500(4) 48,000 12
Martin Fenton.......... 2,900(4) 130,600 15
Leonard R. Fuller...... 2,500(4) 51,600 13
Abner D. Goldstine..... none(5) none(5) 12
Paul G. Haaga, Jr...... none(5) none(5) 14
Richard G. Newman...... 4,150(4) 107,100 13
Frank M. Sanchez....... none(3) none(3) 3
</TABLE>

- ------------------------------
(1) Amounts may be deferred by eligible Trustees under a non-qualified
deferred compensation plan adopted by the Fund in 1993. Deferred amounts
accumulate at an earnings rate determined by the total return of one or
more funds in The American Funds Group as designated by the Trustee.

(2) Includes funds managed by Capital Research and Management Company and
affiliates.

(3) Richard G. Capen, Jr. and Frank M. Sanchez have been nominated as Trustees
of the Fund and had not received any remuneration from the Fund as of its
7/31/99 fiscal year end.

(4) Since the deferred compensation plan's adoption in 1993, the total amount
of deferred compensation accrued by the Fund (plus earnings thereon) for
participating Trustees is as follows: H. Frederick Christie ($6,175),
Diana C. Creel ($1,597), Martin Fenton ($9,544), Leonard R. Fuller
($3,531) and Richard G. Newman ($24,505).

(5) Don R. Conlan, Abner D. Goldstine and Paul G. Haaga, Jr. are affiliated
with the Fund's Investment Adviser and, therefore, receive no remuneration
from the Fund.

<PAGE>

OTHER EXECUTIVE OFFICERS

<TABLE>
<CAPTION>
OFFICER
NAME (POSITION WITH CONTINUOUSLY
FUND) AND AGE PRINCIPAL OCCUPATION(1) SINCE(2)
------------- ----------------------- --------
<S> <C> <C>
Neil L. Langberg Vice President - Investment 1993
(Senior Vice President) Management Group, Capital
46 Research and Management
Company

Mark R. Macdonald Vice President - Investment 1996
(Senior Vice President) Management Group, Capital
40 Research and Management
Company

Michael J. Downer Senior Vice President - 1994
(Vice President) Fund Business Management
44 Group, Capital Research and
Management Company

Brenda W. Ellerin Vice President, Capital 1997
(Vice President) Research Company
36

Julie F. Williams Vice President - Fund 1993
(Secretary) Business Management Group,
51 Capital Research and
Management Company

Anthony W. Hynes, Jr. Vice President - Fund 1993
(Treasurer) Business Management Group,
36 Capital Research and
Management Company
</TABLE>

- ------------------------------
(1) The occupations shown reflect the principal employment of each individual
during the past five years.

(2) Officers hold office until their respective successors are elected, or
until they resign or are removed.

NO OFFICER, DIRECTOR OR EMPLOYEE OF THE INVESTMENT ADVISER RECEIVES ANY
REMUNERATION FROM THE FUND. ALL TRUSTEES AND OFFICERS AS A GROUP OWNED
BENEFICIALLY FEWER THAN 1% OF THE SHARES OUTSTANDING ON SEPTEMBER 3, 1999.

<PAGE>

2. APPROVAL OF THE ELIMINATION OF CERTAIN OF THE FUND'S FUNDAMENTAL INVESTMENT
POLICIES

INTRODUCTION AND SUMMARY

Some of the Fund's existing fundamental investment restrictions reflect
regulatory, business or industry conditions, practices or requirements that have
changed or no longer exist. With the passage of time, the development of new
practices, and changes in regulatory standards, the Board of Trustees, together
with the Fund's senior officers, have reviewed these restrictions and believe
two fundamental restrictions ought to be eliminated. By reducing the number of
policies that can be changed only by shareholder vote, the Board of Trustees and
the Fund will have greater flexibility to modify Fund policies, as appropriate,
in response to changing markets and in light of new investment opportunities and
instruments. The Fund will then be able to avoid the costs and delays associated
with a shareholder meeting when making changes to the non-fundamental investment
policies that the Board may consider desirable.

IMPORTANTLY, THE PROPOSED AMENDMENTS DO NOT AFFECT THE INVESTMENT OBJECTIVE
OF YOUR FUND, WHICH REMAINS UNCHANGED. MOREOVER, THE BOARD DOES NOT ANTICIPATE
THAT THESE CHANGES WILL CHANGE TO A MATERIAL DEGREE THE LEVEL OF INVESTMENT RISK
ASSOCIATED WITH AN INVESTMENT IN THE FUND.

