BOSTON–(BUSINESS WIRE)–Dec. 22, 2003–During the month of November, the management teams of Evergreen Managed Income Fund and Evergreen Income Advantage Fund engaged in several transactionsdesigned in an attempt to potentially offer investors some protection against the impact of rising interest rates on short-term borrowing costs.
Evergreen Income Advantage Fund
As of 6/30, 50% of the Fund’s short-term borrowing costs were hedged using a portfolio of 3- and 5-year interest rate swaps. Effective November 24th, management increased the amount of its interest rate hedge to over 80% using additional interest rate swap contracts of the same tenors. On December 1, the Fund paid its 8th monthly dividend of $0.1375 per share, maintaining its distribution yield of 11% based on its initial offering price of $15.00 per share.
Evergreen Managed Income Fund
Effective November 24th, management engaged in 3- and 5-year swap transactions which have the effect of hedging 70% of the funds’ borrowing costs against potential increases in short-term interest rates. On December 1, the fund paid its 4th monthly dividend of $.13084 per share, maintaining its yield of 7.85%, based on the fund’s initial offering price of $20.00 per share.
“Our commitment to hedge a significant amount of our borrowing costs on Evergreen Income Advantage and Evergreen Managed Income Funds addresses a key risk of closed-end funds – rising borrowing costs. Our hedging policies are our attempt to reduce this risk for fund shareholders, and distinguish our funds amongst a competitive closed-end fund universe,” said Dennis Ferro, President and CEO of Evergreen Investments.
More details about the fund are available at EvergreenInvestments.com.
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Past performance is not a guarantee of future results. Like all investment company securities, the shares (1) are not insured by the FDIC or any other government agency, (2) are not issued or guaranteed by any bank, and (3) may lose value.
Funds that invest in high yield, lower-rated bonds may contain more risk due to the increased possibility of default. Foreign investments may contain more risk due to the inherent risks associated with changing political climates, foreign market instability and foreign currency fluctuations. The closed-end funds discussed are no longer offered as initial public offerings.
Investors who wish to buy or sell fund shares of a CEF need to place orders through an intermediary, or broker, who will buy or sell fund shares on the stock exchange in a process identical to the purchase or sale of any other listed stock, and closed end funds may trade below their initial cost.
Closed-end funds do not continuously offer shares for sale as open-end mutual funds do. A closed-end fund is not required to buy its shares back from investors upon request. The share price of a closed-end fund is based on the market’s value. The fund’s investment objective is fundamental and may not be changed without the vote of the fund’s shareholders.
About Evergreen Investments
Evergreen Investments is the brand name under which Wachovia Corporation (NYSE: WB) conducts its investment management business and is a leading asset management firm serving more than four million individual and institutional investors through a broad range of investment products. Led by 350 investment professionals, Evergreen Investments strives to meet client investment objectives through disciplined, team-based asset management. Evergreen Investments manages more than $240 billion in assets (as of September 30, 2003). For more information on Evergreen, please visit www.evergreeninvestments.com.