The text of each of the Fund's fundamental restrictions which is proposed
to be eliminated is set forth below. Shareholders may vote for any or all of the
changes that are the subject of Proposal 2.

RESTRICTIONS PROPOSED TO BE ELIMINATED

Neither of the following investment restrictions is required under the 1940
Act. They were originally adopted in response to state law restrictions or
interpretations that no longer apply to the Fund. Therefore, in order to
increase the ability of Fund management to manage the Fund's assets effectively
and efficiently in response to market and regulatory change, it is proposed that
these investment restrictions, which are currently listed as fundamental, be
eliminated. Further explanations pertaining to specific restrictions are set
forth below.

<PAGE>

2A. PLEDGING ASSETS

In certain circumstances this restriction could interfere with the Fund's
ability to borrow temporarily for extraordinary or emergency purposes. The
Fund's current borrowing limits would remain unchanged.

Current Text

[The Fund may not...] pledge or hypothecate assets in excess of one-third
of the Fund's total assets.

2B. OIL, GAS OR MINERAL EXPLORATION

At one time, certain state regulators felt it appropriate to limit
investments in oil and gas partnerships as a means to protect investors from
speculative investments and to reduce overall portfolio risk. Industry practice
has been to manage these risks through prudent investment practices and explicit
diversification and concentration policies.

Current Text

[The Fund may not...] invest in oil, gas, or other mineral exploration or
development programs or leases.

THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU VOTE IN FAVOR OF THESE
PROPOSED CHANGES TO FUNDAMENTAL INVESTMENT RESTRICTIONS.

3. RATIFICATION OF THE SELECTION BY THE BOARD OF TRUSTEES OF
PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT PUBLIC ACCOUNTANT

Shareholders are requested to ratify the selection by the Board of Trustees
(including a majority of the Trustees who are not "interested persons"of the
Fund as that term is defined in the 1940 Act) of PricewaterhouseCoopers LLP as
independent accountant for the Fund for the fiscal year 2000. In addition to the
normal audit services, PricewaterhouseCoopers LLP provides services in
connection with the preparation and review of federal and state tax returns for
the Fund. PricewaterhouseCoopers LLP has served as the Fund's independent
accountant since the Fund's inception and has advised the Fund that it has no
material direct or indirect financial interest in the Fund or its affiliates.
The Fund's Audit Committee recommended that PricewaterhouseCoopers LLP be
selected as the Fund's independent accountant for the current fiscal year. The
employment of the accountant is conditioned upon the right of the Fund to
terminate such employment at any time without any penalty. No representative of
PricewaterhouseCoopers LLP is expected to attend the Meeting of Shareholders.

<PAGE>

THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR RATIFICATION OF
ITS SELECTION OF PRICEWATERHOUSECOOPERS LLP

OTHER MATTERS

Neither the persons named in the enclosed Proxy nor the Board of Trustees
are aware of any matters that will be presented for action at the meeting other
than the matters set forth herein. If any other matters requiring a vote of
shareholders arise, the Proxies will confer upon the person or persons entitled
to vote the Shares they represent a discretionary authority to vote the Shares
in respect to any such other matters in accordance with their best judgment in
the interest of the Fund and its shareholders.

SHAREHOLDER PROPOSALS

Any shareholder proposals for inclusion in Proxy solicitation material for
a shareholders meeting should be submitted to the Secretary of the Fund, at the
Fund's principal executive offices, 333 South Hope Street, Los Angeles, CA
90071. Any such proposals must comply with the requirements of federal and state
laws and regulations, including rule 14a-8 under the Securities Exchange Act of
1934.

Under the laws of Massachusetts, where the Fund is organized, the Fund is
not required to hold regular meetings of shareholders. Under the 1940 Act, a
vote of shareholders is required from time to time for particular matters but
not necessarily on an annual basis. As a result, the Fund does not expect to
hold shareholders meetings on a regular basis, and any shareholder proposal
received may not be considered until such a meeting is held.

GENERAL INFORMATION

Capital Research and Management Company is the investment adviser to the
Fund and is located at 333 South Hope Street, Los Angeles, CA 90071 and 135
South State College Boulevard, Brea, CA 92821. American Funds Distributors, Inc.
is the principal underwriter of the Fund's shares and is located at the Los
Angeles and Brea addresses above and also at 3500 Wiseman Boulevard, San
Antonio, TX 78251, 8332 Woodfield Crossing Boulevard, Indianapolis, IN 46240,
and 5300 Robin Hood Road, Norfolk, VA 23513.

The enclosed Proxy is solicited by and on behalf of the Board of Trustees
of the Fund. The Fund will pay the cost of soliciting proxies, consisting of
printing, handling and mailing of the Proxies and related materials. In addition
to solicitation by mail, certain officers and Trustees of the Fund, who will
receive no extra compensation for their services, may solicit by telephone,
telegram or
10

<PAGE>

personally. WE URGE ALL SHAREHOLDERS TO MARK, DATE, SIGN, AND RETURN THE PROXY
CARD IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES. YOU MAY ALSO VOTE YOUR PROXY BY TELEPHONE OR THE INTERNET BY FOLLOWING
INSTRUCTIONS THAT APPEAR ON THE ENCLOSED PROXY INSERT.

YOU MAY OBTAIN A COPY OF THE FUND'S MOST RECENT ANNUAL REPORT, WITHOUT
CHARGE, BY WRITING TO THE SECRETARY OF THE FUND AT 333 SOUTH HOPE STREET, LOS
ANGELES, LOS ANGELES, CA 90071 OR BY TELEPHONING 800/421-0180. THESE REQUESTS
WILL BE HONORED WITHIN THREE BUSINESS DAYS OF RECEIPT.

By Order of the Board of Trustees

JULIE F. WILLIAMS
Secretary

October 12, 1999

<PAGE>

This Notice of Meeting of Shareholders
and Proxy Statement has been printed
on recycled paper that meets the
guidelines of the United States
Environmental Protection Agency.

[LOGO]

<PAGE>
PROXY CARD LIMITED TERM TAX-EXEMPT BOND FUND OF AMERICA PROXY CARD

PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND
FOR THE MEETING OF SHAREHOLDERS TO BE HELD DECEMBER 1, 1999

The undersigned hereby appoints Michael J. Downer, Paul G. Haaga, Jr., Anthony
W. Hynes, Jr., and Julie F. Williams, and each of them, his/her true and lawful
agents and proxies with full power of substitution to represent the undersigned
at the Meeting of Shareholders to be held at the Office of The Capital Group
Companies, Inc., 11100 Santa Monica Boulevard, 15th Floor, Los Angeles,
California, on Wednesday, December 1, 1999 at 11:00 a.m., on all matters coming
before the meeting.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER YOU DIRECTED. IF
NO DIRECTION IS GIVEN, WITH RESPECT TO ANY PARTICULAR ITEM, THIS PROXY WILL BE
VOTED FOR THE NOMINEES IN ITEM 1 AND FOR ITEMS 2 AND 3.

CONTROL NUMBER:

NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD. JOINT OWNERS
SHOULD EACH SIGN INDIVIDUALLY. CORPORATE PROXIES SHOULD BE SIGNED IN FULL
CORPORATE NAME BY AN AUTHORIZED OFFICER. FIDUCIARIES SHOULD GIVE FULL TITLES.

Signature

Signature of joint owner, if any

Date

LIMITED TERM TAX-EXEMPT BOND FUND OF AMERICA
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example: []

<TABLE>
<CAPTION>
1. Election of Trustees: FOR ALL WITHHOLD FOR ALL
ALL EXCEPT

<S> <C> <C> <C> <C>
01 Richard G. Capen, Jr. 06 Leonard R. Fuller

02 H. Frederick Christie 07 Abner D. Goldstine [] [] []

03 Don R. Conlan 08 Paul G. Haaga, Jr.

04 Diane C. Creel 09 Richard G. Newman

05 Martin Fenton 10 Frank M. Sanchez

</TABLE>

To withhold your vote for any individual nominee, mark the "For All Except" box
and write the nominee's number on the line provided below.
_____________________________________________________________________

<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN

<S> <C> <C> <C>
2. Approval of the proposed changes to the Fund's
investment restrictions:

2A. Eliminate restriction on pledging assets [] [] []

2B. Eliminate restriction regarding oil, gas or mineral [] [] []
exploration

3. Ratification of selection of PricewaterhouseCoopers LLP [] [] []
as independent accountant:

</TABLE>

In their discretion, upon other matters as may properly come before the
meeting.
IMPORTANT
SHAREHOLDERS CAN HELP THE FUND AVOID THE NECESSITY AND EXPENSE OF SENDING
FOLLOW-UP LETTERS BY PROMPTLY RETURNING THIS PROXY.